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Meyer Turku’s success has positive, growing impact on city, region and country, survey finds

Details: Written by Kari Reinikainen Kari Reinikainen; Category: More News More News; Published: 06 February 2020 06 February 2020

Meyer Turku Oy, the Finnish cruise ship builder, is a very important local operator in the economic area of Turku and in the region of Southwest Finland. The regional impacts of the Turku shipyard extend to the whole country because three quarters of its direct supplier companies are domestic, the city of Turku said in a survey report.

The combined turnover related to the production of the yard and to the production of its direct supplier companies is about €1.9 billion which corresponds to a growth of 46 % compared to the financial statement of the year 2016.

The value of supply orders to the shipyard has grown very strongly. It has almost doubled in two years (+ 84 %). The value of the supply orders was approximately €933 million in 2018 when the corresponding figure in 2016 was approximately €508 million.

The value of domestic supply orders of Meyer Turku increased by 64% to approximately €638 million at the time in question. Correspondingly, the value of foreign supply orders increased by 150% to approximately €295 million.

“Our order books extend for the moment to the year 2025, and the amounts reflect well the growth in our production. We can expect that the growth continues also in the following years, states Deputy Yard Director of Meyer Turku, Tapani Pulli.

Despite the differences in the values of the supply orders, the amount of supplier companies has remained nearly unchanged. In 2018, the shipyard had a total of 1,246 direct supplier companies out of which 927 were domestic and 319 were of foreign origin.

“The direct supplier companies, on the other hand, have their own subcontractor network. The companies which belong to the subcontractor network represent 109 Finnish municipalities which corresponds to one third of all Finnish municipalities. Correspondingly, there are foreign subcontractors around the world,” specified Senior Researcher Tapio Karvonen from Brahea Centre at the University of Turku.

“This means that an increase in the production of the shipyard benefits the companies of all sizes and in different fields despite the territorial boundaries,”

The largest target country of the supply orders was Germany after Finland which made 72% of the value of the foreign supply orders. In domestic supply orders, the focus in the euro-weighted orders was in Southwest Finland (48 %), and specially in the nearby municipality of Kaarina (27 %). In case of domestic supplier companies, there was an even division between Uusimaa and Southwest Finland, each with a 40% slice.

“The strong growth of the proportion of Germany is explained by the fact that we have received FERU (Floating Engine Room Unit) for the cruise ships from the shipyard of Meyer in Rostock. Similarly, the large proportion of Kaarina is mainly explained by the strong growth of the cabin module factory of Piikkio Works,” explained Pulli.

Meyer Turku is the fourth largest employer in Southwest Finland after the City of Turku, the University of Turku and Valmet Automotive, a car assembly plant in the municipality of Uusikapunki. Meyer Turku is the second largest industrial employer.

The activity of the shipyard employs directly about 4,100 persons and indirectly 4,000 employers counted in annual work units. In two years, the annual work units (AWU) increased by 28% in direct employment, and by 54% in indirect employment.

The impact on the general employment is even greater but it was not possible to clarify the impact of foreign companies and secondary suppliers on the employment within the framework of the study. “A good rule of thumb for calculating the effects on the employment of the yard is the production formula where about 20% of one ship’s productions process is done by the shipyard’s own personnel and the remaining 80% by the supplier network,” Karvonen pointed out.

The regional economic impacts of employing own personnel focused 96% in Southwest Finland, and especially in Turku (88 %). As a result, most of the tax revenue effects concentrated in the municipalities in southwestern Finland

However, the biggest amount of corporation tax accrued in Uusimaa, where the Finnish capital Helsinki is located. The effects on employment are in practice almost in the same level with Southwest Finland, and the share of Uusimaa as the economic area of Meyer has increased clearly since the previous research study.

“The yard stimulates the development of the labour market in the positive direction in the Turku region and in the whole country. Strong professional skills, reliability and a special supplier network are strengths which are appreciated even in international contexts,” stated Minna Arve, Mayor of the City of Turku.

As a part of the survey, the supplier network of the yard was asked to specify the skill needs. Responses to the survey question on skill needs were received from 57 companies of different sizes and fields. Two thirds of the companies who responded to the survey has recognised needs in skills which were mostly related to HVAC and electric technology, welding and project management.

Three quarters of the 52 companies who answered to the survey question on labour shortage told that companies need more experts. According to the responses, there is mostly lack of plate-welders, HVAC and electrical designers, project managers and foremen.

“According to the forecasts, the increase in the direct personnel of Meyer Turku continues to grow in the next few years but the increase will get more stable after that. According to the forecasts, the yearly number of recruitments will remain at a high level because of the age structure of the shipyard. Especially the need for highly educated labour will be accentuated in the future. The variation related to the workload of the project work will be stabilized with the network of supplier companies and the amount of personnel in the supplier network is also likely to grow,” Karvonen summarised.

The new degree programme in technology, mechanical and material engineering beginning in autumn 2020 at the University of Turku will respond to the need of specialized personnel in the maritime industry. The own shipbuilding school of the Turku shipyard provides also a fast path to the specialization in the field by offering courses in recruiting training, additional training, complementary training and conversion training as well as individual courses, the survey report concluded.

Meyer Turku and Aalto University sign research partnership agreement

Details: Written by Kari Reinikainen Kari Reinikainen; Category: More News More News; Published: 04 February 2020 04 February 2020

Meyer Turku, the Finnish cruise ship builder, and the Helsinki based Aalto University have signed an agreement intended to develop and strengthen research activities plus teaching on a broad scale on a joint basis, the shipyard said in a statement.

