Gdynia Refuses To Quit

April 6, 2000

Leading Polish shipyard Gdynia has not given up hope of buying a stake in Finnish shipbuilder Masa-Yards, even though Kvaerner has put off the sale. Gdynia Chief Executive Janusz Szlanta said that Gdynia wanted to boost cooperation with Masa-Yards while waiting for Kvaerner to resume the sell-off. "I have accepted Kvaerner's decision. But at the same time I confirm our interest in taking part in the sale of the Finnish shipyards," Szlanta said. Kvaerner said it is putting off a planned sale of Masa-Yards after failing to find the right buyer. It had been in talks with U.S. cruise groups Carnival Corp and Royal Caribbean, as well as a Finnish bidder. The company said, however, that it maintained its long-term strategic aim of exiting shipbuilding. "Regardless of the future of our equity engagement in Masa-Yards, we would like to develop business cooperation between the Masa-Yards group and the Gdynia group," said Szlanta. Gdynia wanted to buy a 20-25 percent stake in Masa-Yards as part of a plan of international expansion and diversification. Gdynia produces container ships as well as vessels carrying cars and chemicals, while Masa-Yards is a leading cruise ship builder. Szlanta said joint operations would benefit both shipyards by creating synergies. "Masa-Yards' strength -- the excellent technologies of a leader in cruise liner building -- would be supplemented by the technical potential and labor skill of the Gdynia group," he said. Gdynia is one of the few Polish yards to prosper in the free-market economy introduced after the 1989 fall of communism, which badly hit most of the country's heavy industries. After a radical restructuring in the early 1990s, Gdynia is now the world's eighth biggest shipyard after buying the nearby Baltic Gdansk yard in 1998. Szlanta, its co-owner and chief executive since 1997, wants to make Gdynia's Europe's biggest shipyard and a Polish firm which is a predator rather than prey in an industry ripe for consolidation. Gdynia expects to increase its sales to $570 million this year from $400 million in 1999. Last year, its net profit shrank to 40 million zlotys ($9.57 million) from 113 million zlotys in 1998, mainly due to the Gdanska purchase.

Gdynia Refuses To Quit

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