ANNUAL REPORT 2004-2005

Shipyards represented by CESA

Large shipyards (with ~1000 employees and more) Shipyards undertaking exclusively repair and conversion Other shipyards (small and medium sized; newbuilding & repair & conversion)

Shipyards represented by CESA

(for full contact details please refer to http://www.cesa-shipbuilding.org)
BE 1 DE 1 DE 1 DE 1 DE 1 DE 1 DE 2 DE 2 DE 3 DE 4 DE 5 DE 6 DE 6 DE 6 DE 6 DE 6 DE 6 DE 6 DE 7 DE 8 DE 8 DE 8 DE 9 DE 9 DE 10 DE 10 DE 11 DE 12 DE 13 DE 13 DE 13 DE 14 DE 14 DE 15 DE 16 DE 17 DE 18 DE 19 DE 19 DE 20 DE 20 DE 21 DE 22 DE 23 DE 24 DE 24 DE 25 DE 26 DE 27 DE 28 DE 28 DE 28 DE 29 DE 30 DE 31 Antwerp Shiprepair N.V. Fr. Fassmer GmbH & Co. KG Lrssen Bardeneth GmbH & Co. KG CON-MAR Ingenieurtechnik GmbH & Co. Handels KG Elsether Werft GmbH & Co. KG Abeking & Rasmussen GmbH & Co. KG, Schiffs und Yachtwerft Aker Warnemnde Operations GmbH Neptun Stahlbau GmbH Aker MTW Werft GmbH Arminius Werke GmbH Binger Schiffswerft Ing. Dieter Schaefer GmbH Blohm + Voss GmbH Heinrich Buschmann & Shne GmbH Schiffswerft J.J. Sietas KG Schiffswerft GmbH & Co. Julius Grube KG GmbH & Co Schiffswerft M. A. Flint GmbH Schiffswerft von Clln GmbH & Co. SSB Spezialschiffbau Oortkaten GmbH Bodan-Werft Metallbau GmbH & Co. KG Cassens Werft GmbH Nordseewerke GmbH Schiffswerft Diedrich GmbH & Co. KG Detlef Hegemann Rolandwerft GmbH & Co. KG Fr. Lrssen Werft GmbH & Co. KG Deutsche Industriewerke GmbH Mitschiffs Service mss GmbH Erlenbacher Schiffswerft Maschinen- und Stahlbau Flensburger Schiffbau-Gesellschaft mbH & Co. KG Gebr. Friedrich KG Schiffswerft Howaldtswerke-Deutsche Werft AG Lindenau GmbH Schiffswerft & Maschinenfabrik Krger Werft GmbH & Co. KG Nobiskrug GmbH Hitzler Werft GmbH Husumer Dock- und Reparatur GmbH & Co. KG Jos. L. Meyer GmbH Klner Schiffswerft Deutz GmbH & Co. KG Ktter-Werft GmbH Schulte + Mller Schiffswerft GmbH Lloyd Werft Bremerhaven GmbH SSW Schichau Seebeck Shipyard GmbH Lux-Werft und Schiffahrt GmbH Meidericher Schiffswerft GmbH & Co. KG Mtzelfeldtwerft GmbH Neue Jadewerft GmbH Turbo-Technik Reparatur-Werft GmbH & Co Neue Oderwerft GmbH Peene-Werft GmbH Wolgast Peters-Schiffbau GmbH Schiffswerft Hermann Barthel GmbH Schiffswerft Bolle GmbH Derben Schiffbau- und Enwicklungsgesellschaft Tangermnde Schiffswerft Wilhelm Fleischhauer Volkswerft Stralsund GmbH Werft und Servicezentrum Mittelrhein GmbH DE 32 DK 1 DK 2 DK 3 DK 4 DK 5 DK 6 ES 1 ES 1 ES 1 ES 2 ES 3 ES 3 ES 3 ES 3 ES 3 ES 3 ES 4 ES 4 ES 5 ES 6 ES 6 ES 6 ES 6 ES 7 ES 8 ES 8 ES 8 ES 9 ES 10 ES 11 ES 12 ES 13 ES 13 ES 13 ES 14 ES 14 ES 15 ES 16 ES 17 FI 1 FI 2 FI 2 FI 3 FI 4 FI 5 FR 1 FR 1 FR 2 FR 3 FR 4 FR 4 FR 5 FR 5 FR 6 FR 7 FR 8 FR 9 GB 1 GB 1 GB 1 GB 2 Schiffswerft Laubegast AG Aarhus Shipyard Ltd. Danyard Aalborg Ltd. Karstensens Shipyard Ltd. Odense Steel Shipyard Ltd. Orskov Yard Ltd. Soeby Shipyard Ltd. Astilleros Gondan, S.A. Astilleros Armn Navia Astilleros Armn Puerto de Vega Astilleros Armn Burela Astilleros Barreras Construcciones Navales P. Freire Factoras Vulcano Metalships & Docks, S.A. Astilleros Armn Factora Naval de Marn Diques Navales Pasaia Astilleros Balenciaga Astilleros Canarios (ASTICAN) NAVANTIA Fene NAVANTIA Carenas Ferrol Astilleros Jos Valia Astilleros y Talleres Ferrolanos Astilleros SICAR Astilleros de Murueta Astilleros Zamakona IZAR Sestao Astilleros de Huelva, S.A. Astilleros de Mallorca Astilleros de Santander NAVANTIA Carenas Cartagena NAVANTIA Carenas Cdiz NAVANTIA Puerto Real NAVANTIA Carenas San Fernando IZAR Gijn NAVAL GIJON IZAR Sevilla Unin Naval de Barcelona Unin Naval de Valencia Aker Finnyards Turku Repair Yard Ltd Aker Finnyards Aker Finnyards Technip Offshore Finland OY Uki Workboat Alstom Leroux Naval (Lanester) D.C.N. Lorient Chantier Piriou Chantiers de lAtlantique Constructions Mecaniques de Normandie D.C.N. Cherbourg D.C.N. Brest SOBRENA D.C.N. Toulon SOCARENAM (Boulogne-sur-Mer) ARNO- Dunkerque CMR A & P Birkenhead Ltd Northwestern Shiprepairers & Shipbuilders Ltd McTay Marine A&P Shipcare - Chatham GB 2 GB 2 GB 3 GB 3 GB 4 GB 5 GB 6 GB 7 GB 8 GB 8 GB 9 GB 10 GB 11 GB 11 GB 12 GB 13 GB 14 GB 15 GB 15 GB 16 GB 16 GB 17 GR 1 GR 2 GR 3 HR 1 HR 1 HR 2 HR 2 HR 3 HR 4 HR 5 IT 1 IT 1 IT 1 IT 2 IT 3 IT 3 IT 3 IT 3 IT 4 IT 5 IT 6 IT 7 IT 8 IT 9 IT 9 IT 9 IT 10 IT 10 IT 11 IT 11 IT 11 IT 12 IT 13 IT 14 NL 1 NL 1 NL 2 NL 3 NL 3 NL 3 L&M Shipyards Ltd A&P Shipcare - Tilbury A&P Falmouth Limited Pendennis Shipyard Ltd A&P Shipcare - Dover A&P Shipcare - Ramsgate A&P Southampton Ltd BAE - Barrow in Furness BAE Systems - Yarrow Yard BAE Systems- Govan Buckie Shipyard Ltd Dunston (Ship Repairers) Ltd Fleet Support Limited VT Shipbuilding Harland and Wolff Holdings Plc Macduff Shipyards Ltd Milford Haven Ship Repairers Richards Dry Dock & Engineering Ltd Small & Co A&P Tyne Limited Pallion Engineering Ltd A&P Teeside Elefsis Shipyards Hellenic Shipyards Co. Neorion New S.A. Syros Shipyards 3M Maj Shipyard V. Lenac Shipyard (under bankruptcy) Brodosplit Naval&Special vessel Shipyard Brodosplit Shipyard Brodotrogir Shipyard Shipyard Kraljevica Uljanik Shipyard Navalimpianti S.p.A. T. Mariotti Cantiere Navale Fincantieri Sestri Cantiere Navale S.p.A. Fincantieri S.p.A. - Stabilimento di Palermo Cantiere Navali Vittoria S.p.A Fincantieri Cantiere di Marghera Cantiere Navale De Poli SpA Cantiere Navale Visentini S.r.l Cantiere Navale Di Pesaro Cantiere Navale E. NOE Cantiere Navale F.lli Giacalone Fincantieri Cantiere di Ancona Cantiere Navale di Trapani SPA Cantiere Ravenna S.r.l. Naviravenna Rosetti Marino SpA Cantiere San Marco S.r.l Fincantieri Cantiere di Muggiano Fincantieri Cantiere di Castellammare Cantiere del Mediterraneo SPA Palumbo S.r.l. Fincantieri Cantiere di Monfalcone Fincantieri Cantiere di Riva Trigoso Nuovi Cantieri Apuania Scheepswerf Peters B.V. A. & L. Hoekman B.V. Akerboom Yacht Equipment Alblasserdam Yachtbuilding B.V. Werf Alblasserdam B.V. Scheepswerf Hoebe B.V.

NL 3 NL 3 NL 3 NL 3 NL 3 NL 3 NL 3 NL 3 NL 3 NL 3 NL 3 NL 3 NL 3 NL 3 NL 3 NL 3 NL 3 NL 3 NL 3 NL 3 NL 3 NL 3 NL 4 NL 5 NL 5 NL 5 NL 6 NL 6 NL 6 NL 6 NL 7 NL 7 NL 7 NL 7 NL 7 NL 8 NL 8 NL 9 NL 9 NL 9 NL 9 NL 10 NL 10 NL 10 NL 11 NL 12 NL 12 NL 12 NL 12 NL 13 NL 14 NL 14 NL 14 NL 14 NL 14 NL 14 NL 14 NL 15 NL 15 NL 15 NL 15 NL 16 NL 16 NL 17 NL 18

Scheepsbouwbedrijf Het Anker Scheepswerf & Machinefabriek t Ambacht B.V. Scheepswerf v/h C. Buitendijk B.V. IHC Holland Dredgers B.V. Smits Machinefabriek en Scheepsreparatie B.V. Van Grevensteins Scheepswerf B.V. Breko Nieuwbouw B.V. Breko Reparatie B.V. Scheepswerf Slob B.V. D. van de Wetering B.V. Damen Shiprepair Van Brink Yard Maatschappij De Maas B.V. Scheepswerf Hoogerwaard B.V. Serdijn Ship Repair B.V. Keppel Verolme B.V. Damen Shiprepair Niehuis Yard Damen Shiprepair Rotterdam United Yard Nicoverken Holland B.V. IHC Holland Beaver Dredgers B.V. Scheepswerf L.J. Boer Sliedrecht B.V. Gebr. Kooiman B.V. Scheepswerf en Machinefabriek Scheepsreparatie en Constructie- bedrijf H. Niessen B.V. Volharding Shipyards Harlingen B.V. Amels B.V. Schelde Marinebouw B.V. Scheldepoort B.V. Repair & Conversion Yard Amsterdam Ship Repair B.V. Oranjewerf Scheepsreparatie B.V. Vosta LMG B.V. Scheepswerf Vooruit B.V. Scheepswerven Gebr. G. & H. Bodewes B.V. B.V. Scheepswerf De Kaap Scheepswerf Wout Liezen B.V. Bodewes Binnenvaart B.V. Scheepswerf Geertman B.V. B.V. Scheepswerf Maaskant Dokmaatschappij Padmos Stellendam B.V. B.V. Scheepswerf en Machinefabriek Vahali Scheepswerf Grave B.V. Scheepswerf Gelria B.V. Scheepswerf De Hoop Lobith B.V. Ceelen Shipyard B.V. Barkmeijer Stroobos B.V. Damen Shipyards Bergum Bijlsma Shipyard B.V. Niestern Sander B.V., Royal Volharding Shipyards B.V., locatie Foxhol Bodewes Shipyards B.V. Scheepswerf Ferus Smit B.V. Damen Dredging Equipment Nederlof Scheepsbouw B.V. Damen Shipyards Gorinchem Damen Shipyards Hardinxveld Merwede Shipyard B.V. Scheepswerf Jac. den Breejen B.V. Shipyard K. Damen Instalho B.V. Marinebedrijf Divisie Platform Scheepswerf Visser B.V. Luyt Groep B.V. Texdok bv Maaskant Bruinisse B.V. Machinefabriek Padmos Bruinisse B.V. Scheepswerf De Schroef B.V. Scheepswerf en Machinefabriek Maasbracht N.V.

NO 1 NO 1 NO 1 NO 1 NO 1 NO 1 NO 1 NO 2 NO 3 NO 4 NO 5 NO 6 NO 7 NO 7 NO 8 NO 8 NO 9 NO 10 NO 11 NO 12 NO 12 NO 13 NO 14 NO 15 PL 1 PL 1 PL 1 PL 1 PL 2 PL 2 PL 3 PL 4 PL 4 PT 1 PT 2 PT 3 PT 4 PT 5 RO 1 RO 1 RO 2 RO 3 RO 4 RO 4 RO 5 RO 5 RO 6 RO 6

Akeryards Brattvaag Skipsverft Fiskerstrand Verft AS Sviknes Verft AS Akeryards Aker Langsten Solstrand AS Kleven Verft AS Ulstein Verft AS Kleven Flor AS Akeryards Aker Aukra Akeryards BrevikConstruction AS Vaagland Batbyggeri Bergen Yards AS Fjellstrand AS Eidsvik Skipsbyggeri AS Flekkefjord Slipp og Maskinfabrikk AS (Flekkefjord Yard) Simek AS Fosen Mekaniske Verksteder AS Havyard Leirvik AS Moen Slip AS Myklebust Verft AS Larsnes Mek.Verksted AS Havysund Patentslipp AS Umoe Mandal AS Kimek AS Wisa Shipyard Ltd Gdaska Stocznia Remontowa im. J. Pilsudskiego S.A. Stocznia Gdanska-Grupa Stoczni Gdynia S.A. Stocznia Pnocna S.A. SHIPREPAIR YARD NAUTA S.A. Stocznia Gdynia SA Stocznia Szczecinska Nowa Sp. z o.o Morska Stocznia Remontowa S.A. Szczecin Shiprepair Yard Grya JSC Estaleiros Navais de Viana do Castelo S.A. LISNAVE, Estaleiros Navais, SA Naval Rocha Navalria - Docas; Construes e Reparaes Navais, SA Estaleiros Navais do Mondego, SA S.C. Aker Shipyards Braila S.A. S.C. Damen Shipyards Galatzi S.A. S.C. Aker Shipyards Tulcea S.A. S.C. Navol S.A. Oltenita S.C. Severnav S.A. S.C. Santierul Naval Orsova S.A. S.C. Santierul Naval S.A. Constantza S.C. 2x1 Holding Cape Midia S.A. S.C. DMHI (Daewoo Mangalia Heavy Industries) S.A. S.C. Mangalia Shipyard S.A.

Large shipyards Shipyards undertaking exclusively repair and conversion Other shipyards

Foreword

European shipyards have marked a path of most dynamic development. What was seen as primarily a labour intensive industry in the past has become a community of knowledge based and capital intensive high-tech factories. 43% more output with 36% less the workforce as explained in chapter one is perhaps the clearest indication of the dynamism. The fact that European shipyards invest on average 10% in research, development and innovation proves the high-tech content. The anticipation of market requirements and priority for total customer satisfaction are the focal points for European yards. The challenging business environment of world shipbuilding offered exciting opportunities as well as demanding problems in 2004. After the weak demand had bottomed out at the end of 2002, European yards could nearly double their order intake for the second year in a row in 2004.The positive trend has further continued into 2005, with the CESA market share in new orders reaching almost 20% of the world market. Today, the global shipbuilding market enjoys a balance of supply and demand, which was absent for two decades. However, we are aware that this situation will not last forever. The encouraging developments are accompanied by worrying forecasts of even increasing structural overcapacities in world shipbuilding. But the consensus in Europe within the industry as well as regards policy makers is a solid fundament resulting in the right framework enabling success.The LeaderSHIP 2015 initiative has launched a new era in this respect. Europe is determined to succeed. CESA invests much of its energy in developing international cooperation within the shipbuilding industry. The constructive dialogue among leading shipbuilders worldwide advances common goals and underlines mutual respect. Consensus is required to progress further also as regards a safe and environment-friendly maritime industry. We owe our children a cleaner world and improved sustainability. CESA recognises its responsibility and is dedicated to enhancing the eco-balance of the sector. European Shipyards technical excellence and innovative power will signicantly contribute to smarter solutions for waterborne transport and other maritime operations. The European Union has underlined with a number of recent initiatives, such as the Maritime Task Force, the Waterborne Technology Platform and plans to reform the EU engagement at IMO, that it is prepared to take global leadership on maritime affairs. We are pleased to present the rst CESA Annual Report. Succeeding the tradition of the AWES Annual Reports, CESA, after its merger with AWES in 2004, offers a comprehensive and frank reection of CESAs scope of activities. Brussels, June 2005 Patrick Boissier CESA Chairman Foreword
CESA 2004 - 2005

CESA 2004 - 2005

Index

1. European market 2. World market 3. LeaderSHIP 2015 4. International relations 5. Research, development and innovation 6. Safety and environment 7. Social Dialogue 8. Global shipbuilding requirement and capacity 9. Shiprepair sector 10. Naval sector 11. CESA working groups and committees 12. Reports of the National Associations 13. CESA social events

4 6 8 14 17 20 29 30 33 36 37 43 67

Annex 1: Statistics 2004 Annex 2: CESA Member Associations Annex 3: CESA internal Annex 4: Glossary Annex 5: Picture reference

68 74 76 80 82

CESA 2004 - 2005

Index

1.

European market

European Shipbuilding Sector

CESA, representing the shipyards in 15 European countries, covers 99% of the EU shipbuilding production and more than 85% of wider geographical Europe including the shipbuilding nations Bulgaria, Turkey and Ukraine. European shipyards offer products in three areas: construction of merchant vessels, repair and conversion and naval production. CESA members hold some 20% of the worldwide production capacity of merchant ships and provide jobs for more than 115,000 highly skilled employees. Roughly 70% of the total production is sourced across Europe in a network of more than 9.000 sub-suppliers, mostly SMEs, stimulating signicant additional job effects. The strength of the European Shipbuilding Industry is attributed to dynamic developments. Within two decades, production methods revolutionised. An impressive Rationalisation coupled with active outsourcing strategies have reduced the total workforce directly employed by shipyards from 182,663 in 1985 to 116,696 in 2004.

The network of highly specialised subcontractors is the result of that development. Concurrent engineering and the use of ad vance information technology applications enables suppliers to take the role as project partners which deliver entire turn-key systems. Innovative solutions are often developed jointly within the close cooperation on a concrete project.

The European shipbuilding in dustry is the global leader in the production of cruise ships and several other high tech niches. Signicant market positions are held with regard to last genera tion transport vessels such as containerships, product & chemi cal carriers, multipurpose cargo vessels and car carriers as well as for high value-added vessels including fast ferries, LNG car riers, off-shore hard-ware, dredgers, cable- and pipe-laying vessels, heavy lift ships, semi-submersible crane vessels and highly specialised smaller vessels e.g. sh production vessels, mega-yachts, inland waterway vessels, tugs, multipurpose salvage and environmental protection vessels.

European market

CESA 2004 - 2005

While order intake is comparatively volatile, production output remained fairly stable in Europe over the past decade with an average annual growth of about 2% p.a. in terms of tonnage. Order intake related to construction of merchant ships saw a v-shaped recovery after a slump two years ago. 2004 brought the second highest level of new orders of the past decade.The orderbook provides a healthy three year production volume. Reecting the weak demand two years ago, 2004 production in cgt decreased by 10% compared to 2003.

CESA 2004 - 2005

European market

2.

World market

The global shipbuilding market is experiencing a particularly strong period with historical records regarding production as well as regarding new orders and orderbook volumes.

Deliveries
In 2004, shipyards worldwide delivered 1.729 vessels. Total deliveries amounted to 25,5mill cgt, of which more than three quarters were produced by Asian shipbuilders in China, Japan and South Korea. With 16,5% of the tonnage European Shipyards (countries covered by CESA) are the only competitors with a meaningful market share outside Asia. This, all the more so, if the production values are taken into account. Although the European production (in cgt) in 2004 decreased by 10% compared to 2003, reecting the weak demand two years ago, European yards maintained the leading position in terms of production value.

New orders

The remarkable order frenzy of 2003 was even surpassed in 2004 by 8%. European yards recorded the strongest increase in new orders from 4 million cgt in 2003 to 6.8 million cgt in 2004. The corresponding market share rose from 9,6% to 15,1%.

World market

CESA 2004 - 2005

China increased the order intake in line with the global average and maintained a market share of 12,6%. Japanese yards recorded 16,1% more orders with a market share of 30,3%. Korean yards were not able to maintain the very strong 2003 level and recorded 15, 1% less orders in 2004, however still maintaining the number one position with a market share of 35%. Price-levels have substantially improved and, in $-terms, reached the highest level since more than a decade. However, taking the strong euro into consideration, price developments have only been moderately positive.

