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EDITORIAL COMMENT


European champions and Asian dragons


Laying the keel of Genesis at Aker Yards – another jewel in the crown of European shipbuilding.


O


ne senior Aker executive approached at Seatrade Miami byTe Naval Architect last month


for his views on an emerging ‘European champion’ for cruise and ferry building expressed his scepticism so colourfully that his words have no place in a family journal. Te gist was that the European Commission would block any alliance between Aker and Fincantieri, a link-up which could lay claim to approaching 80% of the cruiseship market. However, if doubters are aplenty, there are


many who view recent machinations within Aker Yards, Europe’s largest shipbuilder, as clearly pointing to such an eventuality. Te catalyst for speculation was prompted


by STX Corp, when the South Korean yard group audaciously scooped 39.2% of Aker Yards equity for US$800 million late last year. Share prices at time of writing meant that the Korean shipbuilder could pick up the remainder of equity for around the same amount. But, and of course, the STX transaction


has been referred to European Commission competition authorities. What has been interesting, though, is that authorities have so far made no statement of objections over the Korean incursion, and some say the EC has tacitly signalled reluctance to interfere. Meanwhile, Aker has looked to offload


the bulk of its merchant shipbuilding interests, with a preliminary agreement to sell the majority of its German and Ukraine- based shipbuilding interests, at Wismar, Warnermunde, and Nikolaev, to Russian investment group FLC, for €292m. In the wider picture, the move supports suggestions of a carving up of the group’s


The Naval Architect April 2008


interests into four segments – cruise and ferry, merchant, offshore, and specialist vessels, in line with demands made by Hayvard Invest, Aker’s second largest shareholder.


“For all its strengths, innovations, supplier networks, and pre-financing opportunities, European shipbuilding has weaknesses”


French president Nicolas Sarkozy is


reported as making overtures to the Finnish government over a possible deal to create a European cruise and ferry shipbuilding force, with the French, Norwegian, and Finnish governments to fund a holding in Fincantieri. Fincantieri chairman Corrado Antonini has


gone on record as a keen believer in the notion of the European cruiseship building champion. He said Asian interests eyeing the market, with current orders valued by Barry Rogliano Salles at a mouth-watering US$23 billion, needed to bear in mind the high level of third party activities distinguishing the cruiseship construction market, where up to 80% of the value in a ship’s build lay with subcontractors. Te shipbuilder’s role had become that of


an engineering company, coordinating the contributions made by hundreds of different enterprises. ‘It is not true to say that there is a specific


niche of cruiseship building – anyone could do it, provided the competence is there. We know our Asian colleagues are looking at it, but what they need to bear in mind is, first, the need for a network of suppliers, and second, that volumes are minimal; 80% of the money does not belong to the shipyards.’ Mr Antonini said Fincantieri did not so


much want to create a barrier to acquisition from overseas, but rather to offer an alternative to the acquisition of a major European shipbuilding player by outside interests. He cited Airbus as a possible model for European cruise shipbuilding. But, for all its historic strengths, innovations,


supplier networks, and pre-financing opportunities, European shipbuilding has plenty of weaknesses. Among those pointed out by Jean-Bernard Raoust of BRS were: the strong Euro, high manpower costs, ageing production facilities and, already, the small number of players controlling the market. And, with March seeing Carnival Corp’s Mickey Arison citing the strength of the Euro as a strong influence on his decision to hold fire on future orders for the market’s dominant customer, it is not hard to see that any European champion may soon face a contest from an equally determined Asian dragon. Who knows, the power of Korean


shipbuilders may indeed squeeze sub- suppliers to wear the 15%-20% discount some think necessary to break into the market.NA


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