Sepi News

The French Armament General Delegation (DGA) and SEPI agreed last week in Granada, during a bilateral meeting about European collaboration on naval construction, to intensify the relationship between IZAR and DCN as a significant step towards the creation of a future european naval consortium. The president of SEPI, Ignacio Ruiz-Jarabo, and the director of cooperation and industrial affaires of DGA, Laurent Giovachini, have leadered this meeting, celebrated in Granada during 2 days, and have concluded the convenience of approaching a french-spanish cooperation on naval construction. IZAR and DCN have been collaborating in submarines programs for more than 30 years, with positive results in technological terms as well as in industrial and commercial aspects.

Yesterday the European Commission decided that aid provided to the public Spanish shipyards is not in line with EC rules on State aid to shipbuilding. The Commission has established that State holding company Sociedad Estatal de Participaciones Industriales (SEPI), in 1999 and 2000, granted aid worth €500 million to the civil public shipyards that are today all owned by IZAR. The aid took the form of a capital injection, loans and a purchase price above market value. As the loans amounting to € 192.1 million to SEPI were paid back, the sum to be reimbursed will amount to € 308.3 million, plus interest. The object the decision are a number of transactions that took place between 1999 and 2000 involving SEPI and its subsidiaries Astilleros Españoles (AESA)…

The European Commission taking Spain to the European Court of Justice in Luxembourg over its failure to recover around 111 million euros in what it calls illegal state aid to its shipyards. The EU executive said in a statement it had asked Spain in early December to recover the aid, paid in the form of 18,451 billion pesetas in special tax credits in 1998 to the state-owned merchant shipyards grouped in holding company Sociedad Estatal de Participaciones Industriales (SEPI). "Despite reminders, Spain has not complied with the decision, which it was obliged to execute within two months. Faced with such a situation, the Commission is obliged to act," it said in a statement.

Spain's state holding company Sepi said it had created the world's 10th largest shipbuilder with annual sales of around $1.25 billion. The group, which formally begins in October, will be formed from the merger of Spain's military shipbuilder Bazan with the civil yards including Astano, Cadiz and Manises. Its order book will be worth 638 billion pesetas, Sepi said in a statement. The merger is part of Sepi's plan to cut losses in the state-controlled industry and improve operating results by 20 billion pesetas, with the help of 100 billion pesetas of investment between now and 2005. This should make the new group profitable and competitive in world markets, Sepi said. Spain has tried to shake up its civilian shipbuilding interests four times in the last 15 years.

The European Commission will open a formal investigation into plans by Spanish state holding company SEPI to pay $57 million (10 billion pesetas) to buy a number of shipyards as part of a restructuring plan. "On the basis of the information at its disposal the Commission doubts whether this was a genuine market transaction, but rather a capital injection that could constitute state aid," the Commission said in a statement. The Commission noted it had already cleared an aid package for the Juliana and Cadiz shipyards in 1997 on condition they received no further state handouts.

Spain is in talks with several shipbuilders in Europe to create a joint European company similar to the aerospace EADS, the chairman of Spain's state holding company (SEPI) said. After a presentation in Madrid of Spain's new civilian and military shipbuilder Izar, Pedro Ferreras said SEPI was already talking to groups in France, Germany and Italy. "We want to begin working on projects common to European countries, like the model followed by the aerospace sector, but that takes time," he said, referring to the European Aeronautic Defense and Space Company (EADS). EADS was born from the merger of SEPI-controlled Casa, France's Aerospatiale Matra and Germany's DaimlerChrysler Aerospace.

For those who have been in shipping for a decade or three, warnings of excess shipbuilding capacity will engender a sense of déja vu. First it was the Japanese, then the South Koreans and now, together with those, the Chinese. Clarkson Asia managing director Tim Huxley, addressing the International Union of Marine Insurance (IUMI) conference in Singapore this week, identified rapid shipyard capacity expansion in China, coupled with productivity increases at yard facilities in Japan and South Korea. Apart from a global economic crisis, excess capacity now posed the single biggest threat to the world’s shipbuilding industry, Huxley declared.

The new Spanish military shipbuilder, Navantia, has been unveiled by Pedro Solbes, the Spanish government’s second vice-prime minister and economics minister, along with Enrique Martínez Robles, the Chairman of the state holding company Sociedad Estatal de Participaciones Industriales (SEPI), and the Chairman of the new company, Juan Pedro Gómez Jaén. The company, specializing in the design, construction and integration of military ships, is owned by SEPI and is the result of the desegregation of Izar’s military activities in line with the agreement reached in order to make publicly-owned shipyards viable. Mr. Solbes’ referred in his speech to the creation of this new company as the start of a new future for Spanish shipyards…

The privatization of the shipbuilding company IZAR will come to an end on Tuesday when the state-owned holding company Sociedad Estatal de Participaciones Industriales (SEPI) completes the sale of the IZAR facilities in the Basque town of Sestao and Gijon and Seville in Spain. Concerning the Izar facilities in Manises (Valencia), the SEPI is to propose Tuesday the delay of the sale as the European Commission need some more data on it. Spanish trade union CC.OO. is to challenge the privatization of the IZAR factories as, according to the Spanish union, the Spanish Government has broken the agreement reached with the unions in December 2004. Members of the SEPI and the trade unions met Monday for almost three hours within the framework of the committee to follow the agreement.

The Spanish government said last week that it would appeal a European Commission decision ordering Spain's state-owned shipyards to repay with interest $118 million in state aid. "The industry ministry and the government is absolutely convinced that this aid for shipbuilders is correct," Industry Secretary Jose Manuel Serra said. He said the payments, made in 1998, were within a $370.6 million aid plan authorized by Brussels. Shipyard workers staged a one-day strike at yards across Spain in protest at Tuesday's ruling by the commission. Unions called for a change in European legislation on the industry. Serra said conditions in which European shipyards compete with companies from other regions.