Product Portfolio

The world orderbook at the end of 2004 reached another all-time record of more than 90 million cgt which is more than three and a half times the current annual out-put level. The rm demand sentiment is perhaps best reected by the substantial increase in orderbook length, i.e. in comparison with the annual production.

CESA 2004 - 2005

World market

3.

LeaderSHIP 2015

Introduction
In the perception of many shipyards in Europe, Community policy toward the sector focused during the 1990s almost exclusively on the enforcement of the stringent state aid regime. Only a limited number of yards were engaged in EC R&D framework programmes and trade policy stalled as everyone waited for US ratication of the 1994 OECD agreement. Thus, a comprehensive and clear strategic approach for the sector that would link the different policy elds and establish concrete action did not exist neither on the side of policy makers nor within the industry community. Shipyards acknowledged that the challenges in the world market could no longer be solved without a coordinated approach at European level. Therefore, CESA decided to tackle this situation and successfully managed a joining of forces of all stakeholders, rst within industry but soon also involving policy makers. A concept outline presented to the European Commission in early 2002 was well received and Commission President Prodis supportive response further encouraged the industry to continue the initiative with determination. By October 2002, CESA handed over the rst comprehensive and proactive industry roadmap for a successful future of the sector.

LeaderSHIP 2015: determination to succeed

LeaderSHIP 2015

Enterprise Commissioner Liikanen, who took the responsibility for LeaderSHIP 2015 on the Commission side, was equally determined to press on with the initiative. He established a High Level Advisory Group in early 2003 that fully deserved its title. From the European Parliament, the Chairman of the Conservative party and the socialist Chairman of the Industry Committee participated and no less than seven Commissioners lent their support to the initiative and together with the marine equipment industry and the trade unions. Only nine months after its inauguration, the Group presented its report, which, a few weeks later, was transposed into a Commission Communication. For CESA, these were crucial decisions because, for the rst time, the shipbuilding industry in Europe had been equipped with a comprehensive policy approach which gave the clear signal: Europe is determined to succeed and its yards will continue to be important players in the shipbuilding world in 2015 and further ahead. These are the issues covered by the LeaderSHIP 2015 report as well as the Commission Communication and the progress achieved so far:

CESA 2004 - 2005

 A Level Playing Field in World Shipbuilding

Problems: World shipbuilding suffers from a structural imbalance of supply and demand with a short period of relief (as now) and a long period of depression. Injurious pricing practices add to the distortion of competition. The resulting price depression and price suppression are leading to losses and ultimately to subsidisation and protectionism in many forms. International trade rules are difcult to apply to shipbuilding. Recommendations: Continuation of the present EU trade policy approach with determination. Full enforcement of applicable WTO rules to shipbuilding. Development of enforceable OECD disciplines through a new shipbuilding agreement by 2005 and an unambiguous interpretation of existing rules. Progress: The shipbuilding market in 2004-2005 is enjoying for the rst time in two decades a period of equilibrium of supply and demand; nevertheless the problems above are structural and remain unchanged. The EC indeed vigorously pursued all available avenues to address the issue. The WTO procedures on shipbuilding were nalised in 2005; while conrming the existence of some prohibited government measures, the procedures also claried that the legal system of the WTO has difculties in coping with the specic characteristics of shipbuilding. Effective international rules to be agreed at the OECD have, therefore, become even more important.

Improving Research, Development and Innovation (RDI) Investment

Problems: European shipbuilders have to compete internationally through advanced technological solutions, not through low costs. RDI investment is therefore key. In RDI, shipbuilding differs from other manufacturing industries, but this is not reected in the application of the current Community Regulation. The creation of shipbuilding knowledge, almost always integrated in prototype development, is not sufciently supported. Recommendations: The European dimension of shipbuilding RDI should be strengthened through integrating and concentrating efforts, with the aim to create Technology Platforms. Work being undertaken within the Maritime Industries Forum should form the base for this approach. Shipbuilding should, in substance, enjoy the same conditions as other industries that engage in similar RDI activities. Support intensities need to reect the actual technological risks taken in all phases of design, development and production.

CESA 2004 - 2005

LeaderSHIP 2015

 New denitions, notably regarding innovation support, need to be developed where necessary. RDI investment support needs to aim at enhancing European technological leadership and should reward risk taking. Progress The Technology Platform WATERBORNE TP was successfully launched in January 2005 and is expected to conclude a Strategic Research Agenda by the end of 2005. In April 2005, supported within the EC Framework Programme 6 and co-ordinated by CESA, a new initiative was launched to systematically develop visionary concepts for vessels and oating structures. This project aims to establish itself as a permanent Technology Think Tank for Europes maritime industry. The new EC framework for state aid in shipbuilding, which entered into force at the beginning of 2004, has taken the a.m. recommendation fully into account and now includes appropriate provisions related to support measures for innovation; through informal cooperation with DG Competition, CESA took a central role to advise Member States as to the national implementation of innovation aid.

Advanced Financing and Guarantee Schemes

Problems: Shipbuilding projects are capital-intensive, but yards are not well suited to organise all necessary nancing elements. A number of commercial banks are pulling out of ship nancing. Non-EU competitors can rely on advanced state-supported nancing instruments. Export nancing principles are not fully applicable to shipbuilding projects. Recommendations: Explore the possibility of establishing an EU-wide guarantee fund for pre- and post-delivery nancing. The alternative of harmonising standards in EU Member States, in line with common market and OECD rules, could also be considered, albeit difcult to fully achieve. Any such tools have to be easily applicable. Export credit insurance companies, covered by appropriate re-insurance, should offer hedging instruments for currency risks. Progress: Priority has been given to establish a European wide instrument to enlarge the available volume for pre-delivery nancing, which shipyards see as the most urgent need. In January 2005, Commission Vice-President Verheugen announced the goal of creating such an instrument before the end of the year.

LeaderSHIP 2015

Promoting Safer and More Environment-Friendly Ships

Problems: Low freight rates and declining new building prices have a detrimental effect on maritime safety and the protection of the marine environment. Rogue operators can still participate in the market with impunity.

CESA 2004 - 2005

10

 The system for surveying the quality of design, construction, and repair needs enhancing. The full potential of Short Sea Shipping is not yet used. Recommendations: Existing and future EU legislation has to be strictly implemented and exported to the international level. A more transparent, uniform, efcient and independent system of technical surveys of vessels has to be promoted. A quality assessment scheme for shipyards at world-wide level should be developed, covering newbuilding and repair. Maintaining and strengthening shiprepair capabilities in Europe is important to ensure a high level of transport safety and environmental protection. An expert committee is to be established to provide technical support to the European Commission and to EMSA. The great potential of Short Sea Shipping needs to be exploited through appropriate political and economic framework conditions. Progress: The European Commission is actively pursuing a strengthened coordination role related to IMO activities. CESA supports these endeavours and advocates, in this respect, a European ratication process of adopting IMO conventions instead of the 25 separate ratications by the EU Member States. However, in the decision-making process, there is no need for change of the current IMO practices with EU Member States executing their voting right. A rst experts committee at EMSA was created in April 2004 addressing technical concerns related to double-hull oil tankers. CESA has established a Technical Advisory Committee, which contributes its expertise to the Commission and EMSA; the CESA representative to the IMO is also embedded in this working structure. CESA actively contributed to the consultation related to the Motorways of the Seas, emphasising in particular that ships have to be regarded as a fundamental part of the infrastructure for Short Sea Shipping.

A European Approach to Naval Shipbuilding Needs

Problems: Further co-operation between naval yards is hampered by diverging operational requirements of national navies. Non-harmonised export rules, and their application and interpretation, potentially distort competition. The absence of a truly common market for defence equipment makes industrial consolidation difcult. Recommendations: Joint requirements should be established to shape a number of major projects, enabling co-operation between yards and leading to inter-operability of systems, vessels and eets.
CESA 2004 - 2005

11

LeaderSHIP 2015

A key defence capability

 Member States should address the issue of harmonisation of export rules. Common rules to create a European market for defence equipment have to be developed, based on the Councils request to create an intergovernmental agency in the eld of defence capabilities development, research, acquisition and armaments. Progress: In July 2004, the European Defence Agency was established by a Joint Action of the EU Council. Its scope is to support the Member States in their effort to improve European defence capabilities and to further develop the European Security and Defence Policy (ESDP). CESA has established a new working group dedicated to naval shipyards, which brings together all major European players in this eld. Complementing the CESA activities, the European Aerospace and Defence Industry Association (ASD), has formed a group with a wider coverage including also system, equipment and service providers.

Protection of European Intellectual Property Rights

Problems: European shipbuilders and suppliers are more dependent on technological leadership than Far East competitors. The complex and comprehensive interaction in shipbuilding projects between yards, suppliers, owners, classication societies, universities and other service providers opens numerous opportunities for the leakage of knowledge. The industry has no sufciently established culture for the protection of intellectual property rights (IPR). Recommendations: The existing instruments for IPR protection (copyrights, registered designs, trademarks, patents, non-disclosure and specic collaboration agreements) need to be fully exploited. Knowledge data bases for shipbuilding, containing information about the state of the art, existing patents, the specic competitive situation for certain products and solutions, and key knowledge holders, should be built and run by dedicated IPR entities. International patent rules applicable to shipbuilding need to be examined and possibly strengthened. Progress: LeaderSHIP 2015 Several cases related to IPR in shipbuilding have been closely followed and discussions have taken place related to some of the key loop-holes. A systematic approach to the issue is intended to be launched mid 2005.

Securing the Access to a Skilled Workforce

Problems: The nature of the industry is changing, posing new skills challenges. Exchange of staff and know-how across Europe is still limited. The industry has not sufciently communicated a positive and attractive image.
CESA 2004 - 2005

12

Recommendations: Programmes for shipbuilding-specic management training need to be developed and established. New skill requirements need to be analysed and addressed, ideally through a sectoral social dialogue. Exchange of staff and know-how needs to be organised on all levels, from shop oor to academia. A publicity campaign, showing the vitality and sustainability of the shipbuilding industry, has to be implemented. Regional centres of excellence could provide crucial input for the realisation of the above recommendations. Progress: A formal Social Dialogue Committee for the shipbuilding and shiprepair sectors has been established in September 2003. It is the rst of its kind in the metal trades in Europe. An Experts workshop to exchange best practice related to training & skill retention will be held in October 2005. As part of strengthened efforts to improve the public perception of shipyards as high-tech production sites and to attract young people to the industry as well as highly skilled engineers, a Europe-wide Shipyards Week is planned for March 2006.

Building a Sustainable Industry Structure

Problems: While shipbuilding and shiprepair are for many reasons a strategic industry for Europe, the industrial structure is not optimal to achieve the desired results. International trade distortions, problematic investment decisions, in particular in Asia, and changing business patterns need to be met with a comprehensive European response. EU enlargement will create additional needs for industrial consolidation, but it will also offer opportunities. Past restructuring efforts have not always produced sustainable results. Recommendations: Non-action is not an option, neither is protectionism: The EU of the 25 must further develop its policy approach to the sector, in line with its principles on industrial policies. A consolidation process among European producers should be facilitated, providing incentives to remove less efcient production capacity and thereby freeing resources for new investments. The current closure aid rules in the EU should be scrutinised with the view to facilitate a more pro-active approach, based on the idea of aid to consolidation. Progress: The consolidation process in European shipbuilding is continuously developing. In particular Aker Yards have shown that strengthened corporate structures can be the basis for a successful IPO. Systematic analysis of parts of the European industry have identied an insufcient level of net equity, often leading to investment congestion; further discussions on this issue, developing possible means to address it, are on-going.

CESA 2004 - 2005

13

LeaderSHIP 2015

4.

International relations

World Trade Organisation (WTO)

In 2005, the World Trade Organisation has concluded its work related to a complaint by the European Union against the Republic of Korea as well as counter complaints led later. The market distortions concerned were initially addressed in June 2000, when the European Commission and Korea signed a bilateral agreement (Agreed Minutes) to promote fair and competitive market conditions in shipbuilding. The parties agreed to a number of obligations including the issue of subsidisation as well as other aspects such as nancial transparency or prevention of dumping. However, it appeared very soon that the Korean government could not implement the Agreed Mi nutes. Consequently after several further bi-lateral talks, the EC decided in June 2002 to request WTO dispute settlement proceedings and as well as to implement a Temporary Defense Mechanism(TDM) operating aid of up to 6% of the contract value for containerships, product and chemical tankers and LNG carriers. The Korean government led a counter-complaint in September 2003 targeting mainly the TDM.

Internationally binding rules are essential to stabilise the market and facilitate sustainable development

International relations

The WTO adopted the ruling on the case brought forward by the EC on 11 April 2005. It found that Korea had indeed granted prohibited export subsidies.However,the EC claim that Korea was also granting actionable subsidies which caused injury and serious prejudice to the EC was rejected.TheWTO Panel did conrm that substantial amounts of debt held by three of Koreas most important shipyards were actually forgiven or otherwise restructured by state-owned and state-controlled banks.However,these measures were not found to breach WTO rules, because the EC could not establish sufcient evidence to show that the banks acted on government order, aiming to bail out the shipyards. The ruling on the counter-complaint brought forward by Korea was published by the WTO on 22 April 2005. Korea challenged the TDM on the grounds of four different articles. It claimed that the TDM caused distortion of competition in breach of two GATT articles and was a specic action that does not take one of the forms authorised by the SCM Agreement. The WTO Panel rejected all these claims, while supporting Koreas in one respect, namely the purpose of the TDM. While the EU saw the TDM as help to yards which suffered an injury, the WTO saw it as an instrument to press Korea to stop subsidising its shipyards. The latter, however, is the exclusive right of the WTO and, therefore, has been seen as contstituting a violation of the ECs obligations. In any case, the TDM had already expired on 31 March 2005 and a prolongation was not intended.

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Organisation for Economic Co-operation and Development (OECD)

The business environment of European shipyards is determined to a large extent by global factors. For centuries, seagoing vessels have traded worldwide and their owners have purchased their equipment globally. Although the shipbuilding market has been a global one earlier than most other markets for manufactured goods, it does not enjoy globally applicable trade rules to the same extent. Tackling this problem, the OECD Council decided on 12 September 2002 to launch new negotiations on a new Shipbuilding Agreement to bring about normal competitive conditions in the world shipbuilding and repair industries. The Council mandated a so-called Special Negotiating Group (SNG), to review and address market distorting factors, in particular government support measures, pricing and other practices which distort normal competitive conditions in the world shipbuilding industry, as well as mechanisms to deal with these. CESA strongly appreciates and supports these efforts; in particular as the circumstances in the shipbuilding sector establish a particularly challenging trade policy case. The need for an international agreement on normal competitive conditions in world shipbuilding remains of utmost importance. The fact that the market currently experiences a better supply/demand balance than at any time during the last two decades does not alter the necessity for internationally applicable rules. On the contrary, it cannot be expected that the current high level of ordering will continue, and the accelerated increase of world wide production capacity, sparked by the recent order boom, will undoubtedly have lasting impact. Consequently, the structural imbalance of supply and demand remains a persistent problem. On this background, CESA has advocated an effective agreement to include: a subsidy discipline, a pricing discipline, and a workable procedure including effective remedies. The WTO case brought by the EC against Korea was intended to clarify important issues related to subsidies. However, the WTO only condemned illegal export subsidies granted to Korean shipyards. Even though it conrmed that substantial amounts of debt held by three of Koreas most important shipyards were actually forgiven or otherwise restructured by state-owned and state-controlled banks, the Panel did not, on the basis of the evidence available, conclude that these measures were actionable subsidies. The legal difculties encountered during this pure anti-subsidy procedure have conrmed CESA in its opinion that an international agreement for the sector can only be effective if a subsidy discipline is complemented by a workable pricing discipline. A predatory pricing policy by an individual yard - i.e. offering prices below its costs - can be maintained for a considerable time-span, even several years. Sufcient cash-ow to continue operation may articially be generated through fast growing orderbooks and the use of long lead times combined with high down-payments. Until the ultimate failure, which such a business model would inevitably produce under normal market conditions, numerous competitors will have suffered considerable injury. Experience has shown that political dynamics may make it very difcult for governments to refrain from supporting an important company in difculties. This is often referred to as too big to fail. However, enforcing an effective pricing discipline, which prevents prices below the real production cost of the respective company, actually prevents the accumulation of debts in the rst place.

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International relations

JECKU
Going back to an initiative launched in 1990, JECKU has established itself as a xture in the agenda of CEOs from the leading shipyards around the world. The abbreviation reects the participating countries, i.e. Japan, Europe, China, Korea and USA. The Top Executive meeting JECKU 2004 took place in Maastricht on 13-15 October 2004, hosted by the European Delegation. For Europe, the event is traditionally organised by EUROYARDS EEIG, this time supported by the CESA Secretariat. While in past years focus was mainly given to the different views on the developments in the world shipbuilding market, new items have been introduced to the agenda such as shipyards including material cost development. The JECKU 2005 meeting will be hosted by China.

Tripartite
The so-called Tripartite meeting is an international gathering of representatives from shipyards, shipowners and classication societies. In November 2004, the fourth of its kind was held in Yokohama (Japan), attended for the rst time by CESA as an observer.The largest part of the meeting dealt with an initiative by the International Association of Classication Societies (IACS) to establish common rules, initially for tankers (Joint Tanker Project) and Bulk Carriers (Joint Bulker Project). While these two shiptypes constitute important markets only for a limited number of European yards, the discussions were followed with great interest also and in particular as further common rules projects for other shiptypes are expected. Other issues addressed by the gathering were of immediate relevance to European yards, including quality standards, ship recycling or the triangular relationship between the yard, the client and the classication society.

International relations

CESA 2004 - 2005

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5.

Research, development and innovation

The permanent challenge is to innovate faster than the competitor can imitate.
Shipbuilding has changed its fundamental character from a mainly labour-intensive industry sector to capital and know-how dominated high-tech production sites. Many European shipyards are concentrating on a very select product portfolio, often comprising custom-made highly optimised one-off products. Consequently, there are a number of elements in the production process for which automation is not a cost-efcient option, leading to particularly high requirements regarding the qualication of the workforce. Competing with producers in low labour-cost countries means the success of European shipyards is crucially linked to innovative products and smarter ways of production. The permanent challenge is to innovate faster than the competitor can imitate.Therefore all efforts to further strengthen the research, development and innovation capabilities are strongly emphasised.

Framework Programme activities

Framework programmes
The European Union is supporting scientic research and technological development by funding, to contribute to the realisation of the Lisbon agenda for growth and competition. The main instruments for this funding are the consecutive EU R&D Framework Programmes (FP).

5
Research, development & innovation
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CESA, in particular its standing R&D working group COREDES, is actively dening and communicating its R&D needs. Together with the other maritime stakeholders (e.g. ship owners, classication societies, outtters, port operators, infrastructure builders, research institutes, etc.) and in the context of the Maritime Industry Forum, a strategic planning group compiled and updated a Maritime Industry R&D Master Plan, which contributed to the EU research policy and to the allocation of sufcient EU funds during the previous (FP5) and the ongoing (FP6) Framework Programme. These activities have been partly supported by the European Union through the instrument of Thematic Networks, of which CESA co-ordinates ERASTAR. Including the second call, which was the last one nished during the report period, the maritime sector has launched EU research and development projects with a total value of almost 180 M, of which approximately 107 M will be funded by the EU. Nearly 45% of the project partners are enterprises of the maritime industry (to a large extent shipbuilding and shiprepair yards). A new instrument under FP6 is the Integrated Projects (IP). The largest IP accepted in the entire programme so far is INTERSHIP, in which 7 major European shipyards teamed up with numerous suppliers, universities and research institutes, to develop ambitious integrated design and manufacturing processes for complex one-off type ships, e.g. for cruise and RoPax ships. Further IPs and Networks address main engines for ultra low emissions, maritime structures, application of new safety regulation philosophies, uid computation and, coordinated by CESA, a scenario-based think tank of shipbuilding industry and maritime universities for medium term product ideas. Since spring 2004, the preparations for the FP7 are ongoing. COREDES has contributed to these preparations in the rst line. An important result of these activities is the Technology Platform WATERBORNE, on which in the future all stakeholders in the maritime (transport) sectors as well as those of the inland waterways shall reach consensus and formulate their medium to long term vision and strategic research agenda, according to the European Commissions new R&D policy. WATERBORNE was launched in Bremen on 25 January 2005, in the presence of the Vice-President of the European Commission, Gnter Verheugen. COREDES acts as the secretariat of the Technology Platform, which was a major prerequisite to maintain a high attention level in the commission.

