German suppliers stand firm after strong growth

Alexander Nuernberg, Chairman of the Marine and Offshore Equipment Industries division of the German Engineering Federation (VDMA) said in Hamburg that Germany, still the world’s leading country for marine equipment, was now expecting consolidation and was “bracing itself to meet a drop in demand” in 2014 after orders rose 11.2% in 2013. He noted the number of ships ordered worldwide in Q1 of 2014 had dropped 12% to 485 although size had increased. Prices had dropped 40%, he noted.

The overall “gratifying order situation” however meant workforces could be maintained and productivity increased”, Dr Nuernberg said, meaning firms could finance their technical edge with R&D while withstanding “enormous pressure on prices”.

He said the VDMA did not expect to see a continuation of the ship newbuilding boom in 2014. However customers were seeking ever more system expertise and solution proposals during the development phase and “that continues to represent our chance … vis-à-vis the international competition,” Dr Nuernberg stressed.

As global competition intensifies, German suppliers offering custom-fit solutions for retrofitting – such as making ships more energy-efficient or adapting them to meet new emissions legislation – had the advantage, Dr Nuernberg said. Companies can also be more competitive by providing smart service solutions that directly helped operators reduce operating costs.

Exports accounted for 72% of sales worth €11.7 billion last year but the VDMA said actual exports were much higher because many German suppliers cooperated to integrate components into overall systems for worldwide delivery to shipbuilders.

Asia attracted 46% of orders in 2013, other European countries 31%. China was the largest foreign market with 25% of orders, followed by Korea with 14%.