When we met with Minister Çağlayan, he stressed the importance of value added exports in meeting some of Prime Minister Erdoğan’s 2023 Vision goals, such as reaching $500 billion in exports by 2023. What role do you think the shipbuilding sector is playing in ensuring these ambitious goals are met?
The Turkish shipbuilding industry is strategically important for Turkey in consideration of the contribution it makes and is one of the locomotive industries with a positive effect on current deficit reduction by foreign currency inflow and employment.
Figures of Turkish shipbuilding export peaked in 2008 with $2.8 billion. This figure decreased to $1.1 billion in 2012. We expect that the export volume of the Turkish shipbuilding industry, including repair and maintenance activities, will reach at $2 billion in 2013.
Of the $500 billion target, $10 billion has been allocated for the Turkish shipbuilding industry. When we accomplish the first goal of our industry, which consists of having reference in offshore shipbuilding, $10 billion will be smooth sailing for us.
The Shipbuilders Association was established in 1971 and acts as a representative for the private sector shipbuilders with national and international institutions and organisations. Can you outline how you do this?
Turkish Shipbuilders’ Association (GISBIR) was established in 1971 by the Turkish shipyard owners. Based in Istanbul, Turkish Shipbuilders’ Association is the sole representative body for shipyard owners and looks after the interests of shipyards involved in a range of shipbuilding activities. By working closely alongside industry bodies and by maintaining mutually beneficial links with government, our association can continue to ensure the voice of its membership is heard.
GISBIR has been progressively representing the Turkish shipbuilding industry in national and international areas by bringing mutual problems forward in every platform and contributing to the process for the necessary regulations to be made.
The financial crisis had a major negative impact on the Turkish shipbuilding industry, but now the sector is recovering significantly. What are the goals of the industry? Where do you see opportunities for growth?
In order to overcome the negative impact of the global economic crisis on the Turkish shipbuilding industry, we aim to create solutions that tackle overcapacity by building different types of vessels instead of ordinary types of vessels by taking market demand and course.
At GISBIR, we have been emphasising the importance and necessity of the offshore sector for not only the Turkish shipbuilding industry but also for the Turkish economy.
In consideration of the international maritime news we have been following, we observe that FPSO (floating production storage and offloading), FSO (floating storage and offloading) and PSV (platform supply vessel) orders worth billion dollars are received daily and vessels built in this segment keep being delivered.
Offshore oil production is estimated to reach 27 million barrels from 21 million barrels. Offshore platforms, particularly ultra-deep sea vessel type linked with offshore continues to be the vessel type in great demand.
The first priority for Turkish shipbuilding is to have reference in offshore shipbuilding. It is important to remember that vessels being built in the offshore segment all around the world correspond to 7% of world shipbuilding figures. However, it counts for 26% with regards to endorsement, i.e. one dollar of every four dollars belongs to the offshore market.
What we recommend as GISBIR is an offshore fleet to be formed by the Turkish Petroleum Corporation (TPAO, which was founded in 1954 by Law No. 6327 with the responsibility of being involved in hydrocarbon exploration, drilling, production, refinery and marketing activities as Turkey’s national company) in the guidance of the Turkish Ministry of Energy. In this regard, an offshore corporation can be established modelling PETROBRAS and TRANSPETRO collaboration in Brazil. Turkish shipyards can build platform supply vessels such as FPSO, FSO, jack-up, rig, etc.
A fruitful partnership with worldwide companies having a voice will be required in order to accomplish these projects, and to acquire the know-how.
While Turkey may not have the capacity in terms of output of the Far East, Turkey certainly holds a competitive advantage in adaptable manufacturing and specialised ships. As such, what segments, or types of ships, do you believe to be most promising for Turkey’s shipbuilding industry?
Modern, technologically developed and certified Turkish shipyards can build various types of vessels. We can build oil tankers, chemical tankers, bulk carriers & containers, heavy lifting ships, multipurpose vessels, platform supply vessels, war ships & coast guard boats, tugboats, mega yachts & yachts and fishing boats.
Turkish shipyards have steel processing capacity of 700,000 tons and 4 million deadweight tonnage (dwt) shipbuilding capacity. According to orderbook (dwt) by builder country, Turkey ranks eleventh. According to orderbook (unit) by builder country, Turkey ranks fifth. Turkish shipyards rank number one in small tonnage chemical/oil tanker building (up to 10,000 dwt) and number three in mega yacht building. Turkish mega yacht building, with an annual volume of 300 million euros, ranks third in the world.
The Maltese Falcon, one of the largest and luxury type sailing yachts in the world built by our member shipyard, built entirely in Turkey, is the most visible sign of the current status of the Turkish mega yacht building industry.
Turkish shipyards have 15 million dwt repair and maintenance capacity and undersigned a lot of prestigious conversion, grounding damage and platform repair projects, covering offshore vessel repair and maintenance activities as well.
In February GISBIR will host the SMM conference in Istanbul, which is considered the most prestigious maritime conference of the year. What are you expectations for the conference, especially in regards to coverage or recognition of the Turkish shipbuilding sector?
