Turkish Shipbuilding Output Declines Despite Global Order Boom

 

As China and South Korea celebrate continued dominance in global shipping, Turkey has recorded a decline for another consecutive year in a sector that was once lucrative for the country. Recent data from the Turkish Exporters Assembly (TIM) indicate that shipyard exports in the first quarter decreased by 27.5 percent to $328 million.In March alone, the exports plunged 40 percent to $86 million compared to the same period last year. As a result, shipbuilding was the worst performing industrial export sector in the first quarter.

The decline has been attributed to rising operational costs and difficulties in accessing financing. According to the data, production costs have reached almost the same levels as Norway, which is a key export market for ships built in Turkey. This has seen major Turkish shipyards invest abroad, reportedly to counter declining market conditions back home.

In 2023, Tersan Shipyard, a leading shipbuilding company based in Altinova, Turkey, acquired Havyard Leirvik Shipyard in Norway. Tersan said that acquisition is part of its strategy to strengthen its position in Northern Europe and in the global shipbuilding market. During the same year, another Turkish shipbuilding company - Hicri Ercili - acquired Norden Shipyard in Netherlands.

“Decrease in new orders continue to persist, and we foresee a contraction of over 15 percent in the sector’s exports by the end of the year. The weakening of the Turkish currency has also added new problems to the sector, causing a surge in foreign currency loan interest rates,” chairman of the Ship, Yacht and Services Exporters’ Association (GYHIB) Cem Seven told Ekonomim news.

Lost employment is also now a major concern. The data shows that across over 80 active shipyards in Turkey, employment fell nearly 10 percent in the last seven months. The last time the Turkish shipbuilding sector posted a positive outlook was in 2023, with exports rising 33 percent to $1.94 billion. During that year, the sector surpassed China in tugboat manufacturing and held a global lead in fishing boat construction.