Strain On Damen’s Romanian Links

Damen Shipyards Mangalia formally came into being during November 2018 after Daewoo Shipbuilding & Marine Engineering (DSME) sold its 51% majority holding in the then Daewoo Mangalia Heavy Industries to the Dutch group. The transaction was approved by the Romanian state on condition that Damen transferred 2% of its 51% stake to the Romanian government, which already owned 49% of the yard.

At the same time, a joint venture was signed that guaranteed Damen full control over the shipyard, notwithstanding its minority(49%) interest. This arrangement was facilitated by the government granting an exception to Damen Shipyards Mangalia on the legislation relating to the corporate governance of state-owned enterprises.

However, through the recently-adopted Law 187/2023, which scraps this exception, Damen’s control of the activities at Mangalia has been brought to an end and passed to the Romanian government, such that Damen’s involvement is now limited to a minority shareholding.

Although Damen has raised the matter with various Romanian state bodies, including the government, the group said that it has had no response to this approach nor to the formal notice of breach of contract submitted to the Romanian State on July 5. As a consequence, it has terminated the joint venture agreement.

Mangalia’s integration into Damen’s global organisation opened up new possibilities for the group in the construction and conversion both of larger ships and more complex vessels. It has invested heavily in the yard in terms of financing, knowledge transfer and project development.

Located on the country’s Black Sea coast, and vested with three dry docks ranging in size from 302m x 48m to 360m x 60m, the shipyard currently has some 1,500 employees occupied on an orderbook featuring infrastructure and vessels for the offshore wind sector and other specialised tonnage.

Originally known as 2 Mai Mangalia Shipyard, newbuild production began in 1976. When Romania changed into a market economy, Daewoo gained control of the complex in 1997 through a joint undertaking with the Romanian government, and the enterprise was renamed Daewoo Mangalia Heavy Industries. The facilities were expanded and the focus was switched to large merchant ships, leading to a prolific output over the ensuing 20 years.

In July 2018, after a long negotiation process, Damen finally completed acquisition of the DSME shareholding. As Damen Mangalia, the initial delivery was a 177m diamond recovery ship for Debmarine Namibia.

Damen’s first venture in Romania was Damen Shipyards Galati, dating from 1999. Situated in the east of the country, on the banks of the River Danube 230km north of Mangalia, Galati is fully owned and operated by Damen and constructs a wide variety of specialised and higher added-value tonnage.