5
Research, development & innovation

Innovation aid
Public support for the development of prototype products is available to various industry sectors under horizontally applicable framework. Such incentives aim to increase the competitiveness by enabling the producer to better cope with the high risk related to the commercial exploitation of new developments. Prototypes in shipbuilding are regularly developed on the basis of a sales contract with a client that wishes to operate the innovative ship. However, the risk of the untested technology constitutes a substantial hurdle to the conclusion of such contracts. The 1998 shipbuilding regulation (EC 1540/98) was intended to provide a specic incentive to stimulate more innovation in shipbuilding. However, due to administrative difculties, these provisions were never able to be applied. Therefore, the new Commission Framework on support measures for shipbuilding, which entered into force in the beginning of 2004, needed to improve and strengthen support for innovation. A new denition of the concept of innovation tailored to the special needs of the shipbuilding industry was introduced and the percentage of State support for expenditure on investments needed to fund the innovative aspects of the project doubled from 10% to 20%. The important work carried out by the LeaderSHIP 2015 initiative was a key driver behind the new provisions. CESA also took a central role through informal cooperation with DG Competition, in advising Member States as to the national implementation of innovation aid.

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Preparatory Action Security Research (PASR)

Shipyards actively engage in Security Research

The Preparatory Action on 'Enhancement of the European industrial potential in the eld of Security Research 2004-2006' constitutes the Commission's contribution to the wider EU agenda for addressing key security challenges facing Europe today. It focuses in particular on the development of a security research agenda to bridge the gap between civil research, as supported by EC Framework Programmes, and national and intergovernmental security research initiatives and defence programmes. The PASR will also address how best to serve the various end user communities, from public service organisations to government departments to industry and the wider public. The budget available for security research amounts to 15 M per year. This budget is managed by DG Enterprise and complements DG Researchs FP6. PASR will ultimately form the basis for a European Security Research Programme from 2007. The rst call for proposals, opened 31 March 2004 and closed 23 June 2004, allocated funds to 7 projects (equivalent to STREP in FP6) and 4 supporting actions (equivalent to CA in FP6). These projects and supporting actions can be funded up to 75%. PASR-2004 aims to develop, demonstrate and validate technology solutions for security problems in the following ve priority areas: Improving situation awareness Optimising security and protection of networked systems Protecting against terrorism (including bio-terrorism and incidents with biological, chemical and other substances) Enhancing crisis management Achieving interoperability and integrated systems for information and communication The second call for proposals, opened on 5 February 2005 and closed on 3 May 2005, is expected to fund six to eight projects and supporting activities. Selected projects will be 'mission oriented', i.e. capable of delivering tangible results that address the 'immediate security challenges' facing Europe. The priority areas, on which PASR-2005 concentrates, are the same as in 2004.

5
Research, development & innovation
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6.

Safety and environment

Promoting safer and more environment-friendly ships reects good industrial responsibility and secures future markets
Technical issues regarding ship safety, marine environment protection and maritime security are of increasing signicance for the European shipbuilding and its industrial associations. Within the LeaderSHIP 2015 initiative, this perception has been materialised in the key area Promoting Safer and More Environment-friendly ships recommending a more transparent, uniform, efcient and independent system of technical surveys of vessels and promoting a quality assessment scheme for shipyards at world-wide level. A high level of transport safety and environmental protection is an important responsibility of all industry players and a strict implementation and export of EU legislation to the international level it will contribute to maintain and strengthen the newbuilding and shiprepair capabilities in Europe. To further underline CESAs commitment in this eld, it decided to incorporate the promotion of safe and environmentally friendly shipping, including an active contribution to the work of the IMO into its statutes. Furthermore, CESA reorganised its working structure in order to efciently coordinate all regulatory activities which are - regardless of the institutions involved - based on a common set of technical topics, in a Technical Advisory Committee (TAC). The activities of the new TAC comprise the monitoring of technical/regulatory developments and the dissemination of information to other CESA bodies and National Associations. It serves as a discussion forum in order to support the formation of opinion on CESAs technical line of policy and provides the CESA Board with recommendations and proposals facilitating the decision process. TAC may delegate specic technical issues to dedicated subgroups for in-depth analysis and position elaboration.

Safety and environment

International Maritime Organisation (IMO)

In 2004, CESAs commitment to these topics has again been demonstrated through active contribution to technical and regulatory institutions. CESA has consultative status with the International Maritime Organisation (IMO) and the Central Commission for the Navigation of the Rhine (CCNR). Although the European institutions, in particular the European Commission (DG Energy & Transport) and the European Maritime Safety Agency (EMSA), are becoming increasingly important as regional regulators of ship safety and marine environment related topics, IMO is - due to its international mandatory character - the institution of central signicance. In 2005, CESA enjoys 25 years of IMO membership as a non-governmental organisation and is still the only voice of the shipbuilding industry with consultative status.

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The following paragraphs give an overview on signicant regulatory projects which are under consideration or have been nalised at IMO in the time period covered by this annual report.

Marine Environment Protection at IMO

Protection of fuel tanks - In 2004, the Sub-Committee Ship Design and Equipment (DE) addressed the risk associated with the carriage of large amounts of unprotected fuel oil in all shiptypes, which in case of container vessels have bunker capacities in excess of the cargo tank volumes of small tankers requiring double-hull protection. In order to prevent or reduce spillage of oil carried as fuel in case of collision or stranding, DE 48 developed a new draft MARPOL Annex 1 regulation Oil Fuel Tank Protection that is intended to apply to all new ships (and major conversions) with an aggregate oil fuel capacity of 600 m3 and above. The draft regulation gives requirements for the protective location of the fuel tanks (double-hull requirements based on aggregate fuel tank capacity) and includes a maximum capacity limitation of 2 500 m3 per oil fuel tank. Based on a CESA submission, the Sub-Committee decided on the use of the probabilistic approach (simplied oil outow analysis) as an alternative method to prescriptive double-hull requirements. Ballast water management - According to the International Convention for the Control and Management of Ships Ballast Water and Sediments which has been adopted at the Diplomatic Conference in February last year, all ships will have to implement a Ballast Water and Sediments Management Plan, to carry a Ballast Water Record Book and they will be required to carry out ballast water management procedures to a given standard. Existing ships will be required to do the same, but after a phase-in period. The Diplomatic Conference also agreed on an action plan for the development of guidelines to prepare the implementation of the Convention which has subsequently been pursued by the IMO Marine Protection Committee (MEPC). However, only two (out of 12) guidelines could be nalised at MEPC 52 with a view to their adoption at MEPC 53, i.e. Guidelines for Approval of Ballast Water Management Systems and Procedures for Approval of Ballast Water Management Systems. Work on the Guidelines on Procedure for Approval of Prototype Ballast Water Treatment Technologies is advanced to a large extent. The remaining guidelines will be further developed intersessionally and at BLG 9. Recycling of ships - In December 2003, the Guidelines on Ship Recycling had been adopted by the IMO General Assembly.The guidelines give advice to all stakeholders involved in the life cycle of a ship, i.e. administrations, ag, port and recycling states, as well as shipbuilders, repairers and recycling yards. Amongst others, they introduce a Green Passport to accompany the ship through its lifetime and an inventory of potentially hazardous materials. The guidelines also address a number of issues with direct relevance for shipbuilders and repairers: - Ship designers and shipbuilders are encouraged to use preferably materials which can be safely recycled and to minimise the use of materials known to be potentially hazardous to health and the environment; - If possible, ship/equipment designers are encouraged to recommend designs to ship operators that minimise/prevent waste at the source/end of the operating life of the ship; - Substances prohibited or restricted by International Conventions should not be used in the construction, ret and repair of ships; - Ship designers and shipbuilders, without compromising safety or operational efciency, are encouraged to facilitate recycling and removal of hazardous materials. Although the guidelines were originally designed as a non-mandatory instrument, MEPC is now in

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Safety and environment

the process of identifying the elements for which a mandatory scheme may be regarded as best option for their implementation. The other important task is the development of a single list of potentially hazardous materials instead of the existing three annexes. As regards the identication of possible elements for mandatory application, a table of the initial elements was drafted at MEPC 52. This contains the prohibition/restriction/minimisation of the use of potentially hazardous materials in new ships (a similar proposal was made regarding existing ships). Upon intervention by CESA, supported by some Member States, that this could have negative effects to the technical evolution in shipbuilding, the word minimisation was added. This could also be the case regarding the meaning of potentially hazardous materials, for which no clear denition was yet provided. The provisions related to the Green Passport were also among the issues for whom a mandatory application would be considered appropriate. As a consequence, shipbuilders would be obliged to provide all new ships with a Green Passport. Regarding the development of a single list of potentially hazardous materials, only a layout for such a list has been prepared so far. Further work will be done by the Correspondence Group and during a three-day intersessional meeting to be held the week before MEPC 53. The Correspondence Group will be chaired by Norway, and Greece volunteered for the further work on the single list within this group. Since the issue of ship recycling is an important one for the shipbuilding industry, CESA will continue to participate actively in the future work of the Group. Air pollution from ships MARPOL Annex VI on Air Pollution from Ships has entered into force on 19 May 2005 after the ratication thresholds for entry into force have been met. Draft amendments to MARPOL Annex VI which were approved at previous sessions of the Committee, have been reviewed at MEPC 52 with a view to their adoption at MEPC 53. They relate to the designation of the North Sea area as a SOx Emission Control Area and the introduction of the Harmonised System of Survey and Certication into MARPOL Annex VI. Progress was made on the draft Guidelines on the CO2 Indexing Scheme. IMO Member States were urged to carry out trials using the scheme and to report to the next MEPC. MEPC agreed that a CO2 indexing scheme should be simple and easy to apply and take into consideration matters related to construction and operation of the ship, and market based incentives.

Safety and environment

Clean ships for clean seas

MARPOL Annex I and Annex II revision - The revised MARPOL Annex I Regulations for the Prevention of Pollution by Oil was adopted by MEPC 52 and is expected to enter into force on 1 January 2007. It incorporates the various amendments adopted since MARPOL entered into force in 1983, including the amended regulation 13G (regulation 20 in revised Annex I) and regulation 13H (new regulation 21) on the phasing-in of double hull requirements for oil tankers. It also separates, in different chapters, the construction and equipment provisions from the operational requirements and makes clear the distinctions between the requirements for new ships and those for existing ships. The revision intends to provide a more user-friendly, simplied Annex I.
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New requirements in the revised Annex I include new regulation 22 regarding Pump-Room Bottom Protection: on oil tankers of 5 000 tonnes deadweight and above constructed on or after 1 January 2007, the pump-room shall be provided with a double bottom; regulation 23 Accidental Oil Outow Performance - applicable to oil tankers delivered on or after 1 January 2010; construction requirements to provide adequate protection against oil pollution in the event of stranding or collision. MEPC also adopted a resolution giving explanatory notes on matters related to the accidental oil outow performance required under regulation 23. MEPC 52 also approved the revised Unied Interpretations to the revised MARPOL Annex I and a Circular on cross-reference lists between the old and new regulations of MARPOL Annex I to facilitate familiarisation with the new numbering system of the revised Annex I. The revised Annex II Regulations for the Control of Pollution by Noxious Liquid Substances in Bulk was also adopted and is expected to enter into force on 1 January 2007. The new Annex contains a new four-category pollution categorisation system for noxious liquid substances (X,Y, Z and Other Substances). The revised annex includes a number of other signicant changes, such as signicantly lower permitted discharge levels of certain products which have been incorporated into Annex II. Consequential amendments to the International Bulk Chemical Code (IBC Code) were also adopted at MEPC 52, reecting the changes to MARPOL Annex II. The amendments incorporate revisions to the categorisation of certain products relating to their properties as potential marine pollutants as well as revisions to ship type and carriage requirements following their evaluation by the Evaluation of Hazardous Substances Working Group. Ships constructed after 1986 carrying substances identied in chapter 17 of the IBC Code must follow the requirements for design, construction, equipment and operation of ships contained in the Code.

Maritime Safety and Security in IMO

Damage Stability - In 2004, IMO nalised a substantial revision of SOLAS Ch. II-1 aiming at harmonised damage stability requirements for all shiptypes except tankers. With the draft approved at the 79th session of the Maritime Safety Committee (MSC), the subdivision of passenger vessels, RoRo and cargo ships will be performed by means of a common probabilistic method, which has been successfully used for cargo ships since 1990. Although the European shipbuilders welcome a performance based approach to ship stability in principle, CESA - in close co-operation with shipyards - raised concern with regard to the current status of the draft proposal due for adoption in May 2005. In particular, the late decision to terminate maintaining an equivalent level of safety compared to the existing requirements for passenger ships raised criticism, since no compelling need for the requirement to meet a higher standard than that currently provided in SOLAS had been demonstrated in the preceding decade of this legislative project. The proposed Required subdivision index R, increasing signicantly with ship size and number of persons on board, will induce substantial design modications, which require the evaluation of the impact on other safety aspects dened by existing regulations in order to ensure consistency and compatibility with other SOLAS Chapters. In addition, the proposed amendments necessitate appropriate phase-in periods for the new regulations. The extreme high value of large cruise ships and long time range of such projects leave no room for experimental rule development that might lead to interim regulations requiring further modications after a short period of time.Therefore, the European shipbuilding industry needs IMO regulations that achieve the highest possible level of both maturity and continuity.

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Safety and environment

Some of the concerns have been successfully addressed in an intersessional meeting of the Working Group on Subdivision and Damage Stability in January 2005. However, some topics of consistency (Life saving appliances) still have to be considered in the drafting process at the upcoming MSC 80 session. In order to arrive at a user-friendly formulation and homogenous interpretation of the revised damage stability requirements, the European shipbuilders will have to closely follow and inuence the development and adoption of the Explanatory notes in time before the entry into force of the revised SOLAS Ch. II-1. Passenger Ship Safety - The proactive initiative for the development of new requirements concerning the safety of future large passenger ships nally returned to a normal SOLAS development. In considering a proposal offering three parameters for the purpose of characterising a large passenger ship in order to enable to facilitate the work on this agenda item, the majority concurred with the recommendation to develop requirements for all passenger ships regardless of size. Therefore, the Committee agreed to rename the work programme item Passenger Ship Safety and instructed subsidiary to develop relevant parameters, as necessary, for application purposes of any proposed requirements and recommendations, bearing in mind that a one size ts all approach should be avoided since each area of safety (i.e. re, machinery, stability, lifesaving, search and rescue, etc.) has different concerns. The revised approach is based on the premise that the regulatory framework should place more emphasis on the prevention of a casualty from occurring and that future passenger ships should be designed for improved survivability so that, in the event of a casualty, persons can stay safely on board as the ship proceeds to port.

Safety rst!

Bulk Carrier Safety - In response to an alarming number of bulk carrier losses, IMO has nalised a comprehensive set of measures comprising requirements addressing operational issues as well as structural and equipment related standards, focussing on the hull envelope, closing appliances and evacuation. The MSC adopted amendments to SOLAS Ch. XII (Additional safety measures for bulk carriers) incorporating a new Reg. 14 on restrictions from sailing with any hold empty and non-mandatory requirements for double-side skin construction as an optional alternative. The option of double-side skin construction applies to new bulk carriers of 150 m in length and over, carrying solid bulk cargoes having a density of 1 000 kg/m3 and above. An amendment to SOLAS Reg. 31 in Ch. III (Life-saving appliances and arrangements) makes the carriage of free-fall lifeboats on all bulk carriers mandatory. With regard to draft new requirements relating to double-side skin bulk carriers the Committee considered contradictory Formal Safety Assessments without reaching consensus.The Committees decision not to make double-side skins mandatory was taken by a simple majority of the ag states present and voting. This procedure clearly demonstrates that the number of ag states at IMO is, besides tonnage represented, a major factor for success, which should be taken into account when considering the EU approach to IMO. Safety of Navigation - In 2004, IMO continued to introduce carriage requirements for Voyage Data Recorder (VDR) for existing ships to assist in accident investigations. Under SOLAS Reg.V/20, passenger ships and ships other than passenger ships constructed on or after 1 July 2002 must carry VDR. The new Reg. 20 denes a simplied voyage data recorder (S-VDR) that does not store so

Safety and environment

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detailed data as a standard VDR, but should maintain information concerning the position, movement, physical status, command and control of a vessel over the period leading up to and following an incident. The phased-in carriage requirement for S-VDR will apply to existing cargo ships of 3 000 GT and upwards. Goal-based new ship construction standards (GBS) - IMO continues its approach to become involved with the structural standards to which new ships are built. The new work programme item gained momentum through a general plenary discussion and a subsequent working group (WG) at MSC 79. The Committee decided that goal-based new ship construction standards should be broad, overarching goals against which ship safety should be veried at design and construction stages and during ship operation. They are not intended to set prescriptive requirements or to give specic solutions. Consensus was reached on a ve-tier approach to the further development of the basic principles: Tier I (Goals), Tier II (Functional requirements) and Tier III (Verication of compliance criteria). It was agreed that Tiers IV (Technical procedures and guidelines, classication rules and industry standards) and V (Codes of practice and safety and quality systems for shipbuilding, ship operation, maintenance, etc.) would be developed by classication societies and industry organisations. Tier I goals and working descriptions address safety and environmental friendliness with respect to structural integrity and strength, dismantling and recycling, accessibility, inspection and proper maintenance. They include provisions regarding operating and environmental conditions and specied design life. The group also developed basic Tier II functional requirements, for the time being relating to bulk carriers and tankers only. The deliberations so far exposed a wide range of divergent views held by different administrations and observers. CESA supported a risk-based approach to goal-based standards and emphasised the importance of a holistic view of newbuilding and life cycle aspects including competencies required at shiprepair yards.With regard to the design accessibility for verication, CESA stressed the importance of the protection of the intellectual property rights of shipyards. The GBS initiative is another example of the IMO tending to go ashore, which means that the Organisation is more and more deviating from its traditional method of setting technical requirements for the design and operation of ships in international service.The development of GBS could soon incorporate minimum requirements concerning a harmonised international ship production standard addressing in detail the building methodologies within shipyards, as it is already under way with the work programme item Development of performance standards for protective coating. The results obtained from a class and shipowners initiative in the eld of protective coating clearly demonstrate that such an approach is only acceptable, when it draws from the competence of shipyards.

CESA supports goal-based standards emphasising a holistic view and IPR protection
6

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Safety and environment

Maritime Security - In the eld of this philosophy has already materialised in a new Code specically addressing security issues at port facilities including shipyards. In 2004, the MSC considered issues relating to the implementation of the maritime security measures which have entered into force on 1 July 2004. The MSC, recognising that the consistent, uniform and harmonised implementation of the control and compliance measures will contribute towards the enhancement of maritime security, adopted a resolution on Interim Guidance on Control and Compliance Measures to Enhance Maritime Security. CESA provided the Committee with the shipbuilding industries legal position concerning the application of the provisions of SOLAS Ch. XI-2 and the ISPS Code with regard to shipyards. CESA doubted in particular the applicability to newbuilding yards since a ship under construction is not a SOLAS ship on international voyage and since contractual agreements could not be applied by way of analogy in public international law. The Committee approved Guidelines for the Implementation of SOLAS Ch. XI-2 and the ISPS Code which provides guidance on security measures and procedures to be applied at the ship/port interface dealing with either a non-compliant ship or port facility. It contains also specic interpretations regarding ships interfacing with an FPSO or an FSU and concerning the implementation of the ISPS Code in relation to shipyards. Although MSC/Circ. 1111 acknowledges to some extent CESAs position and distinguishes in principle between newbuilding and shiprepair yards, IMO refers the designation of shipyards as port facilities to national administrations which should base their decisions on local circumstances. Therefore, CESA raised concerns as to the wide variety of views expressed by national delegations concerning the application of the ISPS Code to shipyard. In application, this lack of unanimity could lead to the inequitable implementation of the provisions world-wide, resulting in market distortions in shipbuilding, repair and conversion.

Technical Cooperation with the European Institutions

In view of the increasing role of the EC on safety matters, including in particular in the context of IMO activities, CESA aims to ensure that the interests of European yards are better taken into account. To full this purpose CESA is establishing itself as a constructive and competent partner to all the European Institutions. In April 2004, EMSA, while still in the process of establishing full operation, initiated a High Level Panel on Double Hull Tankers in order to stimulate an informed debate between the Industry1 and regulators2 and to identify pro-active measures that would lead to further improvements in tanker safety and protection of the marine environment. The Panel agreed to collect and analyse feedback from experience in the design, construction, operation, maintenance and survey of double hull tankers of all types and sizes and identify factors that may have an adverse impact on the structural integrity of the vessels. It met six times and concluded on eight targeted recommendations which are listed below. Large oil tankers cannot be considered as core business of most European shipyards. Nevertheless, selected European shipyards for repair as well as newbuilding hold outstanding expertise so that, by contributing to the discussion, CESA underlined its dedication to play a role as a constructive and competent partner for EMSA. It is expected that similar initiatives covering other areas and ship types might follow in due course.

