We hear positive noises in the markets from brokers, researchers, ship-owners and even bankers. The global economy and international trade is recovering from the downturn and our clients see improvements in turnover and margins. It looks as if the worst is behind us!
In the Netherlands most companies active in maritime supply or ship building are still trying to make ends meet whilst other sectors in the Dutch economy are recovering. The investment climate however is good: asset prices are modest, demand is growing and interest rates are still low. The Netherlands is still a very attractive place to establish a maritime business. Rotterdam as Maritime Capital of Europe is going strong and disruptive creativity with 3D printing, block chain, and big data will accelerate maritime business efficiency. Charles Groenhuijsen mentioned all this during the Marstrat Think & Drink.
On the back of positive signs in the maritime sector, Marstrat has been involved in many projects showing diversity of our capabilities. We have put together a platform to drive maritime regional promotion, which is in high demand in various parts of the country and abroad. In the field of financial solutions, we have advised a Dutch family business, a US investment fund as well as a public Norwegian offshore company on funding and shipping finance. We are keen to support you as well to make a deal in an environment where funding is a challenge.
Marstrat has travelled West and East and identified exiting developments in the promising energy market in Mexico. Also in Turkey and Thailand we have put our maritime expertise to work where maritime business activity is recuperating.
A new phenomenon is rising in The Netherlands: regional initiatives for promotion and policy specifically focused on the maritime sector. Recently, Rotterdam started the branding campaign ‘Maritime Capital of Europe‘. The city started up a top level Maritime Board for attracting new business from abroad. The Drecht Cities are active under the brand ‘Drecht Cities Maritime Delta‘, and West Holland. Schiedam, a city next to Rotterdam, is starting an initiative and in the North of Holland, the Province of Groningen is gearing up with a new campaign.
Marstrat’s Martin Bloem is specialist in regional maritime partnerships, and was co-founder of the Drecht Cities Campaign. His explanation of the new trend is simple: “International competition is getting stronger and stronger. Not only at company level but also between governments. Maritime companies create jobs and welfare, with a large economic impact. In this context, governments do not want to sit on their hands.”
Typical subjects of regional policy are economic promotion and acquisition, Small and Medium sized Companies (SME) policy, education and technology, and creating a favorable business climate in general. Active politicians with heart for the industry often initiate regional policy. While governments with strong support of industry carry out first investments.
Marstrat is able to set up local or regional maritime initiatives in Europe or beyond. Bloem: “We can take it from a first idea, through campaign set up, to the physical program management. If more regions join, at the end of the day we would create a true, flourishing maritime economy of regions.”
Turkey; where east meets west, where ancient meets modern, but also where maritime recovery meets continued struggle for the countries shipyard industry.
Shipping is a global industry. Turkish shipowners are benefitting from the gradual improvement in some (but definitely not all!) main shipping sectors but the shipbuilding industry is still lagging behind.
Turkey is among the top-ten shipbuilding nations. The Turkish shipbuilding industry is strategically important for Turkey because of the contribution it makes to the national economy. In addition, as one of the country’s core industries, it has a positive effect on deficit reduction efforts by bringing foreign currency into the country and driving employment. The government wants to boost the national export and import volumes to 500 billion USD each by the year 2023.
But the financial crisis that started 10 years ago had a major negative impact on the Turkish shipbuilding industry. And the sector is recovering only very slowly. To overcome the negative consequences of the global economic crisis, the Turkish shipbuilding industry is trying to take measures to tackle the overcapacity problem. In particular, it has begun to economise and merge shipyards. Furthermore, Turkey is leaving the commodity markets and has focus to build specialised types of vessels rather than the standard ship types in response to market demand and trends.
Because, much like other shipbuilding nations, Turkey is lagging behind China, South Korea and Japan in terms of output, especially so with larger ship types such as bulk carriers, tankers and containerships. Turkish shipyards will focus on the construction of smaller-tonnage chemical and oil tankers. In the mega yacht segment, Turkish yards produce an annual volume worth 300 million euros, taking third place globally.