Jan Meyer, CEO, said that the company wants Finland to be world leader in maritime technology and science and therefore the company is constantly looking for talented people. The agreement would provide a natural extension to the good cooperation between the company and the university.

Aalto University’s close cooperation between various disciplines provides a good foundation for innovation and it will bring new kind of competence to the maritime technology sector, said Ilkka Niemela, head of the university.

Marine-X, a new project at the university, would be developed to a new research and cooperation platform for the maritime technology sector, he added.

Helsinki Shipyard says Russian expedition ship project on track

Details: Written by Kari Reinikainen Kari Reinikainen; Category: More News More News; Published: 03 February 2020 03 February 2020

Helsinki Shipyard said that a project to build two 113 metre luxury expedition ships for Vodohod, a Russian company, remains on track.

“Helsinki Shipyard Inc. is currently working on the project of two luxury expedition vessels. The vessels are intended to operate both in the Arctic and Antarctic waters as well as in the tropical waters during the Spring and Autumn seasons. The project moves forward according to the plan and the shipyard already started the purchasing process of the equipment and materials,” the company said in a statement.

Vodohod placed the contract to build the ships with the Finnish yard that had previously been owned by the United Shipbuilding Corporation group of Russia, in July last year. The shipyard was acquired in May be Algador Holdings Ltd, a Cyprus based company controlled by Russian interests.

The two vessels will have a capacity of 157 passengers each and they will have Polar Ice class PC5. They are scheduled to enter service in 2021 and 2022, respectively.

Cruise ship building boom drives Finnish export credits higher

Details: Written by Kari Reinikainen Kari Reinikainen; Category: More News More News; Published: 03 February 2020 03 February 2020

A boom in the cruise ship building industry that is providing lots of work to the shipbuilding cluster in Finland is driving the demand for export credit, according to the country’s export credit agency Finnvera.

The Finnish parliament raised Finnvera’a authorisation to issue export credit guarantees to €38 billion last year from a previous ceiling of €27 billion and export credits to €33 billion from €22 billion.

“The fact that our authorisation to grant export credit guarantees was raised to €38 billion was a very significant development. This figure is extremely high, and it results from the exceptional wave of investments in cruise shipping. The order book extends a long way into the future, and to ensure the completion of these orders together with Finnish shipyards and to serve also other sectors and SMEs at the same time, we need these authorisations,” Finnvera’s CEO Pauli Heikkilä said in a statement.

The wave of investments in cruise shipping could be seen in Finnvera’s export financing In 2019, export financing increased year on year, and Finnvera granted the following financing for large corporates’ export transactions: €5.2 billion (up from €3.0 billion in the previous year) in export credit guarantees and special guarantees and €2.5 billion (€2.2 billion) in export credits.

“The realisation and timing of individual major export transactions have an impact on the amount of financing granted. As a result, the annual variation is typically large. As in the previous years, financing focused especially on cruise shipping, telecommunications, and pulp and paper, and demand for new export credit guarantees and export credits remained high,” Finnvera said.

Demand for buyer credit guarantees reflects the structure of Finnish exports and the fact that the financing of capital goods exports requires long payment periods and long-term credits to the export company’s foreign buyer. The international wave of investments in cruise shipping could be seen in projects guaranteed by Finnvera.

In December 2019, Finnvera signed one of the largest financing agreements in its history, more than EUR 1.2 billion, with Royal Caribbean Cruises. The agreement is associated with a cruise ship to be delivered in 2025.

Finnvera’s exposure related to export credit guarantees and special guarantees granted to large corporates for export transactions was €25.2 billion at the end of 2019 (€23.3 billion). Drawn guarantees accounted for approximately €11.1 billion (€10.0 billion) of the exposure.

“In other words, more than half of the exposure was related to binding financing offers or agreements that are related to future deliveries by export companies, and thus they do not yet create any credit risks for Finnvera,” the organisation concluded.

MSC Splendida itineraries changed due to coronavirus

Details: Written by Kari Reinikainen Kari Reinikainen; Category: More News More News; Published: 31 January 2020 31 January 2020

MSC Splendida, deployed in Asia for winter 2019/20, has canceled its next three four and five-night scheduled sailings from Shanghai in China and will reposition to Singapore to start its 27-night ‘Grand Voyage’ to the Middle East and Europe for a February 14 departure, the company said in a satement.

The itinerary changes are a result of the coronavirus health situation in China although there have been no reported cases among passengers or crew on board MSC Splendida while she has served the Asia market throughout the winter.

Gianni Onorato, CEO, MSC Cruises, said: “The decision to reposition the ship from Shanghai to Singapore has been taken in the best interests of the safety and wellbeing for our passengers and crew, as was the decision to cancel our next three scheduled sailings from China.

“Many major airlines have either canceled or reduced their flight frequency to China and the Grand Voyage, a maritime tradition whereby a ship moves from one part of the world to another for a new sailing season, was entirely booked with guests flying from abroad to enjoy the experience of a unique itinerary.

“In light of Singapore becoming a new embarkation port we have had to cancel calls to Naha, Japan and Hong Kong but it has also created an opportunity to update and enrich the Grand Voyage’s itinerary with four additional new ports; Langkawi, Penang and Kuala Lumpur in Malaysia, plus Ho Chi Minh City in Vietnam to create a new, one-of-a kind memorable cruise.”

Customers who booked an outbound flight ticket to Asia will need to contact their airline or travel agent for a refund or possible re-protection to Singapore.

MSC Splendida will dock in Singapore on Thursday February 13 and guests can board the ship starting at 6:00 p.m. Singapore time and onwards. The ship will depart from Singapore on Friday February 14 at 11:00 p.m. Singapore time.