Safety and environment

CESA 2004 - 2005

1 2

Represented by BIMCO, CESA, IACS, ICS, INTERTANKO, OCIMF. Represented by ofcials from EMSA, the European Commission (DG TREN) and IMO

26

Premium safety double hull tankers produced in Europe

The Panel identied the following areas of concern: corrosion in ballast tanks due to coating breakdown; corrosion on uncoated deckhead and tank top structures in cargo tanks; corrosion and fatigue in ballast and cargo tanks, cracks due to fatigue, variations in workmanship and construction standards during new building and during repairs, cargo seepage into ballast tanks (double hull spaces). To tackle with these issues, the Panel agreed to recommend respectively to improve the coatings performance by introducing mandatory requirements for coating performance standards within SOLAS 74 (Reg II-I/3-2); to introduce requirements for coatings on cargo tank deckhead and tank top structures within SOLAS 74 (Reg II-I/3); to establish a performance standard for cargo tank coatings by introducing mandatory requirements within SOLAS 74 (Reg II-I/3); to establish harmonised maintenance procedures by making hull maintenance mandatory for vessel owners (in line with the ISM and TSCF Maintenance manual); to develop an appropriate response to fatigue failures that includes fatigue analysis when appropriate and pro-active repairs or modications as may be necessary by modifying IMO Resolution A.744(18) and demanding IACS to develop guidance for eld surveyors; to establish hull construction standards and to harmonise the content, standards and procedures of the initial hull Classication survey; to harmonise the content and standards of initial statutory surveys by making IACS hull construction standards for new and existing vessels a mandatory minimum (and include TSCF recommendations for repairs), by requesting IACS to develop unied requirement for initial hull classication surveys and by considering modications to IMO Resolution A.948(23) to improve initial statutory surveys; to install a xed hydrocarbon gas detection system to allow constant monitoring of double hull tank atmospheres by amending SOLAS 74 Reg. II-I/5.7 to require provision of xed gas detection systems in new tankers along industry best practice.

CESA 2004 - 2005

27

Safety and environment

 Erika III package

In preparation of the so-called Erika III safety package, The European Commission (DG TREN) consulted the Maritime Industry3 on several issues in May 2004 and in February 2005. DG TRENs consultation procedure included questionnaires and a general forum for an open debate. The discussion topics of the rst consultation (May 2004) were: Flag State Compliance; Port State Control; amendment of the Directive on a Vessel Trafc Monitoring and Information System; Approach to Marine Casualty Investigations in the EU; Liability and Compensation, Maritime Labour Standards.The next discussion topics of the second consultation (February 2005) were : Passengers - Proposal for a Regulation on the liability of carriers of passengers by sea in the event of accidents; Freight Proposal for a Regulation on nancial guaranty for ships; Modication of the Trafc Monitoring Directive; Classication societies questionnaire for consultation; Modication of the Port State Control Directive (95/21/EC). In both consultations, CESA participated actively and provided appreciated contributions.

Central Commission for Navigation on the Rhine (CCNR)

In December 2003, CESA has been formally recognised by the Central Commission for Navigation on the Rhine (CCNR) as a non-governmental organisation in the CCNR.This enables CESA to participate in certain CCNR activities, including

Modern vessels ensure topcompetitiveness in inland navigation

Further development of technical rules for inland shipping; Participation in working groups, e.g. Ships of the future; Promotion of the environmentally-friendly character of inland shipping, in particular by stimulation of environment saving technical precautions. During 2004, the CESA-CCNR activities concentrated on the actual revision of Chapter 15 of the Rhine Vessel Inspection Regulations regarding rules for passenger vessels (both vessels for day trips and cabin vessels). In February and April 2004, CESA position papers were submitted in conjunction with the shipowners association European Barge Union, another CCNR recognised NGO. The CESA objections to the proposed new rules concentrate in particular on stability and freeboard requirements, as well as on the extremely long validity period of transitional provisions which would have a very negative inuence on the realisation of the envisaged safety improvements. The executive secretariat of the CESA-CCNR activities is performed by the Netherlands Shipbuilding Industry Association (VNSI).

Safety and environment

CESA 2004 - 2005

Represented by CESA; ECSA; EMPA; ESC; ESPO; ETA; ETF; IACS; ICS; INTERCARGO; INTERTANKO; P&I CLUBS; OCIMF

28

7.

Social Dialogue

The key factor to success is the people who carry out the business. European yards benet from the excellent skill levels and the dedication of their workforce. Securing continued access to a skilled workforce is of vital importance for the long-term competitiveness of the industry. Thus, CESA has committed itself to a policy of fostering Social Innovations. This is also one of the key areas that LeaderSHIP 2015 has identied. The evolution of shipyards towards a structure as system integrators, cooperating with numerous subcontractors has posted new challenges regarding skills and adaptability. Moreover, the industry has not sufciently communicated a positive and attractive image to the general public. During years of trustful, constructive and pragmatic cooperation between CESA and the European Metalworkers Federation (EMF), a European dimension in the industrial relations in the shipbuilding sector developed. Both employers and trade unions share a common view on the perspectives and challenges that European shipyards are facing. Aiming to further strengthen the dialogue and implement Leadership 2015 recommendations, CESA and EMF established in 2003 a formal European Shipbuilding Social Dialogue Committee under the auspice of the European Commission, the rst of its kind in the metal trades. At present, the following concrete steps have been taken by the Social Dialogue Committee in response to Leadership 2015 recommendations: Conduct a quantitative survey to improve the knowledge of the social, geographical and economic reality of the European shipbuilding sector; Organise a workshop to exchange best practices in the eld of qualication and training (to be held in October 2005); Plan a Europe-wide shipbuilding week to publicise the attractiveness of the shipbuilding sector and safeguard the right image of the industry thereby assisting in attracting the right people to the industry - skilled and young people all together (to be held in March 2006); Consider a tool box which could contain legal instruments and information about best practices across the European Union as a point of reference to deal with cyclical and structural change in the European shipbuilding sector. Social dialogue
CESA 2004 - 2005

European yards benet from the excellent skill levels and the dedication of their workforce

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8.

Global shipbuilding requirement & capacity

Global shipbuilding requirement and capacity

The global economy and international seaborne trade continued to grow in 2004 and at a very high level compared to former years. Measured in tonne-miles, preliminary gures from Fearnleys suggest that the growth in seaborne trade could be as high as 6.9%, after a 5.4% growth in 2003. In tonnes, the growth is estimated at 6.7%, whereas the growth in tonnes in 2003 was 7.0%. Both trade in oil and dry bulk increased in 2004 oil with 7.2% and dry bulk with 6.3%. Preliminary gures indicate that the dead-weight tonnage of the global seagoing merchant eet increased by 5.0% during 2004, or by less than the trade. The tonnage balance i.e. the balance between the transport capacity of the eet and the need for tonnage has thus improved.The development in world seaborne trade in past years is illustrated in the accompanying graph.

8
Global shipbuilding requirement & capacity

The CESA Working Group on Market and Forecast has observed the developments in the market and prepared a new forecast on the requirement for new merchant ships to be built.The new study covers the period from 2004 up to 2020. This forecast, as with earlier similar evaluations, aims at indicating a likely future development based on historical data and a number of assumptions as to the future development in factors of importance to the future need for new ships.The forecasts focus on the long-term trends, not on uctuations year-by-year. The table hereunder shows the key gures for the latest forecast.

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Key gures of the CESA shipbuilding forecast

Unit Fleet Economic growth Tonnage to be deleted
(seagoing ships of 100 gt or more)
mill. dwt. Unit GDP p.a. based on constant prices GDP in PPP p.a. mill. dwt. mill. dwt p.a. 1.1.2004 898.5 2004-10 3.0 3.6 198.3 30.5 318.3 217.5 156.2 49.0 33.5 24.0 1.7.2010 1027.4 2010-15 2.8 3.5 139.2 27.8 236.6 166.5 119.5 47.3 33.3 23.9 1.7.2015 1139.2 2015-20 2.7 3.4 121.9 24.4 207.4 155.0 114.0 41.5 31.0 22.8 1.7.2020 1242.2 2004-20 2.8 3.5 459.4 27.8 762.3 538.8 389.8 46.2 32.7 23.6

Tonnage to be completed
(seagoing ships of 100 gt or more)

mill. dwt mill. gt mill. cgt mill. dwt p.a. mill. gt p.a.

Source: CESA

mill. cgt p.a.

The global merchant eet today is relatively young compared to the recent past. The need for replacement of ships in the eet due to age will, therefore, contribute relatively less to the newbuilding requirement in the coming years compared to earlier periods. Continued growth in international seaborne trade is, however, expected to call for a relatively high level of newbuilding activity in the forecast period. In recent years, global shipbuilding has been characterised by a high level of new orders, a high and still increasing level of production and by continued growth in the shipbuilding capacity. The demand for new ships was historically high during both 2003 and 2004, and after the price level for new ships was at its lowest in many years in 2002, it has grown to the highest level ever at the beginning of 2005 (measured in US $ without taking the ination into account). In this relation, it should noted that also the cost of shipbuilding material has grown to a historical record level.

8
Global shipbuilding requirement & capacity
CESA 2004 - 2005

31

The current orderbook, however, indicates that the production of new ships could surpass the average annual level of tonnage needed to be built in the coming years according to the new forecast. Based on the evaluations of the CESA Working Group on Market and Forecast, it can be expected that the available shipbuilding capacity will increase substantially over the next years. For 2005, the global capacity is estimated at approximately 26.8 mill. cgt, reaching 28.9 mill. cgt in 2007 and, for 2010, a level of approximately 31.2 mill. cgt is expected. The current evaluation also takes into account the global orderbook of shipyards, many of which are fully booked until the end of 2007 or even well into 2008. Many yards currently operate at full capacity utilising every skill to boost production through increased efciency within existing physical limitations. Other yards, notably in Asia and especially in China, are in the process of expanding their capacity or have plans for new facilities to be established within the coming years.

8
Global shipbuilding requirement & capacity

It appears from the graph above that the future shipbuilding capacity will be much larger than the newbuilding activity, if shipbuilding activity and shipbuilding capacity expand in line with the ndings of the CESA Working Group on Market and Forecast. In fact, the capacity estimated for 2010 will enable a production which is 27% larger than the one of 2004 (gures for 2004 are preliminary). Existing forecasts on the requirement for new ships to be built all point to lower production volumes than the size of future capacity indicated. The evaluations of the CESA Working Group indicate that a market with substantial oversupply of shipbuilding capacity is likely to develop within a few years. Both in 2001 and 2002, the volume of new orders placed in the world declined after having reached a record high level in 2000. In 2003, however, the volume of new orders grew massively and reached a new record. The growth continued resulting in an even higher volume of new orders in 2004. These record levels of ordering are not seen as sustainable.

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9.

Shiprepair sector

Market situation
This section records the European picture related to the shiprepair business, built up over the course of the year from the national situation reports that form a central and valuable part of the exchange of information between participants at Standing Committee meetings. Reports on the situation in individual countries can be found as part of the reports from national associations.

In the early part of 2004, there was some concern among Shiprepair Group participants that some sectors of shipping were deferring dry docking because of the high freight rates currently on offer. This was especially noticeable for tanker owners.Thus, in a number of countries, the level of repair activity was lower than normal. However, this was tempered by the recognition that deferral of dry docking could not be indenite, so a signicant recovery in activity was expected later in the year. Volume of business in the offshore sector was also down signicantly, and this was affecting yards working in the rig and FPSO/FSU ret and conversion sector as well as those yards specialising in offshore support and supply vessels. By May 2004, some Group participants were reporting an improved market, but in other cases the low level of activity in the offshore oil and gas sector and the high freight rates on offer for some trades were continuing to have an adverse effect on yard turnover. However, the recognition remained that owners could not secure indenite postponement of the need to undertake classication special surveys. By the November 2004 meeting, some participants were reporting a signicant upturn in the volume of work as surveys could no longer be postponed. Overall, the view was that 2004 appeared to be ending up with turnover at the same level as, or slightly down on, 2003. It was noted that, in view of the high freight rates available in 2004, many owners were cutting down as far as possible on the work to be done by the yards in the interests of getting their ships out and trading once more. Again, the expectation remained that there would be a signicant recovery in turnover, but now deferred to 2005.

Top quality maintenance is the key to safe ship operation

CESA 2004 - 2005

33

Shiprepair sector

 Industry statistics
The table below gives turnover gures collected for the year 2004, and updates for the years back to 2000 to give the most comprehensive possible picture of the value of repair and conversion work in Europe. SHIPREPAIR AND CONVERSION TURNOVER (MILL EUR) 2004 CROATIA DENMARK FRANCE GERMANY GREECE HOLLAND ITALY NORWAY POLAND PORTUGAL ROMANIA SPAIN UK TOTALS 32 228 428 1917 245 420 1709.9 285 407 2186 367 1745 277.76 336 2096 186 230 22 85 86 620 95 552 57 245 186 69 139 137 110 116 120 129 83 88 591 59 275 220 82 674 99 275 85 637 76 254 218.4 2003 20 2002 14 2001 14 2000

Special topics
The LeaderShip 2015 exercise had high priority for the Group during 2004. In particular, the Group considered on a number of occasions the contribution the sector should make to improving the quality, safety and environmental friendliness of shipping in European waters. A central theme for the Group was to seek a denition of shiprepair standards that could be utilised as a clear contribution to the delivery of safer shipping. To this end, the Group closely follows the developments in the IMO towards the development of goal based performance standards. The IMO initiative is focused on newbuilds, but the underlying principles could have relevance to the repair and conversion sector. A small working group was invited to consider the issue in more depth and report back, which it did during 2004. Its report assisted the Groups deliberations. The shipyard view that has been reported to IMO is that standards based on best practice, not lowest common denominator, should be the aim.This topic was on the agenda for all three meetings of the Group in 2004 and will continue in 2005. The Group took a signicant interest in the development of the IMO ISPS Code during 2004. The CESA involvement at IMO discussion on this topic prompted delegates to give thought specically to the treatment of shiprepair yards, specically whether repair yards should be designated as port facilities in the context of the ISPS Code. The IMO conclusion was that, normally, repair yards should be so designated, but that it was the responsibility of national administrations to decide.

Shiprepair sector

CESA 2004 - 2005

34

This matter remains on the table for the Group in 2005, since it is becoming clear that there is alarming inconsistency of application in Europe, even within individual Member States. The Groups fundamental interest is that the application of the Code should not introduce competitive distortions. During the year, the Group was able to make an input to the deliberations of a High Level Panel in the European Maritime Safety Agency (EMSA) on double hull tankers. The practical experience of repair yards in identifying some of the problems that had emerged with both the structure and condition of double hull tankers was of considerable value to the High Level Panel.

Research and development

The Group was able to note with satisfaction the formal start in June 2004 of the 3 year SHIPMATES project, being run under EC Framework Programme 6. The Group was informed of developments in the project at each meeting and, through the Group, background information was sought from repair yards about state of the art technologies and areas where yards most feel the need for new and improved technologies. During 2004, two projects were submitted for funding approval. MARPAINT, which deals with the issues of blasting, painting and coating as they apply in repair and conversion yards, was approved at the second call of FP6, but there was insufcient funding to support it so it will have to be re-submitted. ADCCAM, which deals with the use of innovative measurement technologies in shipyards, was submitted under the provision for collective research, aimed in particular at small and medium enterprises (SME), but was not approved. However, the assessment of the proposal was sufciently encouraging to decide the Group to try to revise and resubmit the proposal in 2005. R&D is now a regular topic of discussion at Group meetings. It is helpful to reinforce the interest of the sector in improvement by the development and application of new technologies. It also helps to present the sector in a much more positive way, banishing the old image of shiprepair as a dirty, uninteresting and low-technology activity.

CESA 2004 - 2005

35

Shiprepair sector

10.

Naval sector

European naval shipyards make an essential contribution to European defence capability

The Common European Security and Defence Policy has seen considerable emphasis in recent years and naval forces form an important cornerstone in this context. Europe recognises the need for a strong and competitive defence industry as a dynamic part of its industrial landscape. The growing impact of Community initiatives on naval shipyards, including in particular LeaderSHIP 20154, and the importance of a coordinated industry approach, have led to the decision to establish a group within CESA specically dedicated to the naval business. European naval shipyards make an essential contribution to European defence capability. European naval yards are world leaders in a wide range of technologically advanced vessels, both surface and submarine. This is due in some measure to the strong cross-fertilisation between naval and highly sophisticated merchant shipbuilding. There have been in recent years examples of international cooperation. However, compared to other defence sectors, the European naval shipbuilding remains dominated by national interests. The European naval shipbuilding industry needs to work together closely to meet more effectively the requirements of the market within Europe and to maintain its current strong position in export markets. The new Naval Yards Group is a forum for fostering common industrial views on policies and practices which will support the enhancement of European naval defence capabilities and its industry base. In cooperation with the European Aerospace and Defence Association, which has set up a complementing Naval Industry Defence Group, CESA aims to stimulate political support for European naval requirements, in particular related research and development and joint programmes. Naval sector The following initial items for the work programme were identied: Review the general situation of the naval sector; Review and follow up on the LeaderSHIP 2015 recommendations regarding the European approach to naval defence; Track development of, and facilitate participation in, security related research programmes.

10

CESA 2004 - 2005

COM(2003) 717 nal of 21.11.2003

36

11.

CESA working groups and committees

COREDES
The activities of the standing working group for R&D, COREDES (Committee for Research and Development in European Shipbuilding), have in the past years largely contributed to the positive attention, which the European shipbuilding industry received from the European Commission, as well as to the sufcient allocation of R&D funds, in competition with other branches (aeronautics, road-/rail-transport etc.). The Thematic Networks and Workshops organised by COREDES have created a culture of networking and cooperation within the European shipbuilding research. A continuous task in this context is to get the companies (shipyards and suppliers) interested and directly involved in the projects. This is why CESA-COREDES has established a new annual event, the CESA Technical Directors Summit. The rst summit held in Hamburg in September 2004 brought nearly 70 technical 1st or 2nd level managers from the top European shipyards, suppliers and classication societies together and conveyed the message that cooperative R&D on an EU level is leading to added value. In the reporting period, the COREDES Business Plan was completely actualised, including streamlining of the working structures.

The secretary of COREDES, which is supporting the Chairman, is presently Detlef Lemke, IMAWIS/D. In the CESA HQ, Paraskos Sansoglou took over the assistant function dealing with COREDES affairs from Alessandro Lega, who entered a post graduate study. The COREDES plenary, consisting of up to three nominated representatives of each national associations, gathers typically a group of approximately 50 persons. Recent COREDES Plenary Meetings 18&19 December 2003 17&18 June 2004 2&3 December 2004 2&3 June 2005 Paris Gdynia Berlin St.-Nazaire (with EMECRID)

CESA 2004 - 2005

37

CESA working groups and committees

The three subgroups got new work programmes and the Advisory Committee was in its majority manned with industry representatives. After the Chairman (Michael vom Baur, Senior Vice-President, Aker Yards ASA) has been appointed by the CESA Board for two years in December 2003, the two Vice-Chairmen were due for election in December 2004 (Michael Goldan, VNSI, and Mariano Perez Sobrino, Director R&D IZAR, for two years).

11

In 2004, the European Marine Equipment Council (EMEC), which has closely cooperated with COREDES for many years, took the welcome decision to strengthen their R&D activities by forming a dedicated working group (EMECRID). The future close cooperation between both groups is seen to be essential for the critical mass of the industry and for innovative developments in European shipbuilding. Therefore, as far as possible all events and activities including the plenary meetings will be done jointly.

Working Group on Market Monitoring

The CESA Market Monitoring Group has the task to monitor developments in the global market for new ships. Furthermore, the group serves as an interface between the European Commission and the European shipbuilding industry. As a consequence, the group has had a number of meetings with representatives of the European Commission during the past year. The group assists in the market monitoring activity performed by the Commission and by external consultants engaged by the Commission in this respect. The group provides factual information and comments on reports and ndings of the Commission and its consultants. In 2004, the group had ve meetings and met ve times with the European Commission services.

Working Group on Market & Forecast

In the period 2004-2005, the CESA Working Group on Market and Forecast has nalised a forecast for new merchant ships to be built in the period 2005-2020. The forecast deals with the long term theoretical need for new seagoing merchant ships of 100 gt or more to be built. Requirement for new ships, as understood in the forecasts, should not be confused with the actual demand for new ships as this shows itself by the volume of new orders being placed. The methods used and the preliminary forecast results have been discussed at an international forecasters meeting in Brussels in September 2004 with the participation from Europe, Japan, South Korea, China and the United States. In connection with the preparation of former newbuilding forecasts, agreements were made with the Shipbuilding Association of Japan, SAJ, and the Korean Shipbuilding Association, KSA, on the harmonisation of a number of basic factors and methodologies in order to make it easier to compare and discuss forecasts and forecast methodologies. In connection with the initiation of work on the new forecast, efforts were made in order to increase the level of harmonisation and in this relation the corporation was extended to include also the Shipbuilding Economy Research Centre of China, CSERC. Some of the preliminary ndings of the new CESA forecast are presented in chapter 8. In order to discuss the nal ndings of the forecasts prepared by the forecasting groups, an international meeting was held in Busan, South Korea, in May 2005, attended by representatives of the four forecasting groups, i.e. South Korea, Japan, China and Europe.The OECD secretariat on shipbuilding attended on an observer basis. In autumn 2004, the CESA Working Group on Market and Forecast nalised a new evaluation on the global developments in shipbuilding capacity until 2010. This evaluation is based on individual evaluations by country of the shipbuilding capacity which may likely be offered to the market in 2005, 2007 and 2010.

