Particularly for commentators in the UK shipping industry, this perception is understandable - but mistaken, says Reinhard Lüken, head of the German shipbuilding and ocean industries association (VSM), and is a message he “cannot accept”.
“People who have worked a long time in the UK have seen shipbuilding go from absolute world market dominance to nothing, in 50 years. I can’t think of any other industry that has done that,” Lüken tells Seatrade Maritime News. “The UK’s economic focus on capital markets has put heavy industry in a very difficult position. We do not have the same situation here in Germany.”
And yet. “I hear this, even from our own shipowners. ‘Are they still building ships in Germany?’ Of course we are! Can they really afford this level of ignorance?”
The key, he argues, is that while Asian shipyards have strengths which European yards cannot replicate, this works both ways. “I don’t want to come across as someone with a loudspeaker promoting Germany – I want to be realistic. Yes, product types that are simple technology – bulk carriers, with massive empty steel hulls – we have not built these in Germany for years. We do not have the economies of scale for that. There are also external factors – the steel price, for example – that’s 20-30% of the newbuilding price.
“But there is no law of nature that says we can’t continue to lead the market with our technology.”
In fact revenues from shipyards in Germany were EUR7bn in 2014, (EUR18bn where marine equipment production is included) up from EUR4bn in 1998, pre-recession and before China’s shipbuilding boom in the early-mid 2000's. In fact, as of mid-2015, Germany retains a greater share of world shipbuilding over 100gt than Singapore.
“Mitsubishi (Heavy Industries), the crown jewel of Japanese shipbuilding, has been trying to build cruise ships, and has lost $1.3bn doing it,” said Lüken, referring to newbuild AIDAprima and its sister ship, which is set for delivery in March this year after more than a year of delays.
The last two visits Seatrade has made to Hamburg’s Blohm + Voss shipyard, head Jan Kees Pilaar painted a grim picture for offshore, the market for which, at his yard, had imploded. Commercial shipping, however, was understood to be a complete write-off in terms of revenues. Instead, cruise, mega-yachts, and military contracts were the order of the day.
Feeder vessels were identified as one future revenue stream for German yards, and will become more attractive as emphasis on efficiency and technology increases. “It’s a different story on the container side. There is a lot of expertise here for smaller vessels, and the exchange rate is almost like for like with dollars.
“With standard ship types there is so much focus on capital, rather than technology or performance. There is a certain tendency for shipowners to say ‘good enough’. But, where complex technology and performance is the focus, European shipyards lead the market.”
“Look to OSVs – Norway is the world market leader. Dredgers – the Netherlands lead the market. Look at cruise – Germany is the world market leader. Where performance is key, we lead,” he states.
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