Business opportunities in Turkish Maritime Industry Marco Rensma Director MEYS Emerging Markets Research Istanbul, 24 May 2012
www.meys.eu Content presentation
1. Introduction MEYS Emerging Markets Research
2. Global trends seaborne trade and shipbuilding
3. Economic developments Turkey
4. Turkish maritime industry: 4.1 Developments seaborn trade Turkey 4.2 Trends in Turkish shipbuilding 4.3 Market of tankers and bulk carriers 4.4 Market of mega yachts 4.5 Market of naval ships 4.6 Market of offshore supply vessels
5. Outlook maritime industry Turkey 2012 - 2014
www.meys.eu 1. Introduction MEYS Emerging Markets Research
www.meys.eu What we do
− International market research and advisory for Dutch companies
− Focus on the emerging markets of: • Romania Turkey • Hungary Morocco • Czech Republic Vietnam
− Business clients from industry, construction, trade & logistics, transport
− Official partner TurkeyDesk - Fenedex
− Writing articles on emerging markets for: • Fenedexpress, monthly magazine Fenedex • Romania Magazine, quarterly magazine Dutch Romanian Network
− Presentations for companies, business associations, and universities on emerging markets and globalisation
− Parttime lecturer Global Marketing, The Hague University of Applied Sciences www.meys.eu 2. Global trends seaborne trade and shipbuilding
www.meys.eu Increased volume world seaborne trade
International developments seaborne trade (millions of tons loaded) 3.000
2.500
2.000
1.500
1.000
500
-
1990 1980 1985 2000 2005 2006 2007 2008 2009 2010 2011
Oil Main bulks* Other dry cargo Container Source: UNCTAD Note: (*) Iron ore, grain, coal, bauxite/alumnia and phosphate www.meys.eu Growth rate world seaborne trade could become lower after 2011
12 125
10 110 8 95 6
(%) 4 80 rate 2 65 USD/barrel Growth 0 50
-2
2003 2006 2009 2001 2002 2004 2005 2007 2008 2010 2011
2012f 2013f 2014f -4 35 -6 20 Seaborne trade Global economy Oil prices (R-axis) Source: UNCTAD, IMF, own calculations www.meys.eu Declining world volume new orders and order books
World volume (million GT) 400 350 300 250 200 150 100 50 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: SAJN New orders Order books
www.meys.eu Declining demand tankers and bulk carriers; small increase container ships World order book World order book container ships (mill. DWT) (mill. TEU) 160 7.000 140 6.000 120 100 5.000 80 4.000 60 3.000 40 20 2.000
0 1.000
2004 2000 2001 2002 2003 2005 2006 2007 2008 2009 2010 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Tanker < 200.000 DWT Tanker > 200.000 DWT Capesize Source: RS Platou www.meys.eu Falling prices for new tankers, bulk carriers and container vessels 100 90 80
USD 70
60 Million 50 40
30
2009M01 2011M10 2008M01 2008M04 2008M07 2008M10 2009M04 2009M07 2009M10 2010M01 2010M04 2010M07 2010M10 2011M01 2011M04 2011M07 2012M01 2012M04 Suezmax Capesize 3.000 TEU
Source: RS Platou www.meys.eu Lower demand mega yachts
300 261 250 218 214 213 200 195 176
150 114 Numbers 108 100 90
53 50 20 0 2007 2008 2009 2010 2011 2012* New orders Deliveries
Note: (*) Jan. - April Source: Camper and Nicholson, Boat International, SuperYacht Times www.meys.eu Increasing demand for offshore supply vessels (excl. tugboats) Volume world order books OSVs (number) 900 850 800 750 700 650 600 550
500
2008jul
2008jan 2009jan
2007okt 2008okt
2010feb 2011feb 2012feb
2008apr
2009aug 2010aug 2011aug
2009nov 2010nov 2011nov
2009mei 2010mei 2011mei
Source: Marcon International www.meys.eu Increasing overcapacity at shipyards worldwide 60
50
40
30 CGT
20 Million 10
0
2009 2010
-10 2008
2011e 2012e 2013e 2014e 2015e -20 Completions Shipbuilding capacity Overcapacity
Source: POSCO Research Institute www.meys.eu 3. Economic developments Turkey
www.meys.eu Turkey higher economic growth rate than EU-27
Economic growth rate (GDP, %) 10,0 8,0 6,0 4,0 2,0 0,0
