German Equipment Makers Sustain Business Growth

The 7.8% uplift in orders attracted over the course of 2022 followed the 14% surge in transactions recorded for 2021. Turnover grew by 3.9% to EUR10.7bn ($12bn) in 2022 from the previous year’s EUR10.3bn ($11.5bn at current rates), which had represented a 2% weakening relative to 2020. The industry consolidated its pre-eminent position as a supplier to the world market and as an important source of German foreign earnings by way of an 80% export ratio.

Martin Johannsmann, chairman of VDMA Marine Equipment and Systems and managing director of bearings specialist SKF Marine, acknowledged that persistent inflation, supply chain problems for certain electronic products and geopolitical crises had continued to impact companies, but that the business situation as a whole had improved appreciably compared to 2021.

The focus by shipowners and operators on adopting strategies aimed at realising climate-neutral goals reflects not only in newbuild construction activity, but equally so in the modernisation and upgrading of existing vessels.

The broad spread of technically challenging projects is testament to the structure and diversity of the industry, encompassing both large and small manufacturers, and its propensity for cooperation with research institutes to develop innovative products and components to meet clients’ evolving needs. Moreover, sustainability and through-life support are factors that now permeate the business approach.

“Efficiency and environmental protection is achieved by the industry in many areas, for example in the avoidance of marine pollution through new types of sealing elements or in the exploitation of the reconditioning of lubricants,” said Mr Johannsmann. “At the same time, we are using the rapidly growing possibilities of digitalisation. Overall, we see a continuous innovation progress for the next five to 10 years, especially due to the international regulations on maritime sustainability,” he added.

Pertinent in this context are the VDMA’s endeavours to standardise the interfaces between the products of different manufacturers on ships, given the increasing complexity of vessels, differing transfer protocols and data formats, the time implications of commissioning and integrating sophisticated command systems, and susceptibility for errors. The Association’s work is reflected in its standard sheet on Module Type Package (MTP) methodology, which optimises shipbuilding production processes and interoperability.

The past year has reaffirmed the sector’s considerable standing in the global market, supplying shipyards and offshore firms, shipowners, other equipment makers and traders, to the extent that it retains an export factor of 80%. Beyond the 20% of products absorbed by German shipbuilders, fabricators, and other domestic firms, the rest of Europe continued to account for 35% of the export tally. The North American market for German products has grown significantly, while VDMA reported that China and South Korea “ordered more cautiously”.

Employment among suppliers rose by 1.6% last year to 64,000, in about 400 companies, although the shortage of skilled labour in mechanical engineering and other fields has aroused concern. To meet the solid growth in business demand, fundamental importance is attached to promoting the recruitment of young people and to ensuring both the passing on of the skills of a generation now entering or approaching retirement as well as to ensuring the expansion of know-how.