Turkish Shipyards Strengthen Position in Global Repair Market: 'Now Not Just Cheap, but a Reliable Address'

With Asian shipyards filling their capacities, Turkish shipyards are rising to a strategic position in repair, maintenance, and conversion work. The 'Ship Insurance Turkey' symposium held in Istanbul addressed the new balances created by capacity constraints, off-hire pressure, insurance support, and compliance with sanctions.

The panel moderated by Bintuğ Baran Güluştür, Marketing Director of Yalova Shipyard, featured speakers including Giray Kıncal, Chief Surveyor of Ertem, Rivero & Partners, Dr. Sebastián Díaz Ribes, Partner at Bufete Díaz y Asociados, Tağmaç Gürev, Commercial Director of Beşiktaş Shipyard, and Erdem Atabey, Business Development Director at LocktonOmni.

'Twenty Years Ago, It Was Just Cheap — Today, It’s Reliable'

One of the strongest observations from the panel was regarding the transformation Turkish shipyards have undergone in the last twenty years. According to one panelist: 'Twenty years ago, Turkish shipyards were preferred mainly because they were cheap. Today, the picture is completely different. Time management — especially in repair work — has significantly improved. Twenty years ago, subcontractor management was a problem in itself; today, this issue is managed much better.'

The trust gained by Turkish shipyards in terms of quality, pricing flexibility, and resource mobilization among international shipowners was a common emphasis throughout the panel.

Off-Hire Pressure and Opportunities Created by Capacity Constraints

The saturation of capacities in Asian shipyards and the extension of repair times have intensified the pressure on shipowners to minimize off-hire periods. This point was particularly emphasized during the panel: 'In a period where there are capacity constraints and the pressure to reduce off-hire time is increasing, timely delivery is a critical factor.'

This equation places Turkish shipyards in a favorable position, combining geographical proximity, capacity, and compliance.

Turkish Insurance Legislation: Local Insurance Requirement

An important reminder regarding Turkish law was also made during the panel: According to the Insurance Law, insurance for risks located in Turkey must be obtained from a local insurance company. The legal liability of the shipyard must also be covered by a local insurance company. This structure requires the insurance architecture for repair projects conducted in Turkey to be designed with both local and international elements.

From the Underwriter's Perspective: The Shipyard's History is Determinative

The evaluation criteria from the insurance side were also discussed during the panel. Underwriters do not only look at the current capacity of a shipyard; they also consider past projects, experience in building/repairing similar types of vessels, and organizational stability. 'If you invest in working with different types of customers over the years, in the end, underwriters and insurance companies find it easier to trust your organization. When you successfully complete a project — especially when the factors we discussed come together — the risk assessment from underwriters changes positively.'

This dynamic necessitates that Turkish shipyards build long-term relationships not only with employer shipowners but also with the international insurance market.

Loss of Hire: The Real Cost of Extended Repair Times

In a survey conducted in the room, the participants' response to the question regarding the biggest financial consequence of prolonged repairs and delays was clear: Loss of Hire exposure. Panelists shared an observation on this point: Underwriters are no longer adhering to uniform ship repair times; they want to measure the risk exposure of each project separately. Surveyor reports emerge as a critical tool in this process to minimize risk.

Compliance with Sanctions: 'Turkey is Not Ignoring Sanctions'

The most critical discussion on sanctions in the panel began by correcting a common misunderstanding: 'There was confusion regarding sanctions: Is Turkey implementing sanctions or not? This must be clear: Since Turkish insurance companies are in a reinsurance relationship with the Western market, they are obliged to comply with the sanctions accepted by the Western market. In other words, the Turkish insurance system is not outside the sanctions regime.'

Another critical aspect of this point concerning shipyards was discussed: cumulative risk. The acceptance of a vessel under sanctions into a shipyard affects not only that vessel's risk profile but also that of other vessels nearby. Therefore, panelists made a common recommendation: Shipyards should conduct a comprehensive compliance check not only on the vessel but also on the shipowner and affiliated companies before accepting a vessel.

Conclusion: 'The Spectrum is Now Much Broader'

The panel revealed that Turkish shipyards are now competing in the global repair market not only with price advantages but also with capacity, quality, time management, insurability, and compliance infrastructure. According to one panelist: 'The risk assessment spectrum of underwriters is now much broader. Turkish shipyards are evaluated not only on capacity and capability but also on a historical reference list — and the quality of this list determines market positions.'

In this period where the capacity vacated from Asia is directed towards Turkish shipyards, the main challenge for the sector will be to sustainably manage this growth alongside insurance, compliance, and quality infrastructure.

Source: SeaNews Türkiye