-2,0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 -4,0 -6,0 EU-27 the Netherlands Turkey Source: IMF www.meys.eu Strong increase total foreign trade
Total foreign trade Turkey (billion euro) 300,0
250,0
200,0 Economic liberalisation 150,0
100,0
50,0
2003 2007 2000 2001 2002 2004 2005 2006 2008 2009 2010 2011 Source: Turkstat www.meys.eu Turkey relatively small export sector
Exports, 2011 (% of GDP) Ireland Malta Hungary Estonia Slovakia Netherlands Belgium Czech Republic Lithuania Slovenia Bulgaria Latvia Austria Switzerland Denmark Sweden Germany Poland EU-27 Croatia Norway Finland Romania Portugal United Kingdom Spain Italy France Greece Turkey 0% 20% 40% 60% 80% 100% 120% Source: Eurostat www.meys.eu Turkey large deficit current account
Current account balance, 2011 (% GDP)
Norway Switzerland Netherlands Sweden Denmark Germany Estonia Korea Japan Austria Slovak Republic Ireland Israel Belgium Finland Slovenia United Kingdom Australia France Canada Czech Republic United States Italy Spain New Zealand Portugal Iceland Greece Turkey Source: IMF
-10 -5 0 www.meys.eu 5 10 15 High inflationary pressure Inflation Turkey 2009 – 2012 (%) 30,0
25,0
20,0
15,0
10,0
5,0
0,0
-5,0
2009M11 2009M01 2009M03 2009M05 2009M07 2009M09 2010M01 2010M03 2010M05 2010M07 2010M09 2010M11 2011M01 2011M03 2011M05 2011M07 2011M09 2011M11 2012M01 2012M03
Total Food Energy Source: Eurostat www.meys.eu Weak Turkish Lira
Real effective exchange rate TRY (2010 = 100) 105
100
95
90
85
80
01-2008 04-2008 07-2008 10-2008 01-2009 04-2009 07-2009 10-2009 01-2010 04-2010 07-2010 10-2010 01-2011 04-2011 07-2011 10-2011 01-2012
Source: Bank International Settlements www.meys.eu Turkey Central Bank (still) holds interest rate relatively low Policy rate (%) 7,50
7,00
6,50
6,00
5,50
5,00
2011M12 2010M05 2010M06 2010M07 2010M08 2010M09 2010M10 2010M11 2010M12 2011M01 2011M02 2011M03 2011M04 2011M05 2011M06 2011M07 2011M08 2011M09 2011M10 2011M11 2012M01 2012M02 2012M03 2012M04 Source: Central Bank Turkey www.meys.eu Economic outlook Turkey 2012 – 2014 positive
Growth rates for Turkey (%) 10,0
8,0
6,0
4,0
2,0
0,0 2010 2011 2012 2013 2014 GDP Private consumption
Source: EIU Exports Government consumption
www.meys.eu Turkish current account deficit remains high after 2011
Balance current account Turkey (% GDP) 0,0 2010 2011 2012 2013 2014 -2,0
-4,0
-6,0
-8,0
-10,0 Source: IMF www.meys.eu 4. Turkish Maritime Industry
www.meys.eu 4.1 Developments seaborne trade Turkey
www.meys.eu Turkey strategically located for international seaborne trade
www.meys.eu Ports are located all along Turkish coast
• 175 Ports • 90 per cent private operated
Source: ISPAT
www.meys.eu Busy times at Turkish seaports
Volume goods handled at Turkish seaports (million tons) 400 350
300 Cabotage 250 200 150 100
50
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: UMA Total volume Export/import www.meys.eu Slowing down growth rate seaborne trade Growth rate seaborne trade Turkey(%) 60%
40%
20%
0%
-20%
2012M01 2009M01 2009M03 2009M05 2009M07 2009M09 2009M11 2010M01 2010M03 2010M05 2010M07 2010M09 2010M11 2011M01 2011M03 2011M05 2011M07 2011M09 2011M11 2012M03 -40%
-60% Exports Imports Source: Turkish customs www.meys.eu Turkey relatively large merchant fleet
Total DWT merchant fleet as a percentage in world total, 1-1-2011 (%)(a)
Greece Japan Germany China excl. Hong Kong Republic of Korea US Norway China, Hong Kong SAR Denmark Taiwan Singapore Bermuda Italy UK Turkey Russia Canada India Malaysia Belgium Iran Saudi Arabia Brazil Indonesia Cyprus UAE Netherlands France Viet Nam Sweden
Source: UNCTAD 0 5 10 15 20 Note: (a) Vessels of 1,000 GT and above operating under national and foreign flag www.meys.eu Relatively young merchant fleet
Age merchant fleet Turkey, % in total DWT (December 2011)
30+ years Mainly smaller vessels < 10.000 DWT 20 - 29 years
10 - 19 years
0 - 9 years
