Polish Shipyards go Up-Market to Find Success
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Polish Shipyards go Up-Market to Find Success


Twenty years ago, Polish shipyards were known for their unprecedented protests against communism, which led eventually to the collapse of the Iron Curtain. Now they are known simply for producing high-quality ships. Turning around a heavily subsidized communist-era industry, took years of tough cost-cutting, deals with creditor banks and a shift to building specialized vessels with higher margins. Poland, now the world's fourth leading ship-maker with a $4 billion order portfolio, does not subsidize production like its main competitors in South Korea, Japan and the European Union.

The Polish shipyards have successfully moved up market with their production - specializing in technically advanced chemical tankers and car ferries instead of mid-sized bulk carriers and fishing vessels. "Our sector basically restructured by itself, without foreign investors or political factors. Perhaps this is why we have found such success," Janusz Szlanta, chief of the Gdynia Yard (Stocznia Gdynia) told Reuters.

To facilitate development, the Gdynia and Szczecin yards plan to tap capital markets and consolidate further to offset Poland's fast-rising labor costs, which over the last decade rose from about 10 percent to 50 percent of those in the EU. The Gdynia yard, which has contracts to build 61 ships for $2.2 billion through 2004, plans to list at least 15 percent of its shares on the Warsaw and London bourses by June 2001. Gdynia, which increased its capacity through a buyout of the failed Gdansk yard, also plans to gain control of the small Polnocna Shipyard, where it already has a 27 percent stake.

"Polish shipyards have left their rivalry behind and now co-operate to take advantage of improving demand on global ship markets," said Stocznia Szczecin's CEO Krzysztof Piotrowski. Both Gdynia and Szczecin benefit from their world-class in house ship design teams. Most of the world's leading ship makers have to outsource costly engineering design services. "Our innovative project and construction design teams significantly improve our competitiveness vis-a-vis foreign competitors," Gdynia's Szlanta said.
The Gdansk Repair Yard (GSR) hopes to spice up its ship fixing business by branching out into oil platform repairs. Last November, GSR finished rebuilding one of the biggest oil rigs in the North Sea for U.S.- based Global Drilling after edging out Norwegians repair firms to gain the contract.

Analysts said that as world ship building countries move away from state subsidies, with the EU hoping to effectively end state aid to yards by 2004, Poland would be at an advantage, having already existed under pure market conditions for years. It is estimated that some 170,000 Poles make their living from the shipbuilding or ship repair business.

Central Europe Online, 1 March 2001  

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