Challenges and Developments in Global Shipbuilding Industry -brief overview of the current situation- AgS Monitoring Shipbuilding Thorsten Ludwig, Heino Bade, Heiko Messerschmidt industriall Global Union Shipbuilding-Shipbreaking Action Group Meeting 31 October - 1 November 2017, Rotterdam, Netherlands
No. of Ships Some call it adjustment 3,500 Global Newbuilding Orders (vessels over 20.000 dwt) 3,000 2,905 2,500 2,000 2,255 1,874 1,833 2,047 1,500 1,000 500 480 545 411 547 795 546 667 1,378 1,197 1,140 580 1,043 707 1,337 1,107 217 267 0 Source: Clarksons (2017): Results Presentation, 14.08.2017 2
Some call it concentration in 2007 in 2017 32 101 Number of yards accounting for 50% of the global orderbook 24 Number of yards accounting for 75% of the global orderbook 59 Share of the TOP-TEN-YARDS on the national orderbook: 34% 49% 60% 70% Source: Shipbuilding News, 14.09.2017 43% 60% 76% 92% 3
Some call it consolidation Number of active shipyards* worldwide 860 357 2007 2017 Active shipyards are those with at least one ship of 1,000+ GT on order; Updated 1.9.2017 Source: Clarkson, 14.09.2017 4
Shipping lending: Shift to Asia-Pacific 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 2010 2011 2012 2013 2014 2015 2016 Total bn US$ 418.4 400.3 388.5 379.1 391.5 343.8 315.0 Europe 83,1 79,3 75,1 72,9 70,5 63,9 62,2 USA 2,1 1,7 2,8 2,7 2,6 3,9 4,8 Asia- Pacific 14,8 19,0 22,0 24,4 26,8 32,2 33,0 100 100 99,9 100 99,9 100 100 Asia-Pacific USA Europe Total bn US$ 0% 2010 2011 2012 2013 2014 2015 2016 Source: Clarksons (2017): Results Presentation, 14.08.2017 5
WE call it a severe global shipbuilding crisis especially for the employees! Reduction of white lsit down to 59 yards 40 of these yards without any order in 2016 Important steps to enter the cruiseship market Mass lay-offs in shipyards: appr. > 70.000 direct employees in shipbuilding industriy lost since 2016 Lowest orderbook since 2003 State intervention to avoid closures (f.e. DSME) Reduction in new orders in 2016 of 83,3% Kooperation betwen yards to overwheln the crisi: : MHI, Imabari, Oshima, Namura Mor ethan 33.000 jobs lost in shipbuilding (Jan. 2015 bis Sept. 2016) Reduction from 71.554 to 38.452 employees in shipbuilding Source: AgS-Schiffbau-Monitoring >18.000 jobs lost in offshore-industry since 2012 No new orders since 2015 Capacity utilization: 50% Huge newbuilding program for Australian Navy More than. 100 bln.. A$ für appr. ca. 60 ships Newbuilding program provides work for the next 30 years 6
Despite the crisis: Booming markets for cruiseships and superyachts Length: 228.20m Width: 28.70m Crew: 776 Tonnage: 39,674 BRT Passengers: 1,400 Length: 362.12m Width: 66m Crew: 2,384 Tonnage: 226,963 BRT Passengers: 6,780 SS Rotterdam 1956 Harmony of the Seas 2016 7
No of cruiseships Mio. gt Orderbooks for cruiseships (>= 200 lower berths) 80 9,000,000 70 60 7,163,650 6,797,800 7,691,220 64 8,088,620 69 8,000,000 7,000,000 50 40 4,392,300 4,932,750 57 55 6,000,000 5,000,000 30 2,434,155 36 40 4,000,000 3,000,000 20 22 2,000,000 10 1,000,000 0 2010 2014/08/21 2015/04/10 2015/08/10 2016/02/01 2016/12/21 2017/09/11 0 Sources: cruiseindustynews.com; Seatrade Cruise News; own calulations gt No of cruiseships (>=200 lower berths) 8
Orderbooks for cruiseships (>= 200 lower berths) Country No. of ships Sum reported Price ($) Average Lower Berths Average GT Sum GT %-share of orderbook by GT China 2 1.500.000.000 4.000 133.500 267.000 3,3% Croatia 2 252.000.000 264 12.635 25.270 0,3% Finland 6 5.230.000.000 4.380 157.167 943.000 11,7% France 11 11.179.000.000 4.336 167.873 1.846.600 22,8% Germany 18 14.414.000.000 3.078 133.361 2.400.500 29,7% Italy 27 15.328.000.000 2.354 94.635 2.555.150 31,6% Norway 2 260.000.000 530 21.000 42.000 0,5% Portugal 1 80.000.000 200 9.300 9.300 0,1% Total 69 48.243.000.000 2.938 117.229 8.088.820 100% Sources: cruiseindustynews.com; Seatrade Cruise News; own calulations 9