A pro-active approach to operational management
Are you poised to harvest the next upswing? Can you quickly expand capacity? Can you flexibly adjust to shifting geopolitics, changing wages or new technologies? And adjust when the downturn comes? If you said yes to all of these questions, you are truly in control. Wherever the work takes place. Even when you rapidly gear up capacity by outsourcing key operations.
More than ever, being in control means you have your data and processes in order. In such a way that you can rapidly mobilise people and companies to work according to your standards. Wherever they are located. In that case you are really the master of your value chain. You know what is going on continuously. You take rapid decisions and outshine your competitors. Through sound insights obtained from data, harvested through your state-of-the-art ICT systems. If you look hard in the mirror: are you that company? If yes, congratulations! But if you are not quite there yet, can you afford to wait for the sun to fix the roof?
I say: fix the roof now! And incidentally, when you have your data in order, you might as well get more bang for your buck. Do some serious data mining to improve your products and processes. Develop new business by harnessing the power of good data and turn it into a valuable asset for your customers. That way you are not only superior in how you do things, you also provide surpassing value to your customers.
Maritime consultancy Marstrat B.V. and Netherlands Maritime Technology in collaboration with research partner Kasetsart University, have recently delivered a market study to highlight opportunities for Dutch companies in the Thai maritime market.
The Netherlands has an active trading relationship with Thailand and in terms of the maritime sector there is a long history. Today a number of Dutch players are active in the field of equipment supply, vessel construction and maritime services. Given the favourable economic outlook in the region and major government incentives focused on infrastructure improvements, the requirement for modernising the shipbuilding sector is high, although maritime policies and governance could hamper this.
The report gives an overview of sectors such as ports, shipping, offshore, the navy, fisheries, yachting, cruises and ferries. Emphasis is on the shipbuilding and repair industry, whilst the report covers local policies, regulations and institutes influencing the sector.
There is momentum to develop the shipbuilding sector as part of large infrastructure investments in the Eastern Economic Corridor and Chao Praya River as well as other maritime hubs. In particular in respect of specialised vessels as well as ports, delta technology and logistics. Expected requirements are in (eco) design, supervision and supply of equipment as well as support in developing maritime policies and education.
The present situation of the shipbuilding sector compels a further reflection of the way of cooperating especially in the Netherlands. Some time ago our partner Harry Doze has been looking closely at the way the Norwegian maritime sector is structured.
Main question: What makes the Norwegian maritime companies so successful?
A few findings were remarkable and are in contradiction with the Dutch way of operating.
Live and let live
First of all, in Norway local maritime area’s are working closely together; their motto “live and let live”. It is obvious that local area’s like Bergen, Stavanger and Kristiansand see the necessity to uphold the maritime business in their area and are prepared, as a local community, to invest in it. Companies within these local area’s support each other and make sure that their employment and knowledge is kept and strengthened. Outsourcing is limited and only acceptable as long as their own area are not affected.
Strong owners community
Secondly a strong owners community, supported by a wide range of financing possibilities, drag along shipyards and suppliers. Norwegian technical innovations are supported by a solid financial system. Maker lists are predominated by Norwegian suppliers. This is the basis for a strong continuation of the maritime sector.
Financing and export (promotion)
Thirdly, in close cooperation with established financial centres in Oslo, financing and export (promotion) are important instruments for the maritime sector. The public sector as well as strategic alliances between public sector and the business community are the basis for a strong worldwide status. All Norwegian maritime exporters benefit from this strong support.
Since the 90’s of last century discussion about integral cooperation within the Dutch maritime sector are conducted. Integral cooperation expects cultivation of sincerity, trust, mutual respect, understanding and support. In fact, the Dutch are still discussing integral cooperation within the maritime sector, the Norwegians already put it into practice.
One last remark has to be made. As the Norwegians maritime sector is depending on oil and gas, the recent situation in Norway is difficult and might require a restructuring. However the initial cooperation model is one of the best in the world.