Page 8: of Maritime Reporter Magazine (December 1998)

INVESTMENT IN DESIGN

Europeans Hang On With Technology by David Tinsley, technical editor

European shipbuilding's ever- slackening hold on the indigenous market for the larger types of cargo-carrying vessel has been emphasized by recent contracts placed in Japan and South Korea by owners from communities tradi- tionally loyal to national industries where the capability, if not the will, has been retained to build high- capacity crude carriers and bulk- ers.

In the face of domestic economic adversity, Korean shipbuilders in particular have demonstrated for- titude of an order which tran- scends any advantageous position conferred by a weakened currency.

But time will tell whether struc- tural changes to the industry in other parts of eastern Asia, precip- itated by economic crises in the region, will impact on the market and hence on the seemingly inex- orable drift of business towards the

Orient.

Despite Europe's loss of produc- tion of the most populous cate- gories of deepsea merchant vessel, sectors of the industry have dis- played a tremendous business resilience, maintaining markets and competitiveness through a focus on technology and production processes.

Cruise ship construction is a case in point, but world-class effi- ciency in turning out altogether more modest vessel types is also clearly evident.

Dutch shipbuilding, in particu- lar, has demonstrated a level of efficiency in small-vessel construc- tion on a scale scarcely matched in any other part of the world, which stems not only from technical and design skills, but from organiza- tional methods, notably a far-sight- ed approach to outsourcing coupled with investments in areas of spe- cialization.

While welcoming the impending abolition of EU subsidies, there is a growing feeling in those quarters that the European Commission needs to re-think its shipbuilding policies so as to better enable the more dynamic sectors of the indus- try to thrive and contribute to the wider economic well-being.

It could be said that the EU would do well to nurture such areas of enterprise and competence in the face of growing internation- al uncertainty. "It is striking that capacity con- trol of the European shipbuilding industry is still an issue," observes

Central Industry Group (CIG), a

Dutch company heavily involved in ship steel fabrication, shipbuild- ing, design and marine engineer- ing. "If the sector is to flourish and blossom, the policy to be pursued should be proactive and stimulat- ing rather than reactive, subsidy- oriented and restrictive of capaci- ty."

The industry in the Netherlands considers itself strong enough to maintain its position in a globally subsidy-free environment.

The manner in which firms have retained viability and competitive- ness should perhaps be better appreciated by the Commission, which often models its policies on

Japan, despite fundamental differ- ences between the industries in

Japan and Europe as regards generic ship type focus, unit scale, corporate diversification and ship- building profitability. "It would be better if the EC were to follow the top segment of productive European shipyards and to benchmark these," suggests

CIG. "From a conceptual perspec- tive, the top segment of the

European shipyard industry might well be better prepared for the future than their Japanese col- leagues," it suggests. "After all, the shipyard of the future is likely to be an assembly company with a strong business orientation on project development and a clear operational focus on project management, rather than an old-fashioned, inflexible, capi- tal-absorbing and labor-intensive ship's plant.

This new type of shipyard makes use of a network of suppli- ers each specializing in his own product and often working for var- ious shipyards." "Such a structure of the indus- try will lower the risk profile of both the shipyards and their net- work of suppliers," asserts

Groningen-based CIG. The north

Netherlands, where a cluster of independent shipyards, section builders, materials and equipment suppliers, function in an integrat- ed manner, provides a showcase for such arrangements.

Dutch fortitude: 2,800-dwt feedership Heereplein on ice passage following delivery by Tille

Scheepsbouw, part of the Central Industry Group (CIG) 8 Maritime Reporter & Engineering News