Shipbuilding in Croatia: Restructuring Shows Progress

Total Croatia News

Instead of building ships that create losses, some ventured into other projects such as building the Gates of Venice

Large domestic shipyards – Brodosplit, Brodotrogir and 3.Maj – have entered the fourth, second to last year of restructuring after privatisation, whose execution is being monitored by the state and European Commission. All three shipyards, per their contracts with new owners, have to complete 2016 with a positive balance, one of the parameters to be considered at the end of the process, Poslovni Dnevnik wrote on July 5, 2016.

Already last year, the Rijeka-based 3.Maj ended with profit, while Brodotrogir is the only one with a positive balance the entire three years. Only Brodosplit has shown a loss for the last two years, with profit in 2013. This was due to an enormous amount resulting from the disputed addition to income of all future foreseen state subsidies for restructuring. Such a calculation might backfire due to decline of orders at the world shipbuilding market, but Brodosplit announced despite it all they will fulfil that mission and finish 2016 with a profit.

Although indicators for the three shipyards cannot be compared, due to the different sizes and profiles, as well as new politics enforced by owners, there are great oscillations of their export income. In case of Brodotrogir they have almost vanished; in 2013 they amounted to 21 million Kuna, with only 213 thousand last year. In 3.Maj they still manage to preserve a large share of export in their income, although it was reduced from 65 to 55%. Brodosplit is specific as their export was only 9% in the first year, with the share growing to 42%, but mostly due to the decline of total income than increase in export.

Brodosplit has been dragging around weight due to the work organisation practiced by the owner, DIV from Samobor and Tomislav Debeljak. Other than in profit, it is hard to compare the number of employees, as after a clean-up in the first year, new workers were employed in a line of other companies founded alongside Brodosplit. Croatian Shipbuilding Jadranbrod, designated by the state and EC to monitor the commitments in all three shipyards, has been constantly reporting on the failure to respect the charted frame in Brodosplit in the area of presenting their contribution to the actual restructuring, as well as an insufficient number of contracts for ships.

The owner Debeljak has justified such deviations by the changing situation in the global market and a change of work practice compared to the previous practice of contracting ships below their production price. Instead of building ships with losses, Debeljak is attempting to fill the production line with jobs such as the Gates of Venice. More valuable contracts include five patrol ships for the Croatian Navy, but due to a change in the project, construction of the first ships is delayed. Debeljak claims to have secured full employment until 2019.

The projected ships for their own use have not been built in Brodosplit, unlike Danko Končar in Brodotrogir, who just launched the second ship for his fleet. What makes Končar different is the retention of the old management and the shortest period in obtain gin state support, without which he’s been doing business for a year. Except his own fleet, Končar has been directing the work of the shipyard into ship repair, with a marina project.

3.Maj, which entered the restructuring free of the main loss-makers from its system (four companies with over 500 employees), has been working under guidance form the Uljanik shipyard and construction ships for vehicle transport and bulk cargo, but the Pula-based Uljanik has openly showed intent, after the five-year restructuring, to completely join the Rijeka shipyard to Uljanik.


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