MSC Cruises and Palumbo Form JV to Upgrade and Operate Malta Shipyard
MSC Cruises and Palumbo Group have formed a joint venture to own and operate the Palumbo Malta Shipyard. The joint venture plans a major upgrade to the shipyard’s operations, including developing a specialization in cruise ship repairs as well as continuing to service cargo ships, ferries, and offshore ships.
Under the terms of the joint venture agreement, MSC Cruises took a 50 percent ownership stake in the shipyard and becomes an equal partner with the current owner, the Palumbo Shipyards. MSC is committing to use the yard as its primary service facility in the Mediterranean for its cruise ships and will also use the yard for its cargo ships and ferries. Other customers will also continue to have access to the shipyard for repairs.
Acquired ten years ago by the Palumbo Group, the shipyard located in Malta’s harbor currently provides refit, repair, maintenance, and conversion services to a broad range of vessels. It has four dry docks ranging from 98 to 360 meters in length.
“This agreement is not just a financial transaction but is aimed at strengthening our network and is part of a group corporate strategy,” said Antonio Palumbo, the founder and Chairman of Palumbo Group. “I am sure that the future will prove us right, leading this shipyard to consolidate itself as one of the most important multi-purpose structures in the markets of cruise, merchant and advanced-technology ships, providing refitting services, general maintenance, and installation of eco-friendly systems.”
One of the services that they anticipate adding to the shipyard is technology to allow servicing and repair of the next generation of liquefied natural gas (LNG)-powered cruise ships. Construction recently began at the Chantiers de l’Atlantique shipyard in Saint-Nazaire, France on MSC Cruises’ first LNG-powered cruise ship. The 200,000-plus gross ton ship, the MSC World Europa, is scheduled to enter service in 2022. MSC Cruises also has ordered two additional LNG-powered cruise ships from Chantiers de l’Atlantique. AIDA and Costa Cruises each currently each have one LNG-powered cruise ship in service with two more on order. In addition, Carnival Corporation also has two LNG-powered ships under construction that will operate in North America for Carnival Cruise Line and P&O Cruises is expected to take delivery on the Iona, a LNG-powered cruise ship built by Meyer Werft.
The effort to develop the cruise ship specialization will put the shipyard in competition with the Navantia Cadiz shipyard which also developed a specialization in cruise ship repairs as well as large scale cruise ship renovations. Cruise ships have also used a range of drydocks, mostly in France and the Netherlands, for maintenance and repairs in Europe. Other shipyards in North America and Asia also developed specializations in cruise ship maintenance and overhauls.
This transaction will not be the first time that a cruise line has invested in a shipyard. Carnival Corporation and Royal Caribbean Group each hold a stake in the Grand Bahama Shipyard which was developed as a cruise ship repair yard close to the cruise industry’s Florida homeports. Grand Bahama was successful in replacing several American shipyards that had provided services to some of the early cruise ships. Genting also developed the MV Werften shipyard in Germany to build its cruise ships and recently both Hurtigruten and the group building the Ritz-Carlton branded cruise ship provided financial support to the shipyards building their ships.