Maersk to exit shipbuilding business

Maersk to exit shipbuilding business    The shipyard that built the Emma Maersk is exiting the shipbuilding business.
   The A.P. Moller – Maersk group said Monday that the Odense Steel Shipyard in Lindo, Denmark, would discontinue shipbuilding activities and seek to sell its other shipyards in Lithuania and Estonia. The company employed an average of 4,939 employees last year, down from about 8,500 at the beginning of the decade.
   “Due to the expansion of the yard capacity in low-cost countries in the Far East and most recently with China's determined endeavors of becoming the world's largest shipbuilding nation, the competitive situation for the shipbuilding industry has become increasingly difficult in recent years,” the company said in a statement Monday.
   “Regardless of the even huge effort to improve the yard's competitiveness with investments in new technology and streamlining of the production, the yard has run up very considerable annual deficits and must today realize that it is impossible to attract orders, which are commercially sound.
   “In this light the board of the yard has decided to discontinue the shipbuilding activities, when the contracted orders have been fulfilled. Thus the present workforce will be continuously downsized to accommodate production. The contracted orders (five bulk carriers, seven roll-on/roll-off ships and three frigates) extend to August 2010, November 2011, and February 2012, respectively. The first redundancies of approximately 175 employees are expected to take place from the end of August this year,” the company said.
   During 2008, the Odense Steel Shipyard Group delivered one 11,000-TEU and four 7,000-TEU container vessels to Maersk Line, but the company in its annual report said it had a loss in 2008, before tax and before shares in the results of affiliated and associated companies of 513 million Danish kroner ($97.7 million) and after tax 389 million Danish kroner ($74.1 million).

The Odense Steel Shipyard in Lindo, Denmark, which built the Emma Maersk, will discontinue shipbuilding activities.

   The Odense yard is famous for building the Emma Maersk, arguably the largest containership ever constructed, and its sister ships in the PS-class. While Maersk said they have capacities of 11,000 TEUs, other analysts rate capacities at about 15,000 TEUs.
   'We have to realize that it is impossible for Lind' to attract new orders. The board has therefore decided to make it absolutely clear that Lind' will not be building more vessels, once the contracted orders have been delivered,' said Lars-Erik Bren'e, chairman of the board. “We will continue the process of attracting clients to the business unit, Lind' Industrial Services.”
   In January, the Yard Group announced a new business model for the division of Odense Staalskibsv'rft into three business units: shipyard, industry and shared facilities.
   The company said with the discontinuation of the shipbuilding activities at Lind', there is no longer a need for ownership of the Lithuanian shipyard, Baltija Shipyard. The company had already begun last year efforts to sell the Loksa Shipyard Ltd. in Estonia.