0 10 20 30 40 50 60 Source: Turkey Chamber of Shipping
www.meys.eu Strong increase container handling
Volume container handling Turkish ports (x 1.000 TEU) 7.000 6.000 5.000 4.000 3.000 2.000 1.000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: UMA, TURKLIM www.meys.eu Turkish ports relatively small globally in container handling
Container throughput, 2009 (x 1.000 TEU)
China United States Singapore Hong Kong Japan Korea, Republic of Malaysia UAE Germany Spain Taiwan Netherlands Belgium Italy India Indonesia United Kingdom Brazil Egypt Australia Thailand Viet Nam France Panama Turkey
Source: UNCTAD - 20.000 40.000 60.000 80.000 100.000 120.000
www.meys.eu 4.2 Trends in Turkish shipbuilding
www.meys.eu Concentration of shipyards in Istanbul (Tuzla Bay) and Yalova
(8) (1) (1) (27) (1) (1)
Yalova (21) Izmit (6) Sakarva (1) Canakkale (2)
71 shipyards as of 1-1-2012
(1) Hatay (1)
Source: UMA www.meys.eu Turkey among the ‘best of the rest’
Top 20 economies for shipbuilding, 2010 deliveries (% in world total DWT)
China 41,07% Republic of Korea 31,34% Japan 21,77% Philippines 1,24% Romania 0,60% Viet Nam 0,56% Denmark 0,50% Taiwan 0,44% Croatia 0,35% Germany 0,35% Turkey 0,33% US 0,22% Russia 0,17% Spain 0,15% Indonesia 0,12% Netherlands 0,12% India 0,09% Italy 0,08% Poland 0,08% Bulgaria 0,07% 0% 10% 20% 30% 40% 50% Source: UNCTAD www.meys.eu Large overcapacity at Turkish shipyards
Number of ships built Ship deliveries and max. production at Turkish shipyards capacity (x 1.000 DWT) 160 4.000 140 3.500 120 3.000 2.500 100 2.000 80 1.500 60 1.000 40 500 -
20
2008 2004 2005 2006 2007 2009 2010 2011
0 2003
2009 2001 2002 2003 2004 2005 2006 2007 2008 2010 2000 Ship deliveries Production capacity
Source: Turkey Chamber of Shipping, UMA www.meys.eu Order books Turkish shipyards are under pressure. Focus primarily on tanker building
Total order books Turkish shipyards Order books by type of ship 2010 (%) (x 1.000 GT) 3.000 9%
2.500 17% 2.000
1% 1.500 2%
1.000 71% 500
Container General cargo RO-RO -
Bulk Carrier Tanker
2008 2005 2006 2007 2009 2010 2011
Source: Turkey Chamber of Shipping, SAJN www.meys.eu 4.3 Market of tankers and bulk carriers
www.meys.eu Tankers and bulk carriers most used vessels in Turkish merchant fleet
Merchant fleet Turkey (DWT)* 11.500.000 10.000.000 8.500.000 7.000.000 5.500.000 4.000.000 2.500.000 1.000.000 2008 2009 2010 2011 Tankers Bulk carriers Total Note: (*) ships over 150 GT Source: UMA www.meys.eu Tankers and bulk carriers main shipbuilding marketsegments
Ship deliveries Turkey 2010 (percentage of built tonnage) 4,6 1,2
16,8
58,6 18,7
Tankers Bulk carriers Other dry cargo/passenger Offshore Source: OECD Others www.meys.eu Since 2007 domestic demand for tankers higher than foreign demand
Tanker deliveries Turkish shipyards (number) 90 80 70 60 50 40 30 20 10 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Export Domestic Source: OECD, Turkey Chamber of Shipping www.meys.eu Decreasing volume order books, particular for tankers Order books Turkey (number) 200 179 175 150 125 116 100 90 77 74 75 57 50 21 21 23 24 21 22 25 8 12 12 10 13 8 0 2 5 3 2 1 0 2008jan 2009feb 2009dec 2010dec 2011mei 2011okt
tanker bulk dry cargo container
Source: OECD, Turkey Chamber of Shipping, Clarkson
www.meys.eu 4.4 Market of mega yachts
www.meys.eu Strong increase international tourism
Foreigners arriving (persons) 35.000.000
30.000.000
25.000.000
20.000.000
15.000.000
10.000.000
5.000.000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Turkstat www.meys.eu Turkey third largest builder of mega yachts
Mega yachts builders 2010 (% in total boat length)
Others China UAE Taiwan New Zealand UK US Germany Turkey Netherlands Italy
0 5 10 15 20 25 30 35 Source: Camper and Nicholson www.meys.eu Lower demand mega yachts from Turkish shipyards
Market of mega yachts Turkey (number) 29 30 27 25 25 23 20 19 18 18 15 10 10 5 6 5 1