It`s still an European market Orderbook for cruiseships by region Sept. 2017 (GT) China 3% Europe 97% Sources: cruiseindustynews.com; Seatrade Cruise News; own calulations 10
dominated by two/three shipbuilders China 3.3% Orderbook for cruiseships by country/yard (GT) Croatia 0.3% STX France 22.8% Norway 0.5% MV Werften 7.2% Fincantieri /Italy 31.6% Portugal 0.1% Meyer Werft GmbH / GER/FIN 34,1% China 3.3% Fincantieri /STX France 54.4% Norway Croatia 0.5% 0.3% MV Werften 7.2% Orderbook for cruiseships by country/yard (GT) Portugal 0.1% Meyer Werft GmbH / GER/FIN 34,1% Sources: cruiseindustynews.com; Seatrade Cruise News; own calulations 11
building new ships for additional 203.000 new passengers. Average reported price (Mio. US$) Average lower berths 4500 4000 3500 Average lower berths 2.938 3000 2500 2000 1500 Average reported price 699 Mio. US$ 1000 500 0 Portugal Croatia Norway Italy China Germany Finland France Sources: cruiseindustynews.com; Seatrade Cruise News; own calulations 12
China: Getting prepared for the future cruise market Carnival, CSSC and Fincantieri announced the delivery of a first 133,500t ship from CSSC s Waigaoqiao yard in Shanghai due in 2023 with a second to follow plus four more options. $4bn investment by Carnival and CIC Capital Developing a supply chain with logistics companies, design and shipfitting specialists and cruise staff/crew training facilities and cruise port infrastructure projects. Chinese cruise companies ordering a newbuild from outside the country would have to pay a prohibitive 30% tax on the cost price More than 40% of Chinese passengers are under 40 years old (Europe: end 40s end 50s) 51% of Chinese adults in their 20s say they are planning to take a cruise. 300 million peaople - the equivalent of the total population of North America or Western Europe - of the population are genuine potential cruise prospects. Source: Seatrade Cruise (2017): Cruise Shipbuilding in Asia 2017; August 2017 13
Looking at the Chinese ambitions in the case of cruisehip industry we suggest an intense and continuous exchange between works councils and trade unions representing the European cruise ship industry! 14
Personen Trillion US$ Superyachts: a growing (Asia-Pacific) market 350000 300000 250000 200000 150000 100000 50000 0 ultra high net worth population 51515 91375 69725 91150 122600 104650 2015 2020 Asia-Pacific 50 40 ultra high net worth assets 14.2 30 The Americas 7.8 17.6 20 12.7 Europe, Middele East 10 ans Africa 14.5 9.5 0 2015 2020 Asia-Pacific The Americas Europe, Middele East ans Africa The superrich - overview Source: World Ultra Wealth Report 2015-2016 -Highlights 15
Superyachts: Orderbook in detail (Jan. 2017) Orderbook for superyachts (=> 50m) by No. of yachts Orderbook for superyachts (=> 50m) by total length Italy 33% The Netherlands 30% China Croatia Finland Greece Australia 1% 1% 1% 1% 1% Norway 1% Qatar 2% 125 superyachts Germany 13% Turkey 16% Italy 29% The Netherlands 28% Finland Greece China Croatia Qatar 1% Australia 1% 1% 1% 2% Norway 2% 9,2 km total length Turkey 15% Germany 19% 16
IG Metall activities in shipbuilding industry Collective bargaining 2017/2018: Voluntary reduction of working times to 28h/week Increase of wages by 6% New labour law to regulate temporary work & sub-contractors (2017): Equal pay after nine months Time limitation: max. 18 months Temporary workers are not allowed to work as strike breakers Reinforcement of information rights for works councils Fight for new instruments for codetermination (for shipyard-groups) Preservation of all shipbuilding production facilities since 2007 Network of shipyard`s works councils (AG Schiffbau) National conferences and national LeaderShip 2020-Process 17