VDMA – Marine and Offshore Equipment Industries

The MARINE AND OFFSHORE EQUIPMENT INDUSTRIES, founded in 1973 and based in Hamburg, is a special division of the non-profit organization German Engineering Federation (VDMA e.V.)

This special division of VDMA has about 200 member companies, mainly small and medium-sized, from industrial branches like mechanical engineering, electrical and electronic industry.

The services offered are:

  • to support customers in arranging contacts with efficient German marine and offshore equipment manufacturers
  • to intensify mutual co-operation with shipyards and shipping companies in technological as well as commercial fields
  • to foster the free market principles in the world market by means of close contacts with various international organizations on the one hand and on the other hand with the assistance of the national government
  • to enforce the technical harmonization through international standardization
  • to sponsor important international exhibitions and to execute active support.

Marine and offshore equipment suppliers investing in the future while the boom is on - make the most of opportunities – improve conditions for business

«We’re consistently using our full order books to sharpen our international competitive edge,» commented Dr. Alexander Nrnberg, chairman of German Engineering Federation (VDMA) – Marine and Offshore Equipment Industries, when describing the current situation of the sector at the association’s annual press conference held in Hamburg.

Global shipbuilding production will probably continue at a very high level in the next two to three years. «But conditions as in the Bible prevail in the cyclical shipbuilding sector: fat years are also regularly followed by lean ones! We want to focus on preparing ourselves for these now and invest a high proportion of our profits in the future,» explained Nrnberg, referring to the extensive innovation activities of the mainly small or medium-sized equipment suppliers. According to Nrnberg, 80% of companies expect to see further growth in incoming orders from abroad in 2005, with about 60% also expecting more business from domestic customers – for both containerships and special-purpose vessels.

Nrnberg noted that this very gratifying situation is overshadowed by adverse parameters confronting suppliers: «The increasingly fierce competition, particularly from Asia and other non-EU countries, the general dollar/euro exchange rate problem, delivery and cost problems for high-quality materials, price reductions particularly for increased series shipbuilding, short delivery deadlines and many other factors don't make it easy for us to maintain our currently high capacity utilization in the long term and improve our profitability for future investment,» the association chairman commented.

Innovations in products, components and systems as well as services are the order of the day. Globally oriented service in particular is becoming an increasingly vital factor in the marketplace, explained Nrnberg, who regretted the continuing shortage of experts for design and service.

Suppliers staying successful in foreign markets

With their about 70,000 employees, German marine equipment suppliers registered sales of approx. 8,7 billion Euro in 2004, achieving average growth of 5,2% compared with the previous year and an export rate of 64%, enabling them to retain their leading role in foreign markets for high-tech systems for shipbuilding.

The dominance of the Asian shipbuilding market continued to be evident in 2004: of the 2,410 ship orders booked worldwide, 633 were accounted for by Japan, 514 by South Korea, 384 by China, 282 by the EU 15 and 358 by the EU 25 countries (including 76 by Germany) and 236 by the rest of Europe.

In 2004, Asia's share of German suppliers' foreign incoming orders was 41%, with China accounting for 23% points, Korea 10 and the rest of Asia 8.

Last year, 30% of suppliers' foreign orders came from other EU countries. Their incoming orders exceeded their sales by 9% – and by as much as 19% in export business.

Supplies of equipment for the offshore oil and gas industry also continued to increase significantly as a result of the strong growth in demand, particularly from China, and high energy prices, which stimulated investment. «In 2004, expenditure by global oil and gas companies surged by 7,5% to approx. $ 160 billion, including about $ 100 billion for the offshore area,» noted Nrnberg, referring to German suppliers' excellent opportunities for significantly increasing their world market share, currently about 3%, in the medium term by offering future-oriented solutions for equipment for deployment in very deep waters.

Suppliers focusing on serving as shipowners' lifecycle partners

«Work for equipment suppliers only really begins when business for the shipyard is over after the delivery and guarantee time of the newbuilding,» said Nrnberg. He explained many suppliers' strategy for accompanying the shipping line during the entire service life of a new vessel as reliable and efficient partners to maintain the cost-efficiency, dependability and technical standard of an expensive, complex and long-lasting transport system on a long-term basis.

Foreign involvement securing markets and local jobs

«Successfully selling marine equipment means being where the customer is, and in this respect our Asian competitors in Korea and China naturally have advantages that we have to offset,» stated Nrnberg, emphasizing that many German marine equipment suppliers are therefore stepping up their involvement in this region. Their aim is not only to safeguard their exports and thus also jobs in Germany by reducing production costs: just as important factors are improving market presence for sales and service, meeting «local content» requirements and monitoring the market and competition. In recent years, marine equipment suppliers’ share of foreign production has been relatively constant, averaging about 16-20%. This has also been thanks to suppliers’ sustained efforts to secure jobs in Germany by boosting productivity and forging ahead with innovations, Nrnberg explained.

Go to Index of # 2(16) 2006


# 2(16), 2006