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CESA working groups and committees

CESA 2004 - 2005

38

It is hoped that through a continued dialogue both directly between the forecasters of the associations, in the OECD and in other connections, an improved understanding can be reached as to the development and nature of the shipbuilding market thereby contributing to a more healthy and stable development of the global shipbuilding market. During 2004-2005, the CESA Working Group on Market and Forecast met as follows: 1 & 2 April 2004 CESA, Copenhagen 15 & 16 June 2004 CESA, Brussels 11 & 12 August 2004 CESA, Copenhagen 6 September 2004 CESA, Brussels 7 & 8 September 2004 - International meeting, Brussels 27 & 28 October, 2004 CESA, Copenhagen 7 & 8 March 2005 CESA, Copenhagen 17 & 18 May 2005- International meeting, Busan

Working Group on Trade

The main tasks of the Working Group on Trade Affairs are related to the WTO procedures and OECD negotiations related to shipbuilding.The group under the Chairmanship of Mathias Mnchau from VSM, closely cooperated with experts from an international law rm to gather the initial evidence and establish a case under the Trade Barrier Regulation. This exercise included extensive inquiries of the main European yards, which were coordinated by the WG. After the WTO had established its Panel in 2003, the procedure has been under full control of the responsible services in the European Commission. During this phase, the WG responded to inquiries from the EC as regards further detailed evidence. During the reporting period, the parties had basically fully established the factual basis of their respective cases so that no further input from the WG was required for some time. In two meetings held at the end of 2004 and the beginning of 2005, the preliminary panel reports and theire implications were reviewed in order to report to the CESA Board. The WG also closely followed the developments of the OECD negotiations. As these negotiations were initially agreed to be conducted among exclusive government delegations, CESA did not attend any SNG meetings during the reporting period. However, related to the SNG talks, regular preparatory and debrieng meetings were held with the European Commission in which the developments and the position of the industry were discussed. It was made clear in those meetings that an agreement without an effective mechanism on injurious pricing would not be acceptable for the industry. The group also met on an informal basis with anti-dumping experts of the Commission to discuss the possibility to initiate an anti-dumping procedure against unfair pricing practices by Far Eastern yards. It was agreed that CESA would give the thought further consideration, both from a legal and factual point of view.

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Working Group on Social Dialogue

Introduction
The European Shipbuilding Social Dialogue Committee was established between the European Metalworkers Federation (EMF) and CESA in 2003, under the ofcial umbrella of the European Commission. After the adoption of the Commission Communication on LeaderSHIP 2015, the European shipbuilding social dialogue committee has taken a focal role to respond to the recommendations related to a skilled workforce. The Social Dialogue Committee focuses on the general aspects of the European shipyards activities, their socio-economic challenges and, particularly, on the specic problems of the sector and aims to nd joint solutions. With the approval of the Board, the goals of the Social Dialogue Committee are set as follows: Develop the social aspects of LeaderSHIP 2015 and improve productivity; Better understand the socio-economic aspects of the shipbuilding sector at the European level and involve the Commission more in the solution-nding process; Monitor and work with the Commission and the social partners on the existing instruments, at the European level, which are able to cope with specic problems of the shipbuilding sector; Set up a new platform where the social partners could work closely with the Commission and obtain necessary nancial support from the Commission for certain activities; Better assist national associations in the time of socio-economic crisis and provide them with a platform where they could analyse problems and identify solutions from a more distant and comprehensive perspective.

Activities

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CESA working groups and committees

Aiming at implementing the European social dialogue work programme, the following four working groups were created: 1. The European Shipbuilding Survey With the support of the European Commission, the University of Bremen conducted a mapping exercise of the European shipbuilding sector (covering 25 European Countries). The purpose of this exercise is to improve the knowledge of the social, geographical and economic reality of the European shipbuilding sector.This survey is limited to a quantitative analysis.The result will be made available in the course of 2005. 2. Qualication and Training Working Group The qualication and training work group has submitted a budget application to the European Commission for organising a pan-European workshop in Trieste, Italy in October 2005. The workshop aims bringing together human resources practitioners in the shipbuilding and ship repair sector to exchange experience and reect on best practices in the eld of qualication and training.

CESA 2004 - 2005

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3. Image Working Group For the purpose of better spreading the message of LeaderSHIP 2015, improving the attractiveness of the shipbuilding sector and safeguarding the right image of the sector, the image work group has been put into operation. The rst action initiated by the image working group is a shipyard week in March 2006.The shipyard week will comprise of a central event addressing the European institutions in Brussels and various promotional activities targeted at students, politicians and the general public at national and regional level. 4. Tool Box Working Group The task of the tool box working group is to develop instruments to deal with cyclical and structural change in the European shipbuilding and ship repairing sector. The major aim of the project is to identify legal instruments and practices across the European Union in order to compile an inventory that can serve as a point of reference.

Interyard Group on Shiprepair

Introduction
Mr Manfred van der Wal of VNSI served his second consecutive year as Chairman of the Group. Mr Francisco Arderus of UN Barcelona served his second consecutive year as Vice-Chairman. Mr Nick Granger continued to serve as the Executive Secretary of the Group.

Group operation
The Group held three meetings during the year, all tied in with other events. The rst Standing Committee meeting was held in Brussels in March 2004. Following the meeting, participants attended a lobbying lunch organised by the Group in the European Parliament to make the European Parliaments Members and the Commission ofcials better aware of the interests and concerns of the shiprepair and conversion yards. The second Standing Committee meeting was held in Portugal in May 2004, along with the Annual General Meeting of the Group, as part of the wider CESA General Assembly. This structure has been adopted for some years to encourage the repair and conversion yards to develop stronger links with the newbuild interests in CESA. The third Standing Committee meeting was held in London in November 2004 to coincide with the Shiprepair and Conversion Exhibition and Conference. This link to one of the major international repair and conversion events allowed the Chairman and the Vice-Chairman to participate in conference sessions to increase visibility of the Shiprepair Group.

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CESA working groups and committees
CESA 2004 - 2005

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Naval Yard Group

Based on initial work done within the context of LeaderSHIP 2015, CESA offered to create a dedicated group to naval shipyards. This proposal met wide ranging interests and practically every naval yard in Europe has become involved in the discussions. Several meetings were held in 2004 aiming to agree on the terms of reference and the initial work items. The CESA Board formally approved the terms of reference in September 2004. In the following months the mode of operation regarding the co-existence and cooperation of and with the Naval Industry Defence Group within the Aerospace and Defence Association were claried. In May 2005 the CESA General Assembly conrmed Mr Corrado Antonini, President of Fincantieri, as the rst Chairman of the new group.

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CESA working groups and committees

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12.

Reports of the National Associations

The following reports are written by the National Associations. They represent the situation and views of the industry in the respective country.

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Reports of the National Associations
CESA 2004 - 2005

Note: This chapter reports the results recorded by the National Member Associations of CESA. Differences between CESA data and data from other sources, in particular Lloyds Register Fairplay (LRFP), result from different methodologies and denitions related to the data-collection (e.g. LRFPs point of determination is the hull-construction, for CESA it is the ship-delivery by the contracted yard. Consequently, countries with strong outtting activities on sub-contracted hulls record substantially higher values in the CESA statistics compared to LR-FP and vice versa). CESA considers LR-FP data well suited for international comparisons, whereas real economic performance is better reected by the CESA approach.

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Reports of the National Associations

44

CESA 2004 - 2005

Overview

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Reports of the National Associations
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Croatia
Introduction
Shipping and shipbuilding activities in Croatia have a very long tradition. Ever since ancient times, our part of the Adriatic Sea was known for its ships and eets. Most of our major shipyards were founded in mid nineteen and beginning of twentieth century as Austrian Naval Arsenals.They achieved impressive success in construction of warships, ranging from battleships and cruisers to submarines. In the course of years, the shipyards turned to the construction of merchant vessels. Croatian shipbuilding industry operates on the international market and export orientation is its dominant feature. Croatian shipbuilders have delivered impressive tonnage to foreign and domestic shipowners of over 70 countries worldwide since the nineteen-fties. Since the beginning of building ships, the open world market policy of the Croatian shipyards has helped us to survive hard times and to keep the high European level of quality and worldwide competitiveness. We attribute these achievements to highly skilled working forces and strong design teams, ready to meet every demand by shipowners and to produce high quality tailor made ships with innovative design and features, unique performance and extraordinary service characteristics. The Association of Croatian Shipbuilding Industry, JADRANBROD, exists for more than 45 years as a coordination body, linking shipyards and Croatian Marine Equipment Manufacturers in order to establish a stronger position by joint approach in negotiating with third parties. The Croatian shipbuilding Corporation, CSC, was established by the Government in 2004 in order to oversee the construction of the Newbuilding currently under construction and organise bridge nancing loans to cover the difference between down payments and full price of the ship paid by the buyers upon delivery. In 1997, CSC merged with Jadranbrod into Hrvatska Brodogradnja Jadranbrod d.d. (CSC) and is acting as Association of Croatian shipbuilders since.

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Reports of the National Associations

Shipbuilding:
The full name of Croatian national shipbuilding Association is: HRVATSKA BRODOGRADNJA JADRANBROD d.d., CROATIAN SHIPBUILDING CORPORATION in English, CSC in short. HRVATSKA BRODOGRADNJA - JADRANBROD d.d., CROATIAN SHIPBUILDING CORPORATION in English is established by the Croatian Government and presently acts as Association of six major Croatian Shipyards: ULJANIK SHIPYARD, dealing in newbuildings only 3. MAJ SHIPYARD, dealing in newbuildings only BRODOSPLIT SHIPYARD, dealing in newbuildings and special objects only BRODOTROGIR SHIPYARD, dealing in newbuildings and in repair KRALJEVICA SHIPYARD, dealing in newbuildings and repair SHIPYARD V. LENAC, dealing in repair, conversion and offshore, presently under bankruptcy

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The main tasks of HRVATSKA BRODOGRADNJA - JADRANBROD are to provide expert monitoring of the restructuring process and modernisation programme of the Croatian shipbuilding industry, to oversee the construction of the newbuildings currently being built in the Croatian shipyards and coordinate other activities of common interest. Other major activities of Hrvatska Brodogradnja - Jadranbrod are to coordinate the sales, promotion and marketing activities as well as coordinate nancing and purchase of strategic materials in close cooperation with the shipyards when needed. Attached is work force statistics for 2004. Kindly concentrate your attention on the column showing shipyards employment gures i.e. 9 529 men (no gures for Groups, since there are shown, besides shipyards, employees of different other companies associated in the Groups, not directly involved in shipbuilding activities). The President of Supervisory Board of CSC is Mr Vladimir Vraankovi, B.Sci (eng), State Secretary at the Ministry of Economy, Labour and Entrepreneurship.The Director of CSC is Ms Nada Braovi, B. Sci. (oecc.) Kindly note that for relations and correspondence with CESA, COREDES, OECD etc. the responsible person of CSC is Mr Mladen Corluka, N. A., Commercial and Marketing Director.

General situation
The general situation in the Croatian shipbuilding industry shows sold and committed capacities till the end of the year 2008 stretching even into 2009. The world market situation and a further upgrade movement in Newbuildings prices can give us moderate optimistic view of the future in the forthcoming period.

General information on Croatian economy

National Statistics: According to data from Statistic Bureau, Ministry of Finance, Chamber of Commerce, National Bank and other relevant Institutions, basic statistic economic data for 2004 are (*estimated): GDP GDP per capita Population (2001) Ination rate Unemployment rate Export Import Foreign exchange reserves 29.87* bn US$ 6 720 *US$ about 4.4 mill. 2.2 % 19.3 % 8 022 mill US$ 16 583 mill. US$ 8 759 mill. US$

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*estimation based on data for three quarters of 2004

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The Government priorities are: Maintain economic and nancial stability Stable exchange rate GDP growth 4 % min. Increase in production, productivity and exports Stimulate FDI friendly environment Reduce public spending, tax burden, unemployment Shipbuilding, machinery, metal processing and electrical equipment industries are making 52.7 % of exports, combined with chemical, oil processing, textile (clothing), wood products and foodstuffs industries make a total 94 % of Croatian exports, showing that the industrial sector is leading in Croatian economy. The depreciation of US$ against EURO (and domestic currency) and the rise of steel prices certainly are not the factor of benet for export, including shipbuilding and shiprepair industry. Growth of Croatian industry increased with 3.7 % in 2004 compared to 2003, and further increase is expected in 2005. Industrial sector contributes 19.8 % to Croatian GDP engaging 280 000 employees, what is about 26.1 % of total Croatian work force.

Denmark
General situation
The global economic upturn continued in 2004 with the highest growth in several years. At the beginning of 2005, it seems like the positive growth will continue though maybe at a gradually reducing level. For the Eurozone, the intensity of the growth will very much depend on the development for the private consumption.

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Reports of the National Associations

The Danish economy showed improvements in 2004. Economic growth increased from 0.4% in 2003 to 2.0% in 2004 due to a strong increase in private consumption and investment not least due to an optimistic attitude of the population as to the future development in personal wealth. This optimistic attitude and the growth of the Danish economy were stimulated by the taxstop introduced by the present government when it took ofce in November 2001. In spring 2004, the government introduced an economic package aimed at stimulating activity and reducing the level of unemployment. In addition, the taxation on personal income was (slightly) reduced in mid 2004. According to the OECD, the economic upturn in Denmark is expected to continue in 2005 and 2006. For 2005, OECD expects an increase of 2.7% and in 2006 a further increase of 2.6% is expected. The present Government had its mandate prolonged in a general election held on 8 February 2005. The result of the election suggests that the economical politic of the government will continue along the current lines. The Danish economy appears, at present, to be rather robust with a surplus on the public accounts and on the balance of foreign payments. The ination decreased in 2004 to 1.2% - the lowest level in several years - however an increase up to 1.7% is expected for 2005. However, this is still low compared to historical gures and despite the increases of oil prices and ination. The Danish salaries are among the highest in the world,

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which continue to put pressure on the Danish industry for cost saving and on the government to reduce taxes. The high wages and the high taxes in Denmark do result in an increasing outsourcing of production to other countries. The development of the Danish economy is to be seen in relation to international developments. The Eurozone thus experienced an increase in economic growth from 0.6% in 2003 to 1.8% in 2004. The GDP-growth of the United States in 2004 recovered to 4.4% from 3.0% in 2003, and is forecasted to decrease to 3.3% in 2005. The size of the workforce in Denmark has slightly increased from 2003 to 2004, but so has the rate of unemployment which increased from 5.6% in 2003 to 5.8% in 2004; the highest level in Denmark for several years. In its evaluations, the OECD predicts that the rate of unemployment will decline slightly during 2005. Interest rates in Denmark reached historical low levels towards the end of 2003 and this continued in 2004. The OECD also expects interest levels to remain low in 2005.

Shipbuilding
In its general assembly in 2003, the Association of Danish Shipbuilders amended its rules and changed its name into Danish Maritime. In addition to shipyards, the new association also includes producers of maritime equipment and shipbuilding material and suppliers of maritime services as members. Members of Danish Maritime, in 2004, completed 8 merchant ships totalling 293 000 gt or 202 000 cgt, where in 2003 the yards completed 11 merchant ships totalling 383 000 gt or 273 000 cgt. Furthermore, three naval vessels were completed. Direct employment in the shipyards stood at some 3 100 persons at the end of 2004 of which 2 800 in newbuilding. For comparison, the similar gures for 2003 were 2 900 persons of which 2 400 in newbuilding. In addition to the persons directly engaged by the yards, an additional number of approximately 500+ persons worked in the yards as subcontract labour in newbuilding. Subsidies and other trade distortions still obstruct international competition within shipbuilding. In the past, unsuccessful attempts have been made to stop such distortions through international agreements. Such an agreement, however, is still seen to be a necessary element in a solution leading to a free and open market without trade distortions. It is, however, also important to ensure that an agreement is effective and respected by all participating parties.

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Shiprepair
In Denmark, two repair yards offer dock capacity for ships with a length of more than 200 m and a number of yards offer dock capacity for smaller vessels. The past year has been relatively busy especially in the rst half year, but prices have remained depressed. Competition has been intense both internationally and between the yards nationally.

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Finland
General situation
The depression of the early 1990s hit Finland harder than the OECD countries on average. Since the depression years, the Finnish GPD has grown rapidly. Price trends have been slower than the OECD average. However, the unemployment rate is still higher than in most other OECD counties. For the Finnish technology industries, 2004 was a year of increasing turnover after two years of diminishing sales. In spite of this, there are major differences of output volume and sales price trends between individual sub-sectors and companies. In certain parts of the technology industries, the turnover trend was weakened by falling sales prices, in others by rapidly rising metal prices.

Shipbuilding
There were no major changes in the actual shipbuilding activities in 2004. At the end of the year, the order books of the shipyards contained six large vessels, a total of 472 000 cgt. In the same period, there were deliveries of four vessels of 266 500 cgt. Three new orders were contracted in 2004. During the rst months of 2005, some good new contracts were signed. To strengthen the structure of the newbuilding activities in Finland, the three big shipyards in Helsinki, Turku and Rauma were merged into one company at the beginning of 2005. The name of the new company is Aker Finnyards. At the end of year 2004, the total workforce consisted of about 4 800 people, including offshore and shiprepair.

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For the purpose of enhancing cooperation between the shipyards, marine equipment suppliers, subcontractor and design ofces, a new branch organisation, The Association of Finnish Marine Industries, was established at the end of 2001. This internal networking has given good results especially in R & D activities and in the partnership development with the sub-contractors.

Workforce in CESA countries

In 2004, the Finnish shipyards had a workforce of 4800, of which 4 000 in newbuilding.

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France

General situation
The French economy experienced a positive growth of 2,2% compared to the 0,1% in 2003. However, the unemployment rate remained unchanged with 10%. The current government has lowered income taxes and introduced measures to boost employment.

Shipbuilding
000 cgt Orderbook end of year Deliveries 1998 716.5 233.5 1999 1229.5 248.1 2000 1275.4 342.6 2001 925.6 459.9 2002 686.3 353.2 2003 293.5 511.2 2004 511.7 105.6

Alstom marine division (which includes the main merchant builder Chantiers de lAtlantique as well as Alstom Leroux Naval in Lorient) had the following workload on 1 March 2005: 2 cruise ships of 2 550 passengers each 3 LNG carriers 1 car ferry for cross-Channel 1 oceanographic research vessel 1 yacht

Chantiers has launched a plan to improve productivity which implies among others to adapt the workforce down to 3 000. It employed at about 3 500 people on 31 December 2004. The small shipyards Piriou, CMN and Socarenam had an intensive activity. Piriou, in Concarneau, had 14 ships in its orderbook on 1 March 2005; mainly trawlers but also tuna seiners, supply ships and miscellaneous. In order to cope with cabotage law in Nigeria, Piriou has established a new shipyard in this country,West Atlantic Shipyard, which holds a rst contract for 4 crewboats. CMN, in Cherbourg, had on 1 March 2005 an orderbook of 4 missiles launcher corvettes for Abu Dhabi, one 58m long yacht and a few fast boats. Socarenam, in Boulogne/mer, had 14 ships in its orderbook on 1 March 2005, trawlers, support vessels and inland water vessels.

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After DCN, the French expert in naval systems, became a stand-alone company in 2003, it joined the French association CSCN in 2004. On a turnover of 2.3 billion in 2004, DCN generated a net prot of more than 200 million . Its order book stood at 3.9 billion at the end of 2004. As part of a broad-based effort to make the company more competitive, the company spent 59 million on R&D, compared to 37.7 million in 2003, and plans to spend 75 million in 2005. DCN features two branches: DCN Warships & Systems DCN Services & Equipment Workload
Present programmes French Navy Horizon Frigates 2 strategic submarines 2 LPD Submarines Agosta Pakistan Scorpene Chile Scorpene Malaysia Frigates Sawari II Saudi Arabia Delta Singapore Pilot systems SKJOLD Norway Future programmes French Navy Anti aircraft frigates FREMM (in partnership with Italy) Nuclear attack submarines BARRACUDA Second aircraft carrier Future heavy torpedo Bulk repair contracts Repairs of strategic submarine Tmraire

Export

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Repairs of aircraft carrier CDG Export Submarine SCORPENE India

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 Shiprepair
In 2004, the situation in the ship repair eld has seen very few changes compared to 2003. SOBRENA, in Brest, remains the leading French Repair Yard with a work force of 250 and a turnover in excess of 40 million . SOBRENA docks approximately 40 vessels every year and is very active in the sector of highly sophisticated and/or costly vessels (North Sea shuttle tankers, LNG vessels, car-ferries). ARNO Dunkerque had once more a busy year with a turnover of approximately 25 million . ARNOs activity includes mainly bulk carriers, dredgers, car-ferries, etc. CMR, in Marseille, remains active although confronted with tough competition from Italy and Eastern Mediterrean countries. Turnover is about 17 million . SORENIs future got suddenly dark when news of the intention of the European Commission was heard of during the last quarter of 2004. Turnover has been around 4 million . SORENI went into receivership early January 2005 after they were notied to refund the 3 million aid given to enable the company to set up in 2001 and time was given until July 2005 to reorganise its activities. R2N activities were given a full stop in the course of the rst half of 2004. A new yard named SaintNazaire Marine has been created with a permanent workforce of 42.

