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Kvaerner, Daewoo Calling It Quits In Shipbuilding Businesses With alarming — if not admirable — expediency, in April two of the world's premier shipbuilders decided to pull out of the shipbuilding market. April 1999, in years to come, could prove to be a watershed in the ship- building business. While shipbuilders around the globe have openly and loud- ly complained about stagnate pricing and too much capacity, two of the world's biggest players — faced with mounting financial crises on the corpo- rate scale — decided to completely pull out of the business of building ships. Meanwhile, General Dynamics bid to become the dominant shipbilding force in the U.S. via the acquisition of New- port News Shipbuilding lacked the nec- essary political and defense department backing, and thus fell to the wayside less than a month after the billion plus dollar deal caused chins to collectively drop. Skeptics, however, panned the deal from the start, noting that placing 75 percent of U.S. Navy shipbuilding business in one company's coffers was a long-shot at best. The decision by Kvaerner ASA and Daewoo to sell off their shipbuilding assets is ironic, indeed, considering that the two companies were central figures in the above-mentioned controversy of piling on additional commercial ship- building capacity in the face of low ship prices. Subsidies, politics and industry in-fighting aside, though, the decision by both companies largely took the mar- ket by surprise, and could effectively help to shift the balance of shipbuilding power for years to come. For instance, Daewoo was (at press time) in discussions to sell its shipbuild- ing business to Japan's Mitsui. With Japan and Korea jockeying for ship- building supremacy for the past half decade, the sale to Mitsui or another Japanese yard would clearly shift the balance of power to Japan In Kvaerner's case, the divesture of shipbuilding assets will more than likely not be as clear and easy, as its holdings encompass more than a dozen yards in four countries. At press time, the com- pany — which saw its shipbuilding operation profits plummet from $95.8 million in 1997 to $12.4 million in 1998 — was considering several options, including company spin-offs to share- holders, joint ventures and an outright sale. The picture is also murky for the company's Philadelphia project, which May, 1999 is well underway but not yet complete. An immediate reaction to the news has been from a niche, yet high value mar- ket of the sector, cruise ship owners and operators. As Kvaerner's Finland facili- ties in Turku and Helsinki are undoubt- edly two of the top cruise shipbuilding yards in the world, their "for sale" sta- tus, coupled with brimming orderbooks at the other major European cruise ship- building yards in Germany, France and Italy have shipowners eyeing Far East yards for new cruise tonnage, a develop- ment that was imminent but until recent- ly still seen as far off. MARINE REFRIGERATION HTEKNOTHERM i^H MARINE AND INDUSTRIAL REFRIGERATION More than 60 years of experience as a supplier of refrigeration systems to the marine industry. Custom built refrigeration plants and equipment for: • Reefers • Air conditioning • Provision storage • Chemical tankers • Inert-gas drying • C02 storage • RSW-systems • Fish processing systems ENGINEERING—PRODUCTION—SERVICE SPARE PARTS Teknotherm A/S, PO Box 87, N-1751 Halden, Norway Phone +47 69 19 52 81. Fax +47 69 19 52 89 Circle 306 on Reader Service Card WEATHERTIGHT GRP - ask us about it Quality standard EN ISO 9002 implemented. DnV approved. LIBRA DOORS LIBRA-PLAST AS N-6060 Hareid, Norway Tel.+47 70 09 54 00 - Fax+47 70 09 54 01 E-mail: office@libra.no Internet: www.libra.no Circle 263 on Reader Service Card Visit our website or call for a catalog today for all the latest details & pricing on these and other timely safety videos including full library for inland, offshore and fishing industries. This may be the best safety investment you make! www.monmouth.com/~walportusa wire WALPORT USA "We Entertain and Train your crews." 2400 Morris Ave. (2nd Floor) • Union, New Jersey 07083 Tel: 908-686-9155 • Fax: 908-686-9755 email: walportusa@monmouth.com Top quality steering • Maximum manoeuvrability A. van der Velden bv/ A. van der Velden B.V., P.O. Box 2061 2930 AB Krimpen a/d Lek The Netherlands Tel.: +31(0)180 511577 Fax: +31(0)180 511578 E-mail: 100417.654@compuserve.com Internet: www.vdvelden.nl Rotterdam Agent for the U.S.A. Ships Machinery International Inc. 8357 N.W. 56 Street Miami FL 33166 USA Tel.: (+1) 305 592 7350 Fax: (+1)305 5918223 E-mail: info@shipmachinery.com Internet: www.shipmachinery.com Circle 313 on Reader Service Card Circle 201 on Reader Service Card 41
