1. On the Shipbuilding Market EESC Hearing/Turku
Eero Mäkinen
Turku, Finland

2. World
Europe
Finland
Finland
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3. Asian Industry on a Roll
Source : Clarkson
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4. Source : Cesa
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5. Merchant fleet growing faster
The world fleet is growing three times as fast as the average
Source : Clarkson
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6. 2006 forecast on current trends
Orders for New Ships
2006 forecast on current trends
Source : Clarkson
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7. Quarterly Evolution of World Orderbook by Shipbuilding Area since 1999
50 000
1Q 1999
2Q 1999
3Q 1999
4Q 1999
1Q 2000
2Q 2000
3Q 2000
4Q 2000
1Q 2001
2Q 2001
3Q 2001
4Q 2001
1Q 2002
2Q 2002
3Q 2002
4Q 2002
1Q 2003
2Q 2003
3Q 2003
4Q 2003
1Q 2004
2Q 2004
3Q 2004
4Q 2004
1Q 2005
2Q 2005
3Q 2005
4Q 2005
1Q 2006
2Q 2006
3Q 2006
Rest of the World
East. Europe
West. Europe
China
Japan
S. Korea
(m. gt)
4,6%
4,1%
5,9%
21,3%
27,7%
36,4%
Source: BRS
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8. Development in the last decade
Source : Clarkson
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9. Record Investment
Across all vessel types there was a record estimated investment of $104.9 billion in 2005 (first time shipbuilding investment has hit $100 billion!).
Already $100.9 billion invested in first nine months of 2006 including $35.1 billion of tankers.
This is 28% ahead of 2005 levels and is putting us on course for yet another year of record investment.
Source : Clarkson
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10. World orderbook
Source : Cesa
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11. Newbuilding Requirement Forecast vs Capacity Evaluation (SAJ)
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Source :Jecku 2006, Japanese delegation
29-Nov-18

12. Cost Pressures on Shipyards
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13. Preferred for Innovation

14. Medium Term Forecast Deliveries “repeat” the contracting cycle:
Strongly increasing trend.
Peak in 2007 and 08.
Decline in 2009
Sharp decline in 2010
Low-point in 2011
Declines:
No. of ships: 25-37%
CGT: 30-40%
Historical CGT-declines:
: 40%
: 50%
Source : Clarkson
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15. Some conclusions
Despite increasing shipyard capacity worldwide activity in the newbuilding market remains extremely strong.
Demand across all ship types remains robust and shipyard berths for 2009 delivery are now scarce.
This continuing strong demand, coupled with tight yard capacity, has led to new increases in shipbuilding prices during 2006 which are now back at, or in excess, of record highs.
Underlying shipyard costs (steel prices, labour costs, exchange rates) are also high, contributing to high ship prices.
In the short term the market looks strong and we expect prices to stay high for the next few months. However, potential over-capacity is still an issue and yards will have to market 2010 berths carefully if they are to maintain these price levels.
Source : Clarkson
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16. Europe

17. Development of Shipbuilding long term market shares
World Shipbuilding output
by countries (%GT)
Europes’ share relatively larger when comparing compensated gross tonnage (cgt)
2001: South Korea 30%, Japan 32%, Europe 25.2%, China 6.8%, Others 6%
2001: CGT
100
100 80 80 60 60
market share % 40 40 20 20
1925
1930
1935
1940
1945
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
UNITED KINGDOM
OTHER WESTERN EUROPE
year
USA
JAPAN
SOUTH KOREA
PEOPLES REP. OF CHINA
OTHERS
Source: Lloyd's Register, MTT /HSZ
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18. Overview
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19. 2005 performance
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20. Orderbook
Source : Cesa
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21. Deliveries
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22. New orders
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23. Overview
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24. Maintenance, Repair and Conversion Turnover 2005
Source : Cesa
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25. Finland

26. Product history from the 2nd World War (60 years)
In the beginning domestic customers; shipowners and government
From the fifties icebreakers, domestic and later export
50 – 90 deliveries to the Soviet Union
From the sixties: ferries, domestic, later (North) Europe
From the seventies: cruise vessels, global market
Other specialized vessels, occasionally
Today, only one major shipbuilding company:
Cruise ships, global market; strong position
Ferries, European market, strong position
Arctic products/technology, smallish units
Domestic market, small units, mostly government
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27. Deliveries of Finnish shipyards
Lähde: Meriteollisuusyhdistys ry / Association of Finnish Marine Industriesm:\tilauskanta\rseti01af.ppt RSe
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28. Manhour Cost €/h 30
27,8
26,8
25,5
24,7 25
23,7
19,6 20
16,7 15
€/h 10
7,8
5,9 5
2,4
ITALY
SPAIN
GERMANY
DENMARK
FRANCE
FINLAND
CROATIA
POLAND
ROMANIA
NETHERLANDS
Source: University of Bremen - iaw
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29. compensated gross tonnage
Cruise vessels (fleet growth 6%) Deliveries
CRUISE VESSELS
1995
2000
2005
2010
2015
compensated gross tonnage
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
10,0
%-share
cgt
share
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30. Cruise Vessels, Annual Deliveries (in number of ships)
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31. Cruise Vessels, Annual Deliveries (by GT)
403986
627926
507131
633392
178400
247600
381100
354300
300951
108865
300985
294595
407489
193292
309679
428239
334700
76152
181830
182340
90090
92400
185400
160900
185700
231750
78309
80439
52649
43188
41500
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Gross Tonnage
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32. Ro-pax vessels with Loa > 100 m compensated gross tonnage
ROPAX/Ferries (medium and large size only) Deliveries
Ro-pax vessels with Loa > 100 m
10,0
9,0
8,0
7,0
compensated gross tonnage
6,0
share-%
cgt
5,0
share
4,0
3,0
2,0
1,0 -
0,0
1995
2000
2005
2010
2015
year
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33. Thank you for your attention
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