The Turkish shipbuilding sector is already world-renowned and recognised thanks to its characteristics and references. Turkey has exported different types of vessels to nearly all countries around the world. That is to say, we are not in search of recognition and we will continue promoting the interests of our members and representing the Turkish shipbuilding industry by bringing the national and international representatives up to date with respect to the state-of-the-art of the Turkish shipbuilding sector.
As one of the supporter organisations for SMM 2014 Istanbul, we wish success by means of becoming a terminus a quo for fruitful co-operations in the Turkish shipbuilding industry. Herein I would like to add that the organisers of SMM 2014 Istanbul act as the European Union representatives of GISBIR.
Last but not least, GISBIR is an official supporter for not only SMM 2014, but also for pioneer events such as the Transportation, Maritime Affairs and Communications Forum, Exposhipping Europort Istanbul, Mare Forum, Offshore Energy Conference Turkey and Genoa Shipping Week.
The shipbuilding sector is a trusted partner of the government, particularly with the Ministry of Defence and SSM. How important is their support in the growth of the shipbuilding sector?
Naval and coastal guard projects belonging to the Turkish Ministry of Defence and the Turkish Undersecretariat for Defence Industries (SSM) are another area of expertise of the Turkish shipbuilding industry. There are presently five of our member shipyards awarded naval contracts since 2007 thanks to SSM’s confidence in the Turkish shipbuilding industry.
A new target is to build frigates with our own unique design in line with the force requirements of the Turkish Naval Forces and not to be in need of donations of 30 year-old frigates from foreign fleets.
Turkey relies on a high level of technical expertise to remain the global market leader in terms of quality, can you outline some of this technology and how important is R&D is to keeping this competitive advantage?
Research and Development is a key subject within GISBIR and the Turkish shipbuilding industry. As GISBIR, we establish collaborations with universities in terms of technology. Some recent examples of such collaborations are the foundations of a techno park in Istanbul and a central office of R&D Engineering.
Europe is currently your number one export market, but can you elaborate on the potential of growing these exports even further, especially within Europe?
Turkish shipyards exported the majority of the vessels they had built to European ship owners between 2008 and 2012.
Seven of our member shipyards have been building fishing vessels and offshore support vessels for Norwegian companies. One GISBIR member has recently built the first LPG fuelled tugboat in the world for a Norwegian ship owner. In addition, there are Turkish shipyards, which receive offshore rigs for repair and maintenance work. There are also some Turkish shipyards that build vessels only for Norwegian companies.
Countries such as the Philippines, Vietnam, Romania and Taiwan are our competitors because the shipbuilding industry prefers them due to cheap labour. In terms of capability to build their own vessels, we consider some of the European countries, who carry out shipbuilding activities, as our competitors.
The UK has traditionally been one of the greatest ship building nations in the world, as such do you think there are areas of synergy between Turkish and UK shipbuilders?
The United Kingdom was indeed one of the greatest ship building nations in the world. The status has changed since then. Offshore industry offers a bright future and the UK, especially the city of Aberdeen, comes to the forefront in terms of offshore shipbuilding and the volume they offer.
When Prime Minister David Cameron arrived in Ankara, he was asked “Why Turkey?” and “Why so soon?” He answered: because Turkey is vital for our economy, vital for our security and vital for our politics and our diplomacy.
Turkey is one of the world’s fastest growing economies. A young, energetic and entrepreneurial workforce (over half the population is under 29 years old) is an integral part of the success story. Analysts predict that Turkey will be one of the world’s top ten economies by 2050.
A prospective synergy between Turkish and UK shipbuilders would be preferred in terms of offshore industry. This is because there is a significant potential. As GISBIR, we remark “co-operation is an ocean of opportunities” and co-operations with well proven countries such as the UK in terms of offshore.
The global shipbuilding sector has certainly got much more competitive over the years, with builders in the Far East for example slashing prices, but clearly not delivering on quality aspects. Why do you think UK buyers, and really global buyers, should consider Turkish ships first when looking for shipbuilders?
It is a fact that long-term competitiveness with Far East shipyards, which are granted open or hidden incentives by their government, is impossible. However, by means of quality production, Turkish shipyards are far beyond the Far East shipyards.
The advantages of the Turkish shipbuilding industry are: quality production in EU standards; an experienced and flexible workforce; Istanbul being a shipping centre and major transit hub; 95% of the shipyards being located in the same bay near Istanbul (35 km); one-day trip for European ship owners; favourable climate conditions for shipbuilding; and authorised makers and classification societies such as Lloyd’s Register, Class NK, Bureau Veritas, etc.
Moreover, many listed European companies have fleet agreements with Turkish shipyards and we are global buyers’ preference in terms of oil tankers, chemical tankers, bulk carriers & containers, heavy lifting ships, multipurpose vessels, platform supply vessels, war ships & coast guard boats, tugboats, mega yachts & yachts and fishing boats.
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