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Turkey to become international shipbuilding base

With the expansion of the global economic crisis — the epicenter of which is in the United States — to the rest of the world, primarily EU countries, Turkey has gotten its share of the crisis as well.
The shipbuilding sector has been affected most by this crisis, as it was in the rest of the world. The measures taken by our government, with the collective synergy created by the cooperation of the sector and the Chamber of Shipping (DTO), the shipbuilding sector has managed to transform this crisis into an opportunity. Since the sector, which gained significant experience from previous crises, continued on and carried out significant work during this crisis as well, it overcame its shortcomings in institutionalization and human resources.

There have been important developments in the Turkish shipbuilding sector in recent years, and the sector has proved its ability in the international arena in many areas. The Turkish shipbuilding industry now has 160 shipyards, up from 40, and has managed to become well known throughout the world, especially in the construction of chemical tankers and container ships.

Of course, the global economic crisis had the greatest impact on the shipbuilding industry. It is a fact that turning earnings into investment, order cancellations and postponements put the sector in a difficult position. Our shipbuilding industry managed to survive with the work it carried out in unity and solidarity, accelerating the training of personnel and eliminating a major shortcoming. While on the one hand our shipyards focused on maintenance and repair, they also focused on new orders and international marketing activities.

When global economic crisis ravaged the world, Turkey’s economy proved its strength. While Europe still has financial problems, public finance in Turkey is stable and there have been no problems in the banks. The current deficit risk arising from investments in the private sector is manageable, and the situation allows Turkey, as a nation with stable basic economic indicators, to overshadow European countries’ economies. Thus, I observe that global investors will continue to invest in Turkey. I believe that the Turkish economy is on a positive course for the coming period.

My faith that the economy will be on a positive course is supported by the real indicators of the economists. According to figures announced by the Turkish Statistics Institute (TurkStat), the Turkish economy grew by 5.5 percent in the third quarter of 2010. The Turkish economy, which contracted by 4.7 percent in 2009, demonstrated successful growth in three consecutive quarters, with 11.8 percent growth in the first quarter of 2010, 10.2 percent growth in the second and 5.5 percent in the third. These indicators show that there is no problem in the upcoming period. The good news on growth will also have a positive influence on the shipbuilding sector. Some of the projects on the agenda in the forthcoming period will significantly relieve the shipbuilding industry. Although it was our shipbuilding industry that was most affected by the crisis, it will be our shipbuilding industry that will overcome the crisis most strongly.

Thanks to the Organized Industrial Zone (OSB) to be established in Yalova’s Çiftlikköy district, many international investors have held intensive negotiations in order to make investments. In addition, the construction of the domestic fleet and the ships required by Turkey’s Undersecretariat of the Defense Industry (SSM), along with public service ships and the reconstruction of the coaster fleet are important projects for Turkish shipyards.

Let’s examine each item. First of all, thanks to the SSM project MilGem, ships required by naval forces are built in Turkish shipyards. In fact, orders for these ships have even been received from NATO countries. In addition, Landing Platform Docks (LPD) are constructed in Turkish shipyards. If we consider that only seven or eight countries have these kinds of ships in their navy, we can better understand the success of Turkish shipyards. The ferries employed by the İstanbul Ferry Lines (İDO) are also manufactured here. The shipyards which export diving support vessel overseas are now starting to produce steel components for bridges. From the immersion tube parts for the Marmaray to road construction equipment, a large amount of heavy industrial structures are being produced here. Special tugboats for the General Directorate of Coastal Safety are constructed in Turkey, and we have reached the end of the coaster project consisting of 80 vessels, which was rapidly being carried out with cooperation between the sector and the DTO. As for mega yachts, we rank third in the world with proven and indisputable quality. When we consider the passenger boats, the use of shipyards for the construction of heavy industrial facilities and the quality and geographic position of the shipbuilding industry, Turkey has big potential.

Our government is acting very sensitively on the issue. In particular, the recent initiation of the Credit Guarantee Fund, the investment tax credits for incentive certificates and elimination of problems regarding penalties applied to VAT exceptions cleared the way for our sector. Of course, the restructuring of outstanding debts, such as Social Security Authority (SSK) and tax liabilities, has accelerated our sector. We rank third in ship repair and maintenance, following Bulgaria and Romania. Despite the crisis in the shipbuilding industry, we still maintain our rank thanks to the developments I mentioned. Our shipyards have overcome the crisis with the orders they have received for various types of ships, such as those built for the defense industry and other business opportunities.

In light of the above explanations, we can suggest that we overcame the crisis in the US, whose impacts later expanded to other parts of the world, enveloping the shipbuilding and boat manufacturing sector. I firmly believe that with a collective synergy, Turkey will be become a shipbuilding base. Even though the financial crisis in the world caused a decrease in new ship orders, it is estimated that the shipbuilding orders will begin to increase starting in 2013 and that this increase will continue in the following years. Due to the fact that the customers and ships of East Asian shipyards are different from those of our country, our shipyards will not return to the conditions of 2000 and the years prior to it. On the other hand, Turkey has achieved an important status in the field of ship recycling with environmentally sensitive facilities. Thanks to our position, significant operations have continued in maintenance and repair, too. In short, the bad days are behind us in the shipbuilding industry. Together we have managed to bring our ships to safe waters. May your bow be clear and wind be easy.

 By Cengiz Kaptanoğlu, a former lawmaker and presently serves as president of the assembly of the İstanbul-based Chamber of Shipping.

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Posted by on Mar 3 2011 Filed under Headlines, Navy, Turkish Defense News, Turkish Economy News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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