Germany
General Situation
Compared to the sluggish development in 2003 the recovery of the German economy in 2004 improved but remained below higher expectations and in total on an unsatisfying level. The GDP growth rate improved to 1.7 % (2003: - 0.1 %) and was - despite the strong appreciation of the Euro especially against the US-$ - mainly generated by a high export growth rate of 8.2 %. Contrary to that, private consumer spending and investments were too low again although ination and interest rate were kept down. Economic and social politics were again focussed on the ght against the high unemployment rate which increased to 9.8 % (2003: 9.6 %). Key problem was and is the restructuring of social services systems and tax regulations. The burdens of social insurance contributions and taxes have to be reduced in order to improve the competitiveness of German companies. The second strategy of the government to stimulate the economic development is the improvement of the framework for research and development as well as for education and training in schools, universities and companies.

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 Shipbuilding
In 2004 German shipyards approximately maintained the same level of production as in 2003. Completions of 61 ships amounted to 1.0 mGT and 0.9 mCGT worth about 2.3 bn . However, some shipyards were able to compensate lower production by a better employment situation in naval shipbuilding. Year 2002 Production 2003 2004 2002 New Orders 2003 2004 2002 Orderbook 2003 2004 No. 68 62 61 50 102 86 119 144 147 1,000 GT 1,283 998 977 813 1,882 1,666 1,935 2,570 3,022 1,000 CGT 1,229 946 907 742 1,602 1,540 1,912 2,323 2,774 mill. Euro 3,416 2,780 2,306 1,681 3,572 4,054 5,511 5,867 7,034

The dominance of container ships increased to 62 % of all deliveries measured in CGT. Passenger ships and ferries ranked second with about 23 %. Other deliveries included ro-ro vessels (5 %), double hull tankers (4 %), general cargo ships (1 %) and a set of specialised sophisticated vessels (4 %). Due to available early delivery slots at German newbuilding yards and the stable worldwide demand the positive order development already reported for 2003 continued in 2004. After a low 3rd quarterly result the order intake revitalized to the end of the year and boosted the number of new orders for the total year to 86 ships with 1.7 mGT, 1.5 mCGT and a value of 4.1 bn .The shares of containerships and ferries/passenger vessels were the same as on deliveries whereas ro-ro freighters made up a higher share of 11 %. About 72 % of the total order volume accounted for export.

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As new orders by far exceeded deliveries the orderbook improved again to 147 ships with 3.0 mGT resp. 2.8 mCGT and a value of 7 bn . This secures employment for more than two annual productions. Due to some restructuring measures for productivity improvements and capacity reductions the number of employees (preliminary estimations) decreased from 22,000 in 2003 to about 20,600. The number of employees in merchant ship newbuilding was reduced from 14,200 to 13,000. Including all other activities like naval shipbuilding, repairs and conversions as well as the construction of boats and yachts and inland waterway vessels the total turnover of German yards increased from 4.3 bn in 2003 to 4.5 bn . Export and domestic business levelled out with 50 % each.

Shiprepair
The gures for shiprepair and conversion works carried out by German yards in 2004 have shown an upward trend.The total turnover for 2004 amounted to 620 Mio and exceeded the gures for 2003 (552 Mio ) by about 12 %.

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Generally, the yards reported about an unstable employment in the beginning of 2004, with a signicant improvement towards the middle of the year. Enquiries regarding standard repairs for commercial ships suffered from the high charter rates in this sector. Yards therefore concentrate on other market segments, like yachts and naval ships. Prices for repairs in the naval sector (not included in the a. m. gures), however, are not regarded as satisfactory. Many repair yards are also occupied with newbuilding projects and are therefore able to bridge gaps in repair activities. Furthermore the development of exchange rates had a negative impact on the competitiveness of the German yards. The revaluation of the EURO favoured yards in Eastern Europe and Far Eastern countries like Singapore.

Greece
General situation
Unfair competition exercised by shipyards in Eastern Europe, particularly the Black Sea and Turkey, continued inuencing both activities of the Greek shipbuilding and shiprepairing industry; not to mention the competition of Far Eastern, especially in China. Hellenic Shipyards S.A. is owned by Thyssen Krupp Marine Systems since January 2005.

Newbuildings
Despite the big demand for new vessels due to the extremely high market gures during the period under review, no new orders have been placed this year. Although a big number of new orders have been placed by Greek interest companies, the same were routed to the Far East and Black Sea countries, due to the considerably low labour cost. The high rate of Euro/USD deteriorated even more the already bad situation making the competition of Greek shipyards against the Far Eastern shipyards impossible. The merchant shipbuilding sector remained inactive, with the exception of the building of one passenger vessel 2 990 cgt value 49 m. with NEORION on behalf of foreign account. Hellenic and Elefsis continued with Navy building. Reports of the National Associations
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Shiprepairing
The general situation of our three member yards is formed up in line with the existing continuous crisis of the shiprepairing sector in Europe. Despite getting off to a busy start in the rst quarter, the number of enquiries dropped dramatically from June onwards and it remained at unusually low levels for the rest of the year.

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The very high market level during the period under review has negatively affected the repairs turn over. The strong competition from the countries with low labour cost, such as Black Sea countries Far East and especially China, in conjunction with the blooming of the commerce of China-India (big amount of cargoes for import/export) has caused routing of big budget repairs to low labour countries of Far East (China, Indochina,Vietnam etc.). Even in those cases where the ships had to be drydocked in our area, the feeling was that regardless of their extremely high earnings the owners remained unwilling to pay Greek rates for repairs trying in most cases to place the vessel in Black Sea or Turkish facilities taking advantage of the considerably cheaper prices there. The fact that several of those yards continued to quote in USD instead of Euro contributed, with the weakening of the dollar, in maintaining the difference in the cost between these yards and Greece to such high levels that it was almost impossible for us to compete. With 75% drydock occupancy, our member yards experienced, in 2004, one of the lowest drydock utilisation rates ever. The total turnover for 2004, compared to the previous year, dropped drastically.

Italy
General situation
In 2004, the economical and geo-political indicators showed a persisting situation of instability. Nevertheless, shipbuilding reported an extraordinary boom of demand, at world level, due to increased maritime trafc following the recovery of the United States economy and the extraordinary growth of China. As to the Italian shipbuilding, it shows a contrasting situation: on one hand, Fincantieri (world leader in the eld of large dimension cruise ships and ferries) and a few other important realities that succeeded in nding a correct positioning in the market; on the other hand, some medium-small yards, unable to take the necessary action at the right time, faced a progressive decline. Shipbuilding Production (of which for foreign account) New orders (of which for foreign account) Orderbook (of which for foreign account) No. 27 7 32 10 41 16 GT 529 749 304 776 1 107 393 749 876 1 633 744 1 193 252 CGT 633 603 382 870 1 284 886 863 670 1 901 981 1 390 390 Euro Mill. 2 212 1 423 3 974 2 724 6 122 4 601

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(approx. value)

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 Shiprepairing
Shiprepair has had an up and down trend in the year 2004 with yards having frequent periods of reduced activity or lack of work. Increased value of freights induced shipowners to reduce repair works to the minimum. The request of quotations and order acquisitions remained at the same level of 2003. Turnover of Italian yards amounted to 280 mill. Euro, including minor conversion works. Competing with prices quoted by East Mediterranean and Black Sea yards has remained impossible and, moreover, the unfavourable Dollar/Euro exchange rate did not help. For the year 2005, the request for quotations is expected to improve.

Netherlands
General situation
Dutch shipyards are excelling across a range of segments. The large yachts, commercial vessels, dredging vessels, inland craft and short sea ships segments are showing particularly superb performance. The shipbuilding industry in The Netherlands has come to specialise in a section of the maritime transport market characterised by stable growth and which, it now appears, is set to continue to realise this growth potential in the years ahead. This brings benets to the Dutch economy as a whole; total turnover from the shipbuilding industry amounts to some 2 000 million. In 2004, exports amounted to 1 200 million. The added value amounts to approximately 500 million. A remarkable feature is that an annual pay back of 350 million is made to the government. In addition, shipbuilding provides direct employment to some 9 500 people. The Dutch shipbuilding industry has for many years occupied a secure fourth place within Europe. Its global market share of 2% has been retained. A number of factors have made a particular contribution to the sectors current position: Innovation in the design and building process. Recent research has revealed that the Dutch shipbuilding industry is spending 180 million per year on innovation. For Dutch shipyards, the rest of the world represents a major sales market 60% of turnover from newbuilding is exported. The Netherlands has a complete maritime infrastructure. The government takes care of (although not excessively) a Level Playing Field for the shipyards. Within the framework of this Level Playing Field, VNSI has always argued for a structured policy for the industry. In the present global market, shipyards cannot survive with a government policy based on (often hardfought) one-off arrangements. In 2004, politicians and the government generally recognised that the shipbuilding industry is innovative and corresponds to a scenario for the future of the Netherlands with a high-quality industrial sector.

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The same year also brought a declaration of intent the Industry Memorandum describing an industry policy that explicitly recognises the necessity of a Level Playing Field for the shipbuilding sector. In effect, 70 million had been set aside for 2004: 50 million for the TROS scheme [Dutch: TROS-regeling, Temporary Rule for Order Support for the Newbuilding of Seagoing Vessels] for product tankers, chemical tankers, container ships and LNG vessels and 20 million for a guarantee fund for the advance nance of vessels. This line must be continued. In 2005, the Netherlands must pin its colours to the mast in relation to a new shipbuilding innovation policy.A number of countries within the European Union have already submitted applications for innovation subsidies in Brussels.

Newbuilding of seagoing vessels

Booming freight charges within virtually all markets mean that global demand for new tonnage is great. Whereas order intake in 2003 was 435 000 CGT, in 2004 this was 540 000 CGT. This boom is not expected to level off at all until 2008 or 2009. Thanks to 50 million extra budget from the TROS scheme, Dutch shipyards are able to act as players within Europe. Order intake amounted to 1.2 billion.

Navy shipbuilding
Navy shipbuilding, as part of seagoing vessels building, produced turnover estimated at 175 million. A worrying development is the fact that, to date, industry policy has shown little in the way of interdepartmental character and has therefore been largely restricted to the Ministry of Economic Affairs. This is not the case in the other European industrial countries. Political will and action is needed for a sustainable industry policy.

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Repair of seagoing vessels

In 2004, turnover from seagoing vessels repair amounted to 230 million. The dredger and offshore markets were poor and, owing to the expanding freight market, shipowners were highly unwilling to perform repairs. This often led to very small projects. The situation has improved since the fourth quarter, however.

Small shipbuilding
Orders received within this segment have increased slightly to 317 million. Turnover from repairs was 230 million.

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 Large yacht building

The order portfolio has shown a slight increase compared to last year, to some 300 million. Competition in this sector has however also increased. Demand is stable, but the number of players has increased in recent years. Shipyards that previously concentrated exclusively on the commercial market have now also entered the yacht market.

Maritime suppliers and service-providers

This category (including afliated members of VNSI) is showing steady growth. Turnover in this sector amounts to approximately 4 billion.

Norway
Norway has about 30 shipyards with main activities linked to construction of vessels. In comparison with most of the European shipyards, many of the Norwegian shipyards are relatively small in size. In the Norwegian shipyards order book and delivered vessels, there are mainly advanced offshore vessels, research vessels, trawlers and stainless steel tankers. Norwegian yards do also build high speed catamaran passenger/ferries. Throughout history, it has been the close cooperation between the owners, technical consultants, equipment suppliers and the shipyards, which has resulted in the development of the advanced vessels from Norway. The design of many ships has been exported to shipyards in other countries. The year 2004 has been a very difcult year for the Norwegian shipyards. The balloon of incoming orders after the fading out of the 9 % ships support had to be delivered before end of 2003. In the year 2003, Norwegian shipyards delivered approximately 94 ships; 41 for foreign owners. In 2004, they delivered approximately 41 ships; 16 for foreign owners. Following the dramatic years of very few new contracts, the market for Norwegian shipyards altered in August 2004.The new ofcial orders of 2004 amounted to approximately 10.8 billion NOK, compared to the year 2003 with new ofcial orders of approximately 2.9 billion NOK. It is mainly the boosting offshore market which is the reason for the better order book. We are also pleased to see the new orders of chemical tankers in one of our larger yards. Almost all Norwegian yards are importing hulls from low cost countries. Some yards have bought yards abroad supplying the steelwork. The number of employees in Norwegian yards has dramatically been lowered the last years.This also means that the active yard is better prepared in the years to come. The main activity of Norwegian yards is to design vessels according to their long maritime tradition. The result of this activity and the cooperation mentioned above is many exiting vessels as illustrated here.

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Poland
General situation
In 2004, the Polish economy recorded a signicant GDP growth by 5.3%. Besides a rm trend of export increase, internal consumption rose exceptionally before the date of joining the EU (1 May 2004) due to the fear of rising prices and VAT. This factor disappeared and it is supposed that GDP growth in 2005 will be at the level of 4%. The degree of investments increase has still been unsatisfactory. Despite the considerable GDP growth, unemployment - the biggest concern of Polish economy - remained at the very high level of 20%. This is the result of structural changes, increased productivity, deciency of new investments and high inow of young people newly entering the employment market. Ination, kept in last years at the low level (0.8% in 2003), jumped to 4.5% for the above mentioned reasons, but at the end of the year started to lower and it is expected to drop to 2.5% in 2005. The monetary situation was externally unfavorable for Polish shipbuilding. With a globally weakening US Dollar, the high interest rates of the National Central Bank (NBP) had driven exchange rates of Polish Zloty (PLN) against USD sharply down. The mean rate for 2004 was 3 6540 PLN/USD, 11% below 2002 level, with temporary drop even below 3 PLN/USD.

Shipbuilding
Apart from consequences of the crisis of 2002-2003 in Szczecin and Gdynia Yards, Polish shipbuilding has been, in 2004, seriously affected by the results of global trends in maritime economy and, additionally, by some effects of accession to the European Union. The inuence of those factors has had both a positive and a negative impact on shipbuilding activities in 2004.

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The booming shipowners ordering activity gave the Polish yards new orders for 51 ships totaling of 1 088 744 CGT, of which mainly container ships (34 units). Prices of newly ordered ships, to be sold in the next two to three years, are much better. At the end of 2004, the total backlog of all shipyards consisted of 95 ships of 2 112 617 CGT and the contract value of 3.620 million USD the highest gures in the last decade. However, in 2004, shipyards had to build and sell ships ordered two to three years ago, when prices were extremely low, with the US Dollar basic contracting currency much weaker against the Euro and the Polish Zloty when comparing with 2001-2002, and to buy steel and all steel-based marine equipment at much higher prices. With the accession to the European Union, Polish shipbuilding has been exposed to the EU rules of public support. This means political acceptance to the application of TDM for the period 2005-2007 on one side, but also aggravate conditions of granting guarantees for construction loans and refund guarantees of the advanced payment for shipyards on the other side. The migration of Polish shipbuilding specialists, i.e. workers and engineers, to the marine industry enterprises in Western Europe and Norway has increased.

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The situation of Szczecin and Gdynia Yards had stabilised during 2004. New Szczecin Shipyard (SSN), backed by state-owned Industry Development Agency (ARP), nally bought the shipbuilding facilities of bankrupt Szczecin Shipyard. SSN operates as fully state-controlled enterprise. In the Gdynia Shipyard Group GSG (Gdynia and Gdask Yards), the restructuring programmes, approved by shareholders and controlled by ARP, are under way. The State Treasury has got the majority in the increased joint stock capital of Gdynia Shipyard, thus the control over the Group. The efforts of GSG are concentrated on debt restructuring. SSN and GSG operate right now with advanced payments refund guarantees issued by the Export Credit Insurance Corporation (KUKE) and operational loans guaranteed by State Treasury. This model is to be changed in the future. The Group of Remontowa Yard (Gdask Shiprepair Yard Remontowa and Northern Shipyard) plays an increasing role in the Polish shipbuilding. They are specialised in non-standard vessels and various niche units. Remontowa, leader of the Group, successfully privatised in 2001, is constantly run in a protable way, has got a good credibility and gets commercial operational and investment credits without difculty. Totally, in 2004, the Polish yards delivered 25 ships of 448 684 CGT and the value of 754.7 million USD; these gures are much better than the 2003 results, but are still below the main level of previous years. Despite the nancial difculties of shipbuilding yards, the high technical level of Polish designed and built ships has been maintained. On the RINA list of Signicant Ships of the year 2004, two Polish built units are mentioned: arctic container ship Mary Arctica of Remontowa and multipurpose carrier 23 700 DWT Suomigracht of SSN. At the end of 2004, the total workforce of building yards accounted 15 500 employees; 700 more than in 2003, mainly because of the development of SSN.

Shiprepair
The repair and conversions business showed, in 2004, a substantial increase of turnover and improvement of protability. The turnover on repairs rose by 25% and by 54% on conversions (in US Dollar terms, compared to 2003). As the number of repairs decreased, their unit value rose by more than 50%. Dock average occupancy increased as well. Amongst the conversions, the Gdask Shiprepair Yard Remontowa made remarkable achievement by winning the contract for reconstruction of the Norwegian exible fall pipe vessel Rocknes. Both in Polish ship repair and conversions, the position of Remontowa is predominant. This yard accounted for over 65% of this sector turnover, had the highest increase of activity and made good prot. Three remaining major Polish repair yards, i.e. Nauta, Grya and Morska, noted improvement in income and prot, when comparing with 2003. The process of their privatising is still not nalised. The repair work in 2004 was executed by the same number of employees as in 2003, while conversions required the increase by 200 workers. The total employment of ship repair yards accounted to 4 100 slightly below the 2003 level.

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Portugal
General situation
Shipbuilding is currently enjoying its best year since 1997, in terms of newbuildings booked and the prices being charged. In 2004, about 42.7 mcgt were ordered, representing an increase of 7% relatively to the previous year. By the end of 2004, CESA presented a world order book of 4 694 vessels totalling 210 mdwt around 26% of the existing eet by deadweight, with some yards taking orders for 2008 and even 2009. While the Far East was heading up, EU yards continued their sliding down with the exception of new orders, but in very specialised segments. EU shipbuilding beneted from the prorogation of the defence mechanism until March 2005 and from the implementation of new measures identied in the project Leadership 2015, mainly in what concerns a new aid scheme for innovation and the preparation of a new technological platform for R&D to integrate the next 7th Framework Programme. However, the strong appreciation, of about 40%, of the Euro against the Dollar, in the last years has been responsible for a part of an EU market loss, though with a slight recover observed last year. Meanwhile, shipbuilding is under the threat of a very possible cyclical downturn once the present surge of orders lasts, and the IMOs decision on accepting goal-based standards for ship construction, which will not allow the use of easier scantlings and design variations to make cheaper prices. The shiprepair industry is facing new opportunities and challenges coming from the latest boom of freight rates, the strong appreciation of the Euro against the Dollar and the opening of new markets such as the coming wave of LNG trading on the Atlantic basin and tightening legislation. Competition is strong, new facilities are opening and prices are under pressure.

12
Reports of the National Associations

Shipbuilding
The Portuguese yards which compete at world level, as it is the case of Vianayard, the largest Portuguese shipbuilder, had a good year in what respects a large number of inquires received. New orders were received for two Passenger and Hotel vessels for river and coastal navigation, two ocean patrol anti-pollution vessels for the Portuguese Navy, and more recently six container vessels for a German Owner and an additional container vessel for a Portuguese owner, increasing the order book to about 200 million euros in merchant vessels. In spite of strong demand, the prices remained at a low level, due to the strong competition coming from Far-Eastern shipyards, though higher than in the past two years. The small size shipyards, very much dependent of the shing market, increased their activity in 2004, due to the acceleration of eet replacement, which will see the cessation of public support by the end of 2004. These yards are still working on the high number of orders placed in 2004, but the future remains very black. The New Common Policy for Fisheries no longer supports the construction of new shing vessels due to the existing excess of capacity relatively to the existing shing stocks.

