Shipbuilding industry targets growth

 VSM Annual Report 2022/2023 

Cast off, set course for growth! With this motto, the German Shipbuilding and Ocean Industries Association (VSM) is appealing to the federal government and the EU to finally realise the enormous growth prospects, opportunities and tasks for the maritime industry in Germany. These include energy-efficient merchant ships, facilities and ships for renewable energy, securing raw materials and marine mining, offshore wind energy, sustainable energy import infrastructure, a powerful naval fleet for national and alliance defence, protection of critical infrastructure on and under water, etc. Germany not only has a lot of catching up to do here, but it is also important to utilise these prospects and opportunities. Therefore, its maritime industry must grow by at least a factor of two over the next 5 to 10 years in order to be able to make its contribution to the major tasks. Orders are a crucial prerequisite for growth. The VSM is concerned about the weak order intake for new ships in Germany. Orders totalling just USD 1 billion were received in 2022 - the lowest level in 7 years. In contrast, China alone received orders worth USD 63.5 billion in 2022, which corresponds to half of the entire global market. And South Korea received orders worth USD 45.7 billion, accounting for around 40 per cent of all orders. Europe only received 5.4 billion dollars - a market share of just around 5 per cent. The report also criticises the procurement processes for the German Navy. It notes that despite the proclaimed turnaround, there are no concrete procurement plans to be implemented in the short term, taking into account the defence industry's key technology of naval shipbuilding. After all, naval shipbuilding generates around one third of the total turnover of German shipbuilding companies. The German naval shipbuilding industry with its shipyards, system houses, component manufacturers, suppliers and service providers is an important strategic factor for Germany as a business location.

One of the VSM's suggestions is that maritime transport within Europe should increasingly be awarded to shipping companies with ships from domestic shipyards. This would not only secure jobs, but would also contribute to the preservation of the shipbuilding industry. Currently, the most important markets for the German shipbuilding industry include cruise ships, yachts and research vessels. The VSM wants to maintain the global technological leadership of the German shipbuilding industry in this sub-segment. It warns against changing the necessary framework conditions for cruise ships and yachts, such as market-driven financing instruments, or even sacrificing them to an ideological debate. Instead, the technological leadership in this sub-segment should be further expanded.

With around 2,800 companies and approximately 200,000 employees, the German shipbuilding industry, including the supply industry, represents a key pillar of Germany as a business location. It is characterised by medium-sized companies, is export-oriented and is a technology leader in many areas. With its international orientation, it is particularly exposed to enormous international competition. In view of the crises and conflicts worldwide, it faces considerable challenges and uncertainties. Nevertheless, the VSM takes a fundamentally positive view of its prospects and hopes for growth, although this can only be achieved with political support. VSM President Harald Fassmer emphasised: "All we need now is the political courage to leave the beaten track and break new ground." (ds)

Dieter Stockfisch