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Article
16
May 2013
T
urkish shipyards, like other
shipyards in the world, experi-
enced its golden age during the
period of 2000-2007 due to both
increase in the world seaborne trade since
the beginning of 2000s and the deci-
sion taken by both the European Union
(EU) and the International Maritime
Organization (IMO) about turning out of
single hull tankers. The financial crisis
erupted in the United States of America
(USA) at the end of 2007 has been also
effective in Turkey during the last 6
years. The Turkish shipbuilding industry,
a part of Turkish shipping and manufac-
turing industry, is still feelling the nega-
tive impact of the crisis deeply.
Why is there a lack of new orders in
Turkish shipyards, although the world
merchant fleet has been growing since
2007? I can respond to this question
with a short answer like “typological
mismatch between supply and demand”.
I think so there is a mismatch between
supply capacity of Turkish shipyards
and needs of world trade in tems of ship
types and sizes. The Turkish shipyards
have been generally specialized to build
chemical and product tankers up to 10
000 DWT and well known in this seg-
ment. Besides, a large number of order
book was consisted of these type tank-
ers, due to both increase in the world
seaborne trade since the beginning of
2000s and the decision taken by both
EU and IMO about turning out of single
hull tankers. In 2011, new building and
second hand prices of “Panamax” and
above tankers were approximately equal.
On the other hand, second hand price of a
“Handy” tanker, 5 years old, was 25 mil-
lion dollars, while its new building price
was 35 million dollars. This situation
seems to be one of the main reasons for
the lack of order in Handy tankers seg-
ment. Therefore, I can say that competi-
tive economies of scale for the countries
like Turkey is high value-added sophis-
ticated ship types in “Panamax” size.
For example; Croatia, in East Europe, is
following high value-added shipbuilding
strategy and may be the closest competi-
tor of Turkey in the near future.
Looking at the world shipbuilding
market, Far East Shipyards are still the
most popular centers for building the
large bulk carries, large tankers, LPG/
LNG carriers and container carries and
European Shipyards are also the most
popular centers for building high val-
ue-added sophisticated ship types such
as navy ships, passenger ships, Ro-Ro,
Ro-Pax etc. Turkey can determine its
position between these two poles by
turning to target markets and products
(niche markets) to be determined with
global analysis of market and compara-
tive advantages for next 20-30 years
and by strengthening the infrastructure
of the shipbuilding sector. In fact, the
Turkish shipbuilding industry succeeded
to enrich its range of products between
2003-2007 with more special type ships
such as chemical tankers and product
tankers in addition to simple type ships
such as dry cargo and bulk carriers in
the early 2000s. But, even though there
were some scientific studies like Turkish
Shipyards Master Plan which included
various analysis of medium and long
term market, competition and profit-
ability, it failed to show the same suc-
cess in expanding its range of products
between 2008-2011. On the other hand,
“Turkey’s Transport and Communication
Strategy-Target 2023”, prepared by the
Ministry of Transport,
Maritime Affairs and
Communications re-
organized in 2012,
also includes some
targets with the aim
of expanding range of
products and increas-
ing domestic value-
added in shipbuilding.
In conclusion; I
advise Turkish ship-
builders and ship own-
ers to develop joint
projects for building
high
value-added
ships such as navy
ships, passenger ships, Ro-Ro, Ro-Pax
etc. by transforming Europe crisis into
opportunities and in compliance with the
“Turkey’s Transport and Communication
Strategy “. I believe that these projects
will be the most appropriate approach to
express demands from the Turkish gov-
ernment. In addition, Turkish shipbuild-
ers and ship owners have to seriously
think about the national production of
marine engines and navigational sys-
tems, if they want to increase domestic
value-added in shipbuilding.
n
Turkish Shipbuilding Sector in
the 2000s
Fatih Yılmaz