0
2007 2008 2009 2010 2011 2012* Completed New orders
Note: (*) Jan. – April Source: SuperYacht Times, Camper and Nicholson
www.meys.eu Lower prices 2012Q1 after records in 2010 and 2011 Average asking prices mega yachts Turkey (Loa per metre) 450.000 400.000 350.000 300.000
250.000 Euro 200.000 150.000 100.000 50.000 2007 2008 2009 2010 2011 2012*
Note: (*) Jan. - April Source: Boat International, Super Yacht Times, The Yacht Market www.meys.eu Examples of mega yachts built in Turkey
Boat: Aegean Yacht Ketch Boat: Peri 37M Builder: Aegean Yacht Builder: Peri Yachts Boat length (Loa): 26.60 metres Boat length (Loa): 37.75 metres Asking price: 2.000.000 euro Asking price: 8.000.000 euro
www.meys.eu 4.5 Market of naval ships
www.meys.eu Strong increase turnover Turkish defense industry
Defense industry Turkey (x 1.000 USD) 3.500.000 3.000.000 2.500.000 2.000.000 1.500.000 1.000.000 500.000
-
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: SaSad Turnover Exports
www.meys.eu Strong increase in expenditures on military equipment
Development Defense Industry Support Fund 2.000 1.800 1.600 1.400 1.200 USD 1.000
Million 800 600 400 200
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Income Expenditures
Source: Undersecretary Defense Industry (SSM) www.meys.eu Large investment programs Turkish navy MILGEM GENESIS • Investment program of 2 billion dollars over • Upgrading weapons a period of 15 years systems on board 8 frigates • Building of twelve (four optional) Patrol and Anti-Submarine Warfare Ships
Submarines TF-2000 • Building of 6 submarines • Building of 6 anti-air frigates • Value of the contract 2 billion dollars • Value of the contract 3 billion • Cooperation between HDW from Germany and dollars several Turkish companies, among others Aselan • First delivery 2018 and Havelsan
www.meys.eu 4.6 Market of Offshore Supply Vessels
www.meys.eu Turkey small builder in global market of OSVs
Volume order books OSVs Turkish shipyards (number) 14
12 Turkey 1% of global market 10
8
6
4
2
0
2008jul
2009jan 2008jan
2007okt 2008okt
2010feb 2011feb 2012feb
2008apr
2009aug 2010aug 2011aug
2009nov 2010nov 2011nov
2009mei 2010mei 2011mei
Source: Marcon International www.meys.eu Examples Turkish built OSVs
RMK Shipyard CEMRE Shipyard • Offshore multi-purpose ship • Offshore support vessel • 7.800 DWT • LOA 86 metres • Delivery 2009 • Delivery September 2011 • North Sea Shipping (Norway) • Havyard (Norway)
www.meys.eu 5. Outlook maritime industry Turkey 2012 - 2014
www.meys.eu Market segment Outlook Market opportunities Market threats 2012 – 2014 Tankers ++ ✓ Increasing demand oil and gas transport ✓ Falling newbuilding prices ✓ Strong domestic base -> excess capacity ✓ Partly replacement merchant fleet ✓ Strong competition Asia ✓ Regional energy hub ✓ High investments costs ✓ Relatively low labour costs Bulk carriers + ✓ Growing economy Turkey ✓ Falling newbuilding prices ✓ Partly replacement merchant fleet -> excess capacity ✓ Relatively low labour costs ✓ Strong competition Asia ✓ Lower growth rate global economy Container ships + ✓ Growing economy Turkey ✓ Falling newbuilding prices ✓ Regional trading hub -> excess capacity ✓ Relative low labour costs ✓ Strong competition Asia ✓ Lower growth rate global economy Mega yachts ++ ✓ Strong increase international tourism ✓ Strong competition from ✓ Higher incomes in Turkey Europe ✓ Volatile and small global market Naval ships +++ ✓ High government expenditures ✓ Political developments ✓ Increase foreign demand ✓ Difficult market to enter for new foreign companies OSVs ++ ✓ Investments by oil and gas industry ✓ Strong global competition ✓ Increasing energy demand Turkey ✓ High investments in R&D ✓ Strong dependence on foreign imports www.meys.eu Thank you for your attention!
Marco Rensma Mobile: +31(0)612792560 E-mail: [email protected]
www.meys.eu