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62

 Shiprepair
The demand for Shiprepair increased around 7% in 2004. This was due to the increase in the dry bulk market and other type of vessels with exception of the tanker market, which reduced about 4% relatively to the previous year. The high freight rates level on Lisnave traditional market segments - wet and solid bulk carriers, the additional competition coming from the low wages yards in the Baltic and Black seas offering much lower prices and the strong valuation of Euro against the US dollar had a negative impact on Lisnave Shiprepair activity. In spite of the above referred facts, Lisnave gained market share to their main competitors having repaired 125 vessels, more than 10% compared to 2003, with an increase on the volume of sales around 15%. Like we had seen in the two previous years, the market segment of conversions and upgrades of ships and platforms for oil elds remained stagnant. However, the present world economy and the price of crude oil may justify the demand for this type of conversions. The expansion of the world eet, tighter regulatory demands and the actual recovery of freight rates, should lift the repair activity in the next coming years. In particular, the deliveries of LNG over the next few years, representing more than 70% of the current world eet, with a considerable volume of LNG trading activity on the Atlantic Basin, will give an opportunity to the shipyards with large docks, which is the case of Lisnave.

Romania
General situation
The Romanian economy is continuing to show a positive trend; the gross domestic production increased with more than 6%, and the industrial output increased above this gure. The ination rate is decreasing constantly, from about 14% in 2003 to about 9% in 2004. The majority of main shipyards has been privatised. Only one shipyard remained as state company.

12
Reports of the National Associations
CESA 2004 - 2005

Shipbuilding
In 2004, Romanian shipyards completed and delivered ships totalling 64 999 gt / 93 865 cgt, slightly less compared with the 2003 results. The orderbook at the end of 2004 consisted of 612 535 gt / 646 690 cgt. The nancial results have been badly inuenced, because of the trends on the monetary market. The EURO main contracting currency weakened against Romanian LEU (RoL), by about 10%,

63

comparing to mean exchange rate for 2003. Above this, the tremendous increase in price of steel, when compared with the price on the date of vessels contracts, added a lot of losses. The total work force engaged in shipbuilding yards was 17 303 persons at the end of 2004, of which 1 300 for ship repairing.

Shiprepair
The total turnover in this activity slightly decreased to 47.3 millions USD in 2004, compared with 51.4 millions USD in 2003.

Spain
General situation
After several quarters of sustained growth running at a rate of 2.6%, the Spanish economy ended the year 2004 with a slight rise in activity. Although the year-on-year change in domestic demand is estimated to have turned down slightly, following growth of 4.4% in Q3, the improvement in tourism in the closing months of the year and a slight reduction in the notable momentum of imports have helped ease the negative contribution of external demand. GDP is thus estimated to have increased by 2.7% year-on-year in Q4, 0.1 pp up on the QNA estimate for the two previous quarters, and by 0.8% in quarter-on-quarter terms, also above the previous estimate.

12
Reports of the National Associations

In any event, the Spanish economy ended the year in line with previous trends: domestic demand increased notably and, despite slowing, grew by over 4%; the contribution by the external sector was strongly negative and the rate of job creation high; and ination, measured by the CPI, was driven by dearer oil and closed the year standing at 3.2%. The Spanish economy, against this background of international expansion and moderate growth in the euro area, has sustained its own dynamism and a positive and signicant growth differential with the euro area. Domestic spending, underpinned by generous nancial conditions, high job-creation capacity and favourable demand expectations for companies, remained forcefully buoyant in Spain in the nal months of 2004, despite the moderate slowdown in private consumption and investment. The negative contribution of net external demand to GDP growth declined somewhat, giving rise to an increase in activity of 2.7%, slightly up on the previous quarters gure of 2.6%.

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64

Shipbuilding
State owned Izar was forced into liquidation after the European Commission ordered it to repay 1.200 million Euro which it had received. After months of labour and political negotiations, the government created a new company called Navantia. Navantia has absorbed a workforce of 5,562 employees and facilities in Ferrol, Fene, Cartagena, Cdiz, Puerto Real and San Fernando, as well as the head ofce in Madrid.The companys main focus will be on military contracts, only up to 20% of its total business can come from civilian work.) The company boasts an ample catalogue of vessels ranging from aircraft carriers to coastguard cutters and has a solid market reputation offering extensive experience across the broad process of naval shipbuilding, from ship design and construction to propulsion and weapons systems. Private shipbuilders are enjoying brighter prospects than their public counterparts. They mainly have caught their market share in the segment of sophisticated ship types with a high added value component, such as Ro-Pax ferries, offshore vessels, chemical and product carriers, container vessels and shing vessels. Shipbuilding data for the year 2004 N Production (of which for foreign account) New orders (of which for foreign account) Orderbook (of which for foreign account) 41 23 66 34 70 36 GT 379 339 336 296 139 179 88 619 219 311 149 099 CGT 376 782 290 561 256 347 140 776 342 445 204 056
(approx. value)

Mill. Euro

1 248.39 1 051.68 761.31 424.80 979.44 568.91

Shiprepairing
After several years of sustained growth, the year 2004 was a stagnation period.The turnover reached 228 million , a similar gure to the last years. A lower shiprepairing demand as a consequence of high freight rates has intensied the competition between the yards in the world. Direct employment in shiprepair by end 2004 was 1547 persons slightly down on the situation one year earlier.

12
Reports of the National Associations
CESA 2004 - 2005

65

United Kingdom
General situation
The UK economy remains in good shape, with unemployment extremely low but ination also at a low level. However, recent studies indicate that the manufacturing sector has suffered a signicant loss of jobs in recent years, with increased employment in the public sector taking up the slack.

New merchant ship orders have been extremely difcult to win, outside specialist areas such as superyachts and shing vessels. Immediately, the larger building yards in the UK are focused on the requirement for a range of vessels both warships and support ships from the Ministry of Defence which will absorb a high proportion of the sectors capacity for some years to come.Yards are, nonetheless, maintaining an interest in the merchant sector since they recognise that they cannot rely completely on MoD as a single customer.

Shipbuilding

Shiprepair
2004 was a generally satisfactory year for the repair and conversion yards in the UK. Harland & Wolff in Belfast is now concentrated on repair, and was busy throughout the year, as was A&P group. North Western Shiprepair consolidated its activities in a number of dry docks on Merseyside, and added a large facility on the Clyde to increase the size of ships they can accommodate. At the smaller end of the market, the Pendennis yard in the south west opened a new facility for ret of superyachts, demand for the facility meaning that it was fully occupied before it was ofcially opened.

12
Reports of the National Associations

CESA 2004 - 2005

66

13.

CESA social events

General Assembly, Algarve

The 59th AWES General Assembly and the CESA General Assembly took place in Hotel Quinta do Lago in Algarve (Portugal) on 28 May 2004. During this gathering, CESAs new name, i.e. Community of European Shipyards Associations, was ofcially adopted.The decision of renaming the association was the result of merging AWES, the Association of European Shipbuilders and Shiprepairers, with CESA, the Committee of European Shipbuilders Associations. This step streamlined the internal organisation structure and, therefore, led to more effective operation to the benet of all member yards and associations. The name change together with new statutes and rules was ofcially implemented on 1 July 2004.

CESA & EMEC New Year Reception

On 20 January 2004, the annual CESA & EMEC New Year reception was organised for the third time in the Bibliothque Solvay. Special guest and key note speaker of the evening was Romano Prodi, President of the European Commission. In 2005, the annual CESA & EMEC New Year reception took place in the same venue on 1 February 2005. On this occasion, the key note speaker Gnter Verheugen, Vice-President and Commissioner for Enterprise and Industry of the European Commission, emphasised his strong support for the sector and its joint policy of LeaderSHIP 2015. The same evening, CESAs new industry promotion lm Europe on the Move was presented.

13

CESA 2004 - 2005

67

CESA social events

Annex 1 Statistics 2004

SHIPBUILDING IN CESA COUNTRIES DURING 2004 IN GT
Orderbook N CROATIA DENMARK FINLAND FRANCE GERMANY GREECE ITALY NETHERLANDS NORWAY POLAND PORTUGAL ROMANIA SPAIN UNITED KINGDOM TOTAL 69 9 5 26 147 0 41 173 63 95 9 39 70 8 754 GT 1.976.199 107.619 391.200 475.490 3.022.372 0 1.633.744 602.350 237.241 2.870.496 24.434 612.535 217.958 4.676 12.176.314 Completions N 20 9 4 15 61 1 27 114 34 25 2 9 41 2 364 GT 625.686 293.758 235.627 64.698 977.241 2.990 529.749 262.750 61.503 619.047 10.020 64.999 379.339 1.050 4.128.457 New orders N 37 11 3 15 86 0 32 139 65 51 0 24 66 4 533 GT 1.102.852 209.560 224.300 282.629 1.666.216 0 1.107.393 343.850 239.141 1.453.055 0 442.913 139.179 2.650 7.213.738 28 539.190 6 270.440 22 268.750 Cancellations N GT

Source: CESA SHIPBUILDING IN CESA COUNTRIES DURING 2004 IN CGT

Orderbook N CROATIA DENMARK FINLAND FRANCE GERMANY GREECE ITALY NETHERLANDS 69 9 5 26 147 0 41 173 63 95 9 39 70 8 754 CGT 1.329.597 90.646 471.670 511.760 2.773.570 0 1.901.981 870.130 462.752 2.112.617 37.261 646.690 342.446 15.444 11.566.564 Completions N 20 9 4 15 61 1 27 114 34 25 2 9 41 2 364 CGT 430.750 203.444 266.419 105.592 907.320 897 633.603 449.710 194.583 448.684 10.846 93.865 376.781 3.550 4.126.044 New orders N 37 11 3 15 86 0 32 139 65 51 0 24 66 4 533 CGT 723.111 156.270 257.870 320.313 1.540.253 0 1.284.886 536.200 472.772 1.088.744 0 437.075 256.348 9.040 7.082.882 28 406.915 6 182.290 22 224.625 Cancellations N CGT

Annex 1 - Statistics 2004

NORWAY POLAND PORTUGAL ROMANIA SPAIN UNITED KINGDOM TOTAL

Source: CESA

CESA 2004 - 2005

68

CESA TOTALS - NEW ORDERS BY SHIPTYPE

N Orders placed in 2004 Of which for foreign account Types of ships ordered in 2004 Crude Oil Tankers (double hull) Product and Chemical Carriers General Cargo Ships Full Container Ships Ro-Ro Vessels Car Carriers LPG Carriers LNG Carriers Ferries Passenger Ships Fishing Vessels Other Non-Cargo Vessels Cancellations reported during 2004 Of which for foreign account 8 53 38 149 8 9 3 1 32 32 48 152 28 13 140.288 1.162.157 118.266 2.918.790 195.980 474.120 11.200 97.000 485.782 1.376.336 26.912 206.907 539.190 336.690 1,9 16,1 1,6 40,5 2,7 6,6 0,2 1,3 6,7 19,1 0,4 2,9 100 62,4 103.625 892.731 170.842 2.352.463 221.050 279.329 23.580 72.750 489.754 1.805.480 94.506 576.772 406.915 241.915 1,5 12,6 2,4 33,2 3,1 3,9 0,3 1,0 6,9 25,5 1,3 8,1 100 59,5 533 318 GT 7.213.738 5.500.742 % 100.0 76,3 CGT 7.082.882 5.252.090 % 100.0 74,2

Source: CESA

WORKFORCE IN CESA COUNTRIES

COUNTRY BELGIUM CROATIA DENMARK FINLAND FRANCE GERMANY GREECE IRELAND ITALY NETHERLANDS NORWAY POLAND PORTUGAL ROMANIA SPAIN SWEDEN UNITED KINGDOM TOTAL 1975 10.245 18.900 18.000 40.354 105.988 10.159 1.633 36.260 39.850 29.000 17.100 47.000 31.500 55.999 461.988 2004 0 9.529 3.100 4.800 3.500 22.982 3.174 0 7.765 9.500 5.000 15.500 1.981 17.303 5.562 0 7.000 116.696

Source: CESA

CESA 2004 - 2005

69

Annex 1 - Statistics 2004

CESA TOTALS - ORDERBOOK BY SHIPTYPE

N Total tonnage on order book on 31.12.2004 Of which for foreign account Types of ships according to orderbook on 31.12.2004 Crude Oil Tankers (double hull) Product and Chemical Carriers Bulk Carriers excl. Combined Carriers General Cargo Ships Full Container Ships Ro-Ro Vessels Car Carriers LPG Carriers LNG Carriers Ferries Passenger Ships Fishing Vessels Other Non-Cargo Vessels Approximate value of order book on 31.12.2004 in mEuro Of which for foreign account in mEuro 23.491 17.793 15 84 1 56 235 21 25 5 3 42 47 50 170 322.384 1.887.029 17.350 265.428 4.527.128 434.000 1.175.520 110.300 243.700 669.037 2.200.992 30.915 292.531 2,6 15,5 0,1 2,2 37,2 3,6 9,7 0,9 2,0 5,5 18,1 0,3 2,4 241.925 1.445.958 12.145 332.972 3.659.753 477.444 704.648 92.950 195.200 677.396 2.861.820 108.181 756.172 2,1 12,5 0,1 2,9 31,6 4,1 6,1 0,8 1,7 5,9 24,7 0,9 6,5 754 473 GT 12.176.314 9.559.948 % 100.0 78,5 CGT 11.566.564 8.866.233 % 100.0 77,0

Source: CESA CESA TOTALS - COMPLETIONS BY SHIPTYPE

N Completed in 2004 Of which for foreign account Types of ships completed in 2004 Crude Oil Tankers (double hull) Product and Chemical Carriers General Cargo Ships Full Container Ships Ro-Ro Vessels Car Carriers LPG Carriers LNG Carriers Ferries Passenger Ships Fishing Vessels Other Non-Cargo Vessels Approximate value of completions During 2004 in mEuro Of which for foreign account in mEuro 10.463 6.703 3 31 33 65 4 6 2 4 25 24 68 99 120.686 606.764 152.729 1.339.205 73.600 313.456 5.800 281.850 319.623 713.484 72.869 128.391 2,9 14,7 3,7 32,4 1,8 7,6 0,1 6,8 7,7 17,3 1,8 3,1 58.761 503.182 192.764 1.073.776 61.880 180.662 7.250 213.338 321.895 966.626 210.074 335.836 1,4 12,2 4,7 26,0 1,5 4,4 0,2 5,2 7,8 23,4 5,1 8,1 364 220 GT 4.128.457 2.923.345 % 100.0 70,8 CGT 4.126.044 2.842.836 % 100.0 68,9

Annex 1 - Statistics 2004

Source: CESA
CESA 2004 - 2005

70

CESA COMPLETIONS 2000 - 2004

2000 CROATIA N CGT - Export Total value in mEuro Export in mEuro DENMARK N CGT - Export Total value in mEuro - Export in mEuro FINLAND N CGT - Export Total value in mEuro - Export in mEuro FRANCE N CGT - Export Total value in mEuro - Export in mEuro GERMANY N CGT - Export Total value in mEuro - Export in mEuro GREECE N CGT - Export Total value in mEuro - Export in mEuro ITALY N CGT - Export Total value in mEuro - Export in mEuro NETHERLANDS N CGT - Export Total value in mEuro - Export in mEuro NORWAY N CGT - Export Total value in mEuro - Export in mEuro POLAND N CGT - Export Total value in mEuro - Export in mEuro PORTUGAL N CGT - Export Total value in mEuro - Export in mEuro ROMANIA N CGT - Export Total value in mEuro - Export in mEuro SPAIN N CGT - Export Total value in mEuro - Export in mEuro UNITED KINGDOM N CGT - Export Total value in mEuro - Export in mEuro CESA TOTAL N CGT - Export Total value in mEuro - Export in mEuro 12 275 701 21 140 538 2 279 625 279 625 908 908 38 342 628 290 973 1 098 930 63 976 078 672 722 2 329 1 654 0 0 0 0 0 29 543 699 453 595 1 829 1 574 157 587 335 411 155 1 163 815 56 373 487 171 272 1 115 533 34 502 530 493 854 897 890 5 56 259 38 982 96 66 22 153 805 153 805 257 257 58 400 411 323 555 1 150 964 13 51 595 180 489 4 543 153 3 310 678 11 560 8 591 2001 13 252 308 631 5 462 350 462 350 1 023 1 023 24 459 897 378 493 1 450 1 150 53 1 064 928 690 199 3 011 2 177 0 0 0 0 0 23 522 955 368 669 1 406 935 111 496 780 279 530 967 592 64 446 160 159 082 1 626 580 28 477 560 475 834 784 780 9 29 801 70 9 105 126 105 126 186 186 62 289 629 133 206 954 512 11 33 409 89 412 4 640 903 3 052 489 12 197 7 935 2002 17 317 307 266 117 448 374 15 315 935 484 6 358 350 358 350 1 171 1 171 19 353 205 324 674 1 100 1 030 68 1 229 022 863 406 3 416 2 657 0 0 0 0 0 18 650 765 537 790 1 815 1 507 106 467 575 298 245 950 679 77 558 599 157 368 1 654 466 30 497 563 497 563 759 759 1 3 330 6 12 148 587 148 587 272 272 52 301 229 156 191 934 566 4 35 051 81 425 5 236 518 3 608 291 13 090 9 482 2003 16 331 570 330 289 489 484 11 276 204 504 2 280 000 280 000 950 950 26 511 242 484 265 1 850 1 700 62 946 177 743 033 2 780 2 308 0 0 0 0 0 33 735 567 302 309 2 208 947 90 313 570 211 285 725 512 87 660 352 210 458 2 152 686 14 288 211 288 211 470 470 4 40 236 72 9 98 605 98 605 151 151 84 505 540 216 671 1 927 938 4 24 523 50 442 5 011 797 3 165 126 14 328 9 147 2004 20 430 750 402 636 466 432 9 203 444 479* 4 266 419 210 899 975 820 15 105 592 90 816 370 61 907 320 536 321 2 306 1 550 1 897 897 49 49 27 633 603 382 870 2 212 1 423 114 449 710 293 780 1 050 770 34 194 583 91 507 501 25 448 684 448 684 607 607 2 10 846 54 9 93 865 93 865 134* 41 376 781 290 561 1 248 1 052 2 3 550 12 364 4 126 044 2 842 836 10 463 6 703

* estimated

Source: CESA

CESA 2004 - 2005

71

Annex 1 - Statistics 2004

SPECIFICATION IN COMPENSATED TONNAGE OF TYPES OF SHIPS - of order book at end of DECEMBER 2004 - completed during JANUARY - DECEMBER 2004 - ordered during JANUARY - DECEMBER 2004
Type
Crude Oil Tankers (double hull tankers only) Under 4,000 dwt 4 - 10,000 dwt 10 - 30,000 dwt 30 - 50,000 dwt 50 - 80,000 dwt 80 - 160,000 dwt 160 - 250,000 dwt 250,000 dwt and over Product and Chemical Carriers Under 4,000 dwt 4 - 10,000 dwt 10 - 30,000 dwt 30 - 50,000 dwt 50 - 80,000 dwt 80,000 dwt and over Bulk Carriers (exl. Combined Carriers) Under 4,000 dwt 4 - 10,000 dwt 10 - 30,000 dwt 30 - 50,000 dwt 50 - 80,000 dwt 80 - 160,000 dwt 160,000 dwt and over General Cargo Ships Under 4,000 dwt 4 - 10,000 dwt 10 - 20,000 dwt 20 - 30,000 dwt 30 - 50,000 dwt 50 - 80,000 dwt 80 - 160,000 dwt 1,85 1,35 1 0,85 0,7 0,75 10 45 0 2 1 0 0 0 41.962 249.570 0 31.450 24.390 0 0 0 10 20 1 2 0 0 0 0 39.035 105.570 18.289 29.870 0 0 0 0 11 29 0 0 0 0 0 0 41.377 143.865 0 0 0 0 0 0 1,6 1,1 0,7 0,6 0,5 0,4 0,3 0 0 1 0 0 0 0 0 0 12.145 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2,3 1,6 1,05 0,8 0,6 0,55 6 12 10 33 22 1 21.456 86.394 108.902 732.092 464.494 32.620 2 5 8 14 0 2 8.982 38.080 91.573 301.526 0 63.020 4 6 9 18 16 0 14.656 34.560 101.552 406.802 335.160 0 1,85 1,3 0,85 0,7 0,55 0,45 0,35 0,3 4 6 0 0 3 0 2 0 23.165 45.890 0 0 113.850 0 59.020 0 1 0 0 0 0 2 0 0 5.735 0 0 0 0 53.026 0 0 1 5 0 0 1 0 1 0 3.740 32.425 0 0 37.950 0 29.510 0

Coef.

Order Book No. CGT No.

Completions CGT No.

