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The Warsaw Voice » Other » July 29, 2009
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Saving Our Shipyards
July 29, 2009 By A.R.    
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There is a chance that Poland's shipyards will continue to build ships once new investors take them over.

For many years the shipbuilding industry was a flagship sector of the Polish economy, and Polish shipyards were among the world's leading producers of ships. However, Polish shipbuilders could not cope with the requirements of the market economy, which began to be introduced in Poland after 1989.

Experts say the latest crisis in Poland's shipbuilding sector is the result of many factors, including delayed shipyard privatization and poor management. Another problem is that shipyards had too many employees, especially outside production. On the other hand, productivity at Polish shipyards is among the lowest in Europe. Another contributing factor was unprofitable contracts that Polish shipyards signed in 2002 and 2003.

Polish shipyards build mainly container ships, car carriers and liners, chemical tankers and ropax ships, or roll on/roll off vessels for freight vehicle transport with passenger accommodation. Polish shipyards do not make technically complicated vessels. Meanwhile, under the EU's shipbuilding strategy, LeaderShip 2015, Europe is expected to play a leading role in the production of highly specialized ships by 2015.

Already in financial dire straits, Polish shipyards faced bankruptcy after the European Commission found them to have received illegal state aid from the Polish government. In November 2008, the European Commission declared that the shipyards in Gdynia and Szczecin had received illegal state aid from the government. Officials in Brussels decided that the two shipyards would not have to return this money-a scenario that would have made them go under-if they sold their assets to the highest bidder.

That is exactly what happened. The assets of both shipyards were acquired at an auction by Stichting Particulier Fonds Greenrights (SPFG), on behalf of the United International Trust N.V. investment fund. The actual investor is the Ad-Dauha-based Qinvest fund, the biggest investment bank in Qatar.

"The important thing about this transaction is that the investor is from Qatar, from where we will import liquefied gas by sea," said Poland's treasury minister Aleksander Grad. The European Commission has voiced no reservations about the contract.

Jan Ruud de Jonge, chairman of the board at Polskie Stocznie (Polish Shipyards) and SPFG, says the plan to revive the two shipyards will rely on business assumptions made on the basis of their order books. Polskie Stocznie Gdynia will build three to four 220,000 DWT ships for transporting liquefied gas per year. Polskie Stocznie Szczecin will make other specialist ships, but also equipment for the maritime industry, including equipment for defense purposes.

"We have complete faith in the experience and production skills of Polish shipyard workers," said de Jonge. "We will adjust employment to the order book, but it is already clear that this will be a much smaller crew than before." The shipyard in Gdynia will probably employ a work force of 2,000, and employment at Szczecin is expected to be around 3,000.

The Gdańsk Shipyard, meanwhile, was acquired in 2007 by Ukrainian consortium ISD Donbas Industrial Union, which today holds 83 percent of the stock. In May, the EU's commissioner for competition, Neelie Kroes, said she would recommend that the European Commission issue a positive decision concerning the restructuring plan for the shipyard. This means that state aid given to the shipyard so far will be recognized as legal; the shipyard will not have to return it and will not be declared bankrupt as a result.

"The Gdańsk Shipyard constitutes huge capital that now only needs a good business model," Kroes said. "I believe that in future it will be able to compete with other shipyards around the world." According to the plan, the shipyard will make steel structures, towers for wind power plants, and ships. Only one of its three slipways will be left; one has already been shut down, another will close later this year. All the restructuring plan's targets for employment will remain unchanged; the shipyard will have a minimum of 1,900 employees.
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