Tuzla shipyards a graveyard of unfinished newbuildings

The government is rumoured to be preparing a new stimulus package for the shipbuilding sector, but shipyard owners have lost hope and laid off workers are desperate. The stimulus rumours were fueled by Economy Minister Ali Babacan’s surprise visit to Tuzla last week.

Tuzla’s name as a shipbuilding hub was heard more frequently starting from 2005. Between 2005 and 2008, global shipbuilding expanded 89 percent while the sector grew a record 360 percent in Turkey. In the same period, Turkey advanced from 23rd to eighth in production capacity, rising to be fifth in orders.

But high-budget orders have also started stalling production. Through subcontracting, workplace safety slipped down as a priority and fatal accidents snowballed. Between 1992 and 2009, some 131 workers died as the shipyards lost prestige in the public’s eye.

Insult to injury came from the global crisis. In the past 15 months, orders for 200 ships were cancelled amounting to a loss of $2 billion. The number of workers retreated to 8,000 from 38,000. Nearly all subcontracted workers were fired and 60 percent of regular staff was laid off.

In the meantime, China and South Korea’s industries were standing firmly on their feet with state support. China’s shipbuilding sector grew 47 percent on an annual basis last year. Now half of the 46 shipyards at Tuzla are inoperative while the rest engage in repair and maintenance.

Before the crisis Turkey was the world’s fifth in orders but now it ranks 10th. Next year will be much worse according to an industry spokesman who said deliveries scheduled for this year number 120 and 23 for next year provided there are no cancellations. Last year, global orders amounted to 33 million tonnes of which Turkey was able to get less than 150,000 tonnes.

Repair and maintenance activities should have been “insurance for the crisis” for Tuzla shipyards, but due to infrastructure problems the opportunity was lost, according to Muhsin Divan, vice chairman of Desan Shipyard. “Many entrepreneurs cancelled orders due to the crisis,” he said. “Those being built were left half-finished as financial means eroded. Tuzla has become a graveyard of half-built ships.”