French Study Says European Shipyards need to Consolidate

By MarEx 2012-12-18 15:34:00

The French report found that South Korea, Japan, and China have, over the past 15 years, managed to capture 85 percent of the commercial shipbuilding market, leaving Europe with just 5 percent. The world's shipbuilding leader today is South Korea, which has 40 percent of the market, followed by Japan at 32.4 percent and China at 13.4 percent.

European builders are no longer competitive in the construction of oil tankers and container ships due to labor costs and have become specialized builders of ferries, cruise ships, and methane carriers.

The report says that France should lead the way by consolidating the state-owned Direction des Constructions Navales (DCN) and the electronic and defense group Thales. It said the French government, which owns all of DCN and 32.4 percent of Thales, should promote a constructive partnership between the two groups.

Such a step would put an end to the "fratricidal war" between Thales and DCN, and other French companies. The report acknowledged that balancing the needs of civilian and military shipbuilding is an issue that remains to be resolved.

However, the report adds, "If the Airbus group is active in both civilian and military domains, why shouldn't the shipbuilding sector adopt the same model?"