New orders CGT

Annex 1 - Statistics 2004

160,000 dwt and over Full Container Ships and High Speed Liners Under 4,000 dwt 4 - 10,000 dwt 10 - 20,000 dwt 20 - 30,000 dwt 30 - 50,000 dwt 50,000 dwt and over 1,85 1,2 0,9 0,8 0,75 0,65

20 58 42 15 81 17

79.920 461.480 504.272 200.721 1.822.931 576.030

2 14 17 5 23 4

7.400 130.072 172.267 88.687 487.500 187.850

17 34 26 13 43 14

68.820 284.912 342.419 172.400 992.413 477.100

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Ro-Ro Vessels Under 4,000 dwt 4 - 10,000 dwt 10 - 20,000 dwt 20 - 30,000 dwt 30,000 dwt and over Car Carriers Under 4,000 dwt 4 - 10,000 dwt 10 - 20,000 dwt 20 - 30,000 dwt 30,000 dwt and over LPG Carriers Under 4,000 dwt 4 - 10,000 dwt 10 - 20,000 dwt 20 - 30,000 dwt 30 - 50,000 dwt 50,000 dwt and over LNG Carriers Under 4,000 dwt 4 - 10,000 dwt 10 - 20,000 dwt 20 - 30,000 dwt 30 - 50,000 dwt 50,000 dwt and over Ferries Under 1,000 gt 1 - 3,000 gt 3 - 10,000 gt 10 - 20,000 gt 20,000 gt and over Passenger Vessels Under 1,000 gt 1 - 3,000 gt 3 - 10,000 gt 10 - 20,000 gt 20 - 40,000 gt 40 - 60,000 gt 60,000 gt and over Fishing Vessels Under 1,000 gt 1 - 3,000 gt 3,000 gt and over Other Non Cargo Vessels Under 1,000 gt 1 - 3,000 gt 3 - 10,000 gt 10,000 gt and over Total 5 3,2 2 1,5 92 52 23 3 754 157.799 307.950 199.522 90.900 11.566.564 74 20 10 3 364 104.098 121.557 89.000 61.500 4.126.044 87 44 20 1 533 140.580 261.070 154.722 20.400 7.082.882 4 3 2 46 3 1 75.488 25.101 7.592 40 17 3 55.624 88.239 25.892 45 2 1 70.264 16.650 7.592 6 4 3 2 1,6 1,4 1,25 8 11 6 1 0 0 21 25.860 61.320 68.700 21.000 0 0 2.684.940 10 3 2 1 1 1 6 28.620 11.297 26.400 30.400 55.520 82.681 731.708 10 1 7 1 0 0 13 35.760 4.400 78.600 21.000 0 0 3 2,25 1,65 1,15 0,9 11 6 2 9 14 24.495 30.723 16.170 146.888 459.120 11 6 0 1 7 19.321 26.934 0 19.944 255.697 9 5 1 7 10 15.683 23.298 7.920 112.733 330.120 1,25 1,15 1 0,75 0 0 1 2 0 0 0 0 49.700 145.500 0 0 1 0 0 3 0 0 3.075 0 0 210.263 0 0 0 0 0 1 0 0 0 0 0 72.750 0 0 2,05 1,6 1,15 0,9 0,8 0,7 1 2 0 0 0 2 2.460 21.120 0 0 0 69.370 2 0 0 0 0 0 7.250 0 0 0 0 0 1 2 0 0 0 0 2.460 21.120 0 0 0 0 1,1 0,75 0,65 0,55 0,45 0 4 9 12 0 0 73.500 250.328 380.820 0 0 0 2 4 0 0 0 53.697 126.965 0 0 0 4 5 0 0 0 120.654 158.675 0 1,5 1,05 0,8 0,7 0,65 3 10 8 0 0 99.450 179.914 198.080 0 0 0 2 2 0 0 0 12.600 49.280 0 0 3 0 5 0 0 99.450 0 121.600 0 0

Source: CESA
CESA 2004 - 2005

73

Annex 1 - Statistics 2004

1.665.720

Annex 2 Member Associations

Croatian Shipbuilding Corporation Avenija V. Holjevca, 20 - 10 020 Zagreb - Croatia Tel: +385 - 1 6554 111 - Fax: +385 - 1 6528 420 E-mail: hb@hb.hr - Internet: http://www.hb.hr Danish Maritime Store Kongensgade, 128 - 1264 Copenhagen - Denmark Tel: +45 - 33 13 24 16 - Fax: +45 - 33 11 10 96 E-mail: mail@danishmaritime.org - Internet: http://www.danishmaritime.org Association of Finnish Marine Industries Association of Finnish Marine Industries - Etelranta, 10 - 00131 Helsinki - Finland Tel: +358 - 9 1923 399 - Fax: +358 - 9 6222 606 E-mail: henrik.nordell@techind. - Internet: http://www.marineindustries. Chambre Syndicale des Constructeurs de Navires 47, rue Monceau - 75008 Paris - France Tel: +33 - 1 5389 5201 - Fax: +33 - 1 5389 5212 E-mail: cscn@club-internet.fr - Internet: http://www.cscn.fr Verband fr Schiffbau und Meerestechnik e. V. An der Alster, 1 - 20099 Hamburg - Germany Tel: +49 - 4028 0152 0 - Fax: +49 - 4028 0152 30 E-mail: vsm@info.de - Internet: http://www.vsm.de Association of Hellenic Shipbuilding and Shiprepairing Industries Akti Miaouli, 67 - 185 37 Pireaus - Greece Tel: +30 - 210 41 84 960 - Fax: +30 - 210 41 84 961 E-mail: eenb@ath.forthnet.gr Associazione Nationale dell industria Navalmeccanica Via Tevere, 1/a - 00198 Rome - Italy Tel: +39 - 06 84 240 400 - Fax: +39 - 06 84 514 229 E-mail: assonave@ncantieri.it - Internet: http://www.assonave.it Vereniging Nederlandse Scheepsbouw Industrie Boerhaavelaan, 40 - Postbus 138 - 2700 AC Zoetermeer - The Netherlands Tel: +31 - 79 353 11 65 - Fax: +31 - 79 353 11 55 E-mail: info@vnsi.nl - Internet: http://www.vnsi.nl Teknologibedriftenes Landsforening Maritime Oscarsgate, 20 - PO box 7072 Majorstuen - 0306 Oslo - Norway Tel: +48 - 58 307 12 49 - Fax: +48 - 58 307 12 56 E-mail: eh@tbl.no - Internet: http://www.tbl.no

Annex 2 - Member Associations

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 Zwiazek Pracodawcw FORUM OKRETOWE ul. Uphagena, 23 - 80-237 Gdansk - Poland Tel/Fax: +48 - 58 345 82 89 E-mail: forum@forumokretowe.org.pl - Internet: http://www.forumokretowe.org.pl Associao das Indstrias Martimas Rua Jorge Afonso, 31- 6 - 1600-126 Lisboa Portugal Tel: +351 - 21 781 8770 - Fax: +351 - 21 781 8779 E-mail: a.i.maritimas@mail.telepac.pt - Internet: http://www.aim.pt Asociatia Nationala a Constructorilor de Navedin Domneasca Street, 105 - 6200 Galati - Romania Tel: +402 - 36 412 751 - Fax: +402 - 36 460 947 E-mail: anconav.catrinescu@icepronav.ro Unin Espaola de Constructores Navales Cardenal Herrera Oria, 57; 2 - 28034 Madrid - Spain Tel: +34 - 91 417 04 37 - Fax: +34 - 91 729 36 47 E-mail: uninave@uninave.es - Internet: http://www.uninave.es Shipbuilders and Shiprepairers Association Meadlake Place - Thorpe Lea Road - Egham Surrey TW208BF - United Kingdom Tel: +44 - 1784 22 37 70 - Fax: +44 - 1784 22 37 75 E-mail: ofce@ssa.org.uk - Internet: http://www.ssa.org.uk

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Annex 2 - Member Associations

Annex 3 CESA internal

Chairman and Chairman Committee

Chairman Patrick Boissier CEO of Chantiers de lAtlantique Yrj Julin President of Aker Finnyards Francisco Arderus CEO of Union Naval Barcelona Corrado Antonini President of Fincantieri Reinhard Lken

Vice-Chairmen

Honorary Chairman Secretary General

Chairmen and Directors of CESA National Associations

Chairman
Croatia Croation Shipbuilding Associations Denmark Danish Maritime Finland Association of Finnish Marine Industries France Chambre Syndicale des Constructeurs de Navires Germany Verband Fr Schiffbau und Meerestechnik e.V. Greece Association of Hellenic Shipbuilding and Shiprepairing Industries Italy Associazione Nationale dell industria Navalmeccanica The Netherlands Vereniging Nederlandse Scheepsbouw Industrie Norway Teknologibedriftenes Landsforening Maritime Vladimir Vrankovic Arne Pedersen Yrj Julin Patrick Boissier Bernard Meyer Costas Kokkalas Corrado Antonini Manfred A. Busker Stig Aga Frederico Spranger Jerzy Lewandowski D. Ivanov Jos Francisco Gonzlez Vias Brian Slade

Director
Nada Braovic Thorkil Christensen Henrik Nordell Fabrice Theobald Werner Lundt Costas Kokkalas Renato Sicurezza Ruud Schouten Egil Holland Director: Jos Ventura de Sousa Slawomir Skrzypinski Gheorghe Catrinescu Jos Ramn Lpez Eady Tom Dougherty

Annex 3 - CESA internal

Portugal Associao das Indstrias Martimas Poland Zwiazek Pracodawcw FORUM OKRETOWE Romania Asociatia Nationala a Constructorilor de Navedin Spain Unin Espaola de Constructores Navales United Kingdom Shipbuilders and Shiprepairers Association

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CESA Working Groups and Committees

COREDES
Chair: Vice-Chairmen: Secretary: Secretariat (Brussels): Michael vom Baur (Aker Yards ASA) Michael Goldan (VNSI) Mariano Perez Sobrino (Navantia, retired on 31.05.2005, successor not nominated yet) Detlef Lemke (Imawis) Paris Sansoglou (CESA) Sergio Fonseca (ENVC) Emma Harrison (BAE Systems) Advisory Committee: Eero Mkinen (Aker Finnyards) Michael Prehn (Danish Maritime) Jerzy Wrbel (Stocznia Gdynia) Torben Andersen (Odense Steel Shipyard) Berend Bohlmann (FSG Flensburger) Carlo Camisetti (Cetena) Mladen Crluka (CSC) Aage Damsgaard (Force Technology) Johan De Jong (MARIN) Tom Dougherty (SSA) Hakan Enlund (Aker Finnyards) Members: Nenad Flesch (Brodotrogir Shipyard) Sergio Fonseca (ENVC) Michael Goldan (VNSI) Emma Harrison (BAE Systems) Egil Holland (TBL Skip) Suzanna Lapique (Navantia) Theodore Loukakis (NTUA) Eero Mkinen (Aker Finnyards) Luciano Manzon (Fincantieri) Livio Marchesini (Fincantieri) Experts: Joachim Brodda (Balance Technology Consulting) Ralf Sren Marquardt (VSM) Luigi Mor (Cetena) Henrik Nordell (AFMI) Marek Nowak (Stocznia Szczecinska) Apostolos Papanikolaou (NTUA) Patrick Person (Pemar R-D) Antonio Perez de Luca (Navantia) Michael Prehn (Danish Maritime) Frank Roland (CMT) Antonio Sanchez Jauregui (GTSN) Paul Suinat (Chantiers de lAtlantique) Yves Tallec (Chantiers de lAtlantique) Tore Ulstein (Ulstein Verft) Rob van de Graaf (VNSI) Jos Ventura de Sousa (AIM) Leszek Wilczynski (CTO) Jerzy Wrbel (Stocznia Gdynia) Vedran Zanic (University of Zagreb) Kaj Johansson (AVEVA) Frank Roland (CMT) Luciano Manzon (Fincantieri) Yves Tallec (Chantiers de lAtlantique) Tore Ulstein (Ulstein Verft)

Working Group on Market Monitoring

Chairman: Thorkil Christensen (Danish Maritime) Francisco Archanco (Navantia) Guido Assereto (Fincantieri) Members: Elise Heidenreich (Aker Yards ASA) Mathias Mnchau (VSM) Damir Poljak (Brodosplit Shipyard) Jos Ventura de Sousa (AIM) Gerhard Carlsson (VSM) Jos Ramn Lpez Eady (Uninave) Andrzej Nadworny (Stocznia Gdynia) Fabrice Theobald (CSCN)

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Annex 3 - CESA internal

 Working Group on Market & Forecast

Chairman: Thorkil Christensen (Danish Maritime) Francisco Archanco (Navantia) Jenny Braat (Danish Maritime) Members: Knut Helge Osmundsvag (Research Council of Norway) Matti Trma (Aker Finnyards) Guido Assereto (Fincantieri) Gerhard Carlsson (VSM) Damir Poljak (Brodosplit Shipyard) Jerzy Wrbel (Stocznia Gdynia)

Working Group on Trade Issues

Chairman: Members: Mathias Mnchau (VSM) Guido Assereto (Fincantieri) Sergio Fonseca (ENVC) Michael Prehn (Danish Maritime) Thorkil Christensen (Danish Maritime) Jos Carlos Gonzlez Sama (Navantia) Fabrice Theobald (CSCN)

Working Group on Social Dialogue

Chairman: Secretary: Enrique Calvet Chambon (Navantia/Uninave) Jing Shen (CESA) Thorkil Christensen (Danish Maritime) Frdrique Fontenilles (DCN) Members: Werner Lundt (VSM) Dick Schotte (VNSI) Pierfrancesco Tartarelli (Fincantieri) Sergio Fonseca (ENVC) Nick Granger (SSA) Christophe Mabit (Chantiers de lAtlantique) Renato Sicurezza (Assonave) Fabrice Theobald (CSCN)

Technical Advisory Committee

Chairman: not nominated yet Marijan Antonja (Uljanik Shipyard) Grard Baumes (Chantiers de lAtlantique) Michael Prehn (Danish Maritime) Nenad Flesch (Brodotrogir Shipyard) Rafael Gutirrez Fraile (Navantia) Members: Luc Lemoine (Chantiers de lAtlantique) Alessandro Maccari (Fincantieri) Livio Marchesini (Fincantieri)
Lorka Pavletic (3. MAJ Shipyard)

Guido Assereto (Fincantieri) Jenny Braat (Danish Maritime) Boris Fderowski (CSCN) Nick Granger (SSA) Ronald Horn (Lindenau Shipyards) Jos Ramn Lpez Eady (Uninave) Eero Mkinen (Aker Finnyards)
Ralf Sren Marquardt (CESA representative at IMO)

Annex 3 - CESA internal

Frederico Spranger (AIM) Peter Tang-Jensen (Odense Steel Shipyard)

Yves Tallec (Chantiers de lAtlantique) Thomas Witolla (Jos L. Meyer)

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 Interyard Group on Ship Repair

Chairman: Vice-Chairman: Secretary: Francisco Arderius (Union Naval Barcelona) Werner Lken (Lloydwerft) Nick Granger Francisco Archanco (Navantia) Jos Ramn Lpez Eady (Univave) Members: Mathias Mnchau (VSM) Ruud Schouten (VNSI) Frederico Spranger (AIM) Bernard Furic (Sirena) Peter Moore (Malta Shipyard) Sinisa Ostojic (Kraljevica Shipyard) Renato Sicurezza (Assonave)

Naval Yard Group

Chairman: Corrado Antonini (Fincantieri) Sergio Fonseca (ENVC) Rafael Gutirrez Fraile (Navantia) Willem Laros (Royal Schelde) Members: Henrik Nordell (Fimet) Philippe Riot (DCN) Renato Sicurezza (Assonave) Fabrice Theobald (CSCN) Hein van Ameijden (Schelde Naval Shipbuilding) Nick Granger (SSA) Egil Holland (TBL Skip) Alberto Maestrini (Fincantieri) Ton Rietdijk (Merwede Shipyard) Christian Rdin-Nielsen (Odense Steel Shipyard) Christian Stuve (Thyssenkrupp Marine Systems) George Thompson (BAE Systems)

CESA Ofce
Secretary General Policy Advisers Reinhard Lken Arkadiusz Aszyk Paris Sansoglou Jing Shen Ofce Management Acha Amarochi Vronique Verhoeven

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Annex 3 - CESA internal

Annex 4 Glossary

ASD AWES CCNR CESA CGT COREDES CSERC DE DG COMP DG EMPL DG ENTR DG RTD DG TRADE DG TREN DWT EC ECSA EEIG EMEC EMECRID EMF EMSA EMSA DH HLP ERAMAR ERASTAR ESC ESDP ESPO Annex 4 - Glossary ETA ETF EU FP FPSO FSU GBS GDP GT

European Aerospace and Defence Industry Association Association of European Shipbuilders and Shiprepairers Central Commission for the Navigation of the Rhine Community of European Shipyards Associations Compensated Gross Tonnage Committee for Research and Development in European Shipbuilding (the R&D Working Group of CESA) Shipbuilding Economy Research Centre of China IMO Sub-Committee Ship Design and Equipment EC Directorate-General for Competition EC Directorate-General for Employment, Social Affairs and Equal Opportunities EC Directorate-General for Enterprise and Industry EC Directorate-General for Research EC Directorate-General for Trade EC Directorate-General for Competition Dead Weight Tonnage European Commission European Community Shipowners Association European Economic Interest Grouping European Marine Equipment Council EMEC RDI working group European Metalworkers Federation European Maritime Safety Agency High Level Panel on Double Hull Tankers European Maritime Research Area European Research Area Thematic Network for the Shipbuilding Technology Applied Research European Shippers Council European Security and Defence Policy European Sea Ports Organisation European Tug-owners Association European Transport Workers Federation European Union EU Framework Programme for Research & Development Floating Production Storage and Ofoading Floating Storage Unit Goal-based Standards Gross Domestic Product Gross Tonnage

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IACS ICS IMO INTERCARGO INTERSHIP INTERTANKO IP IPO IPR ISM ISPS JECKU KSA LNG LPG MARPOL MEPC MIF MSC NGO OCIMF OECD P&I R&D RDI SAJ SCM SME SNG SOLAS TAC TDM TEU VDR WG WTO

International Association of Classication Societies International Chamber of Shipping International Maritime Organization International Association of Dry Cargo Shipowners Integrated Collaborative Design and Production of Cruise Vessels, International Association of Independent Tanker Owners Integrated Project on R&D Initial Public Offering Intellectual Property Rights International Safety Management Code International Ship and Port Facility Security Code Japanese, European, Chinese, Korean, US -Top Executive Meeting Korean Shipbuilding Association Liqueed Natural Gas Liqueed Petroleum Gas International Convention for the Prevention of Pollution from Ships Marine Environment Protection Committee of the IMO Maritime Industry Forum Maritime Safety Committee of the IMO Non-Governmental Organization Oil Companies International Marine Forum Organisation for Economic Co-operation and Development Protection and Indemnity Research & Development Research, Development and Innovation Shipbuilding Association of Japan WTO Agreement on Subsidies and Countervailing Measures Small and Medium Enterprise OECD Special Negotiating Group IMO Convention for the Safety of Life at Sea Technical Advisory Committee Twenty-foot Equivalent Unit Voyage Data Recorder Working Group World Trade Organisation Annex 4 - Glossary
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Annex 5 Picture references*

Page 8 Page 11 Page 14 Page 17 Page 19 Page 20 Page 22 Page 24 Page 25 Page 27 Page 28 Page 29 Page 33 Page 36 Page 42 Page 46 Page 48 Page 50 Page 51 Page 53 Page 55 Page 56 Page 57 Page 59 Page 60 Page 62 Page 63 Page 64 Page 66

Ferry Seafrance Berlioz (Chantiers de lAtlantique) F2000 Off-shore Patrol Vessel (BAE systems) LNG carrier Sestao (Navantia) Laser for welding and cutting (Blohm + Voss) Stan Patrol Vessel 5209 (Damen Shipyards) Research vessel Planet 2 (Nordseewerke) Ferry Nuraghes (Fincantieri) Cruiseship Jewel of the Sea (Jos L. Meyer) Chemical and oil product carrier Maritea (3.MAJ Shipyard) Suezmax oil tanker Alan (Brodosplit Shipyard) River cruiseship ARosa (Neptun Stahlbau) Propeller (Lisnave) Repair works (Lisnave) Three Frigates 124 (ThyssenKrupp Marine Systems) Off-shore Patrol Vessel 491 (Fincantieri) Livestock carrier Becrux (Uljanik Shipyard) Postpanamax containership Lars Maersk (Odense Steelshipyard) Cruiseship Carnival Miracle (Aker Finnyards) Ferry Seafrance Berlioz (Chantiers de lAtlantique) Containerships under construction (Hoxaldtswerke-Deutsche Werft) Yacht Annaliesse (Neorion Syros Shipyards) Ferry Olympic Palace (Fincantieri) Dredger Wan Qing Sha (IHC Holland) Innovative anchor handler Bourbon Name (Ulstein Shipyard) Car carrier Ivory Arrow (Gdynia Shipyard) Section replacement (Lisnave) Hull anchor handler (Akeryards Tulcea) Dive support vessel Aquanaut (Astilleros Balenciaga) T45 Anti-Air Warfare Destroyer (BAE systems)

Annex 5 - Picture references

* Image/photo courtesy of all above mentioned companies

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Ships made in Europe