Antonini: Overcapacity Remains the Biggest Problem

Thursday, October 28, 2010

In addressing a conference in Nan Tong which included 120 of the world’s leading shipbuilding executives from Japan, Europe, China, Korea and USA (JECKU), CESA Honorary Chairman and Fincantieri chairman Corrado Antonini said in his keynote speech: “Despite signs of recovery in global shipping, the situation of most shipyards in the world remains difficult as orderbooks still continue to decline while international experts estimate that at best only 50% of the newbuilding capacity could be utilized in the next 10 years.

So overcapacity remains the biggest problem of our industry and we have to take the responsibility of adapting our offer to the reduction in demand which we will have to face for several years to come.”

While current market conditions present a number of challenges, Antonini sees opportunities, too, particularly in regards to ever more stringent demands regarding environmental rules worldwide.

“At various international fora, there has been an increasing demand for tightened environmental regulations and a push for a greener fleet,” Antonini said. “Such change opens opportunities for companies that anticipate the new trend. We will need to face technical challenges of new designs and configurations. We will need to look into new markets such as off-shore, wind energy and CO2 capture and storage.”

Subsidy Fight: 20 Years and Running

With a challenging global economy, too much capacity and ever tightening environmental rules souring the future prospects of commercial shipbuilding, Antonini noted that perhaps the biggest threat to a global balance is the matter of a worldwide stance on the use of shipbuilding subsidies, a fight that has been largely fruitless for more than two decades.

“In parallel, I would also like to call upon the shipbuilding leaders attending this meeting to take their share of responsibility, to put in practice the lessons learnt from the past, and ask for more cooperation at the political level to the benefit of our future prosperity as industrial community,” Antonini said. “I make specific reference to the OECD activities. If we, the global industry leaders, do not pass a strong and clear message to our respective governments, they will not be able to agree on a fair and balanced instrument to help our industry.

We believe that an international discipline on subsidies and pricing would, particularly in these times of crisis, be of great value to ensure a return to healthy market conditions. Unfortunately, WP6 has not been able so far to generate any constructive result. Today, unless the November meeting reveals major changes, we must realize that the prospects of an international agreement to establish normal competitive conditions in the global shipbuilding market appear, at least for the foreseeable future, no longer realistic.”

 

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