Page 28: of Maritime Reporter Magazine (December 1997)
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The Ship Repair & Conversion exhibition in London last month provided a forum not only for com- panies to exhibit their wares, but to air their grievances on what ails the industry.
Ship repair and conversion busi- ness has battled many of the same issues found on the newbuild side, namely the problem of too much capacity — much of it coming on- line from developing countries — which is helping to keep prices arti- ficially low.
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Astilleros Espanoles: Moving
Forward With Quality
Spain's Astilleros Espanoles group serves well as a microcosm of the changes sweeping the world ship repair and conversion indus- try. By the end of 1998, the tradi- tional European shipbuilding and repair powerhouse must proceed with plans to privatize and get all of its yards profitable, all the while implementing drastic capacity reductions. At the same time, the yard is faced with a price-driven, cut-throat competition repair and conversion market.
According to Astilleros
Espanoles, the main problem in running a profitable ship repair and conversion operation is the result of unregulated shipyard capacity expansion. "Everybody is busy, but prices are still depressed because the market is still unbal- anced," said Astilleros Astander executive Angel F. Diaz-Munio. "If we have to be ruled, the rules have to be the same and equal for all."
In order to comply with the EU- mandated capacity reduction pro- gram, Astilleros has had to ban
Astander from conversion work, allowing only repair jobs for the yard. Meanwhile, the Astano yard is limited to offshore work. While subsidy matters, and particularly the passage of the OECD agree- ment, are viewed by the group as critical to creating the mythical level playing field, Astilleros believes that worldwide capacity reduction is just as crucial of a link to restoring balance to the repair and conversion markets, and the heart of restoring profitable pric- ing levels.
While up front pricing is, of course, important, Mr. Diaz-
Munio said that the whole spec- trum of the job — completed cor- rectly and on schedule — is vital to determining the real cost of a job.
Despite the challenges, the group as a whole and the Astander yard specifically have maintained a very positive level of work, depending on loyal customers and focusing on jobs where high quali- ty and high technical solutions have priority over price. "It is difficult to compete with the up and comers on price," said
Diaz-Munio. "To expand our markets, we must find the cus- tomers who are more interested in quality, safety and price." This stance is proven on the yard's ref- erence list for the six month period from May to October 1997, a list which includes 33 vessels, ranging from chemical tankers from JO
Tanker and Storli, to a reefership from Norbulk Shipping and a LGC ship from Hanseatic. In a typical gn Software
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NavCad offers an integrated platform to predict resistance and power, and to determine optimum propeller parame- ters. With NavCad each aspect of a ship's performance can be evalu- ated for virtually every type of displacement hull, semi-displacement and planing craft, river barge train, catamaran and auxiliary- powered sailboat.
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