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 Source: Bank InternationalBank Source: 100 105 80 85 90 95 01-2008 04-2008 Settlements 07-2008 Real effective exchange rate TRY (2010 = 100) (2010 TRY rate exchange effective Real 10-2008 Weak 01-2009 04-2009 Turkish www.meys.eu 07-2009 10-2009 01-2010 04-2010 Lira Lira 07-2010 10-2010 01-2011 04-2011 07-2011 10-2011 01-2012 Source: Central Bank Central Source: 7,00 7,50 5,00 5,50 6,00 6,50 Turkey Central Bank ( Central Turkey 2010M05 T urkey 2010M06 interest 2010M07 2010M08 2010M09 2010M10 2010M11 2010M12 rate 2011M01 (%) rate Policy www.meys.eu 2011M02 2011M03 relatively 2011M04 2011M05 2011M06 2011M07 still 2011M08 2011M09 ) low 2011M10 holds 2011M11 2011M12 2012M01 2012M02 2012M03 2012M04 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.