Image credit: The Maritime Executive.
As China and South Korea maintain their dominance in global shipping, Turkey has experienced a decline in a sector that was once highly profitable. Recent data from the Turkish Exporters Assembly (TIM) show a 27.5% drop in shipyard exports for the first quarter, totaling $328 million. In March, exports fell by 40%, dropping to $86 million compared to the same period last year. Consequently, shipbuilding became the worst-performing industrial export sector in the first quarter.
This decline is mainly due to rising operational costs and challenges in securing financing. Production costs are now nearly on par with Norway, a key export market for Turkish-built ships. To adapt, major Turkish shipyards have invested abroad, aiming to offset the tough domestic market conditions.
In 2023, Tersan Shipyard, a leading company based in Altinova, Turkey, acquired Havyard Leirvik Shipyard in Norway. Tersan stated that the acquisition is part of its strategy to strengthen its presence in Northern Europe and globally. In the same year, another Turkish company, Hicri Ercili, acquired Norden Shipyard in the Netherlands.
“New orders continue to decrease, and we expect a contraction of over 15% in sector exports by year-end. The weakening of the Turkish currency has added more challenges, driving up foreign currency loan interest rates,” said Cem Seven, chairman of the Ship, Yacht and Services Exporters’ Association (GYHIB), in an interview with Ekonomim news.
Employment losses have also become a major concern. Over 80 active shipyards in Turkey have seen nearly a 10% drop in employment over the past seven months. The last time the sector saw positive results was in 2023, with exports rising by 33% to $1.94 billion. During that year, Turkey surpassed China in tugboat manufacturing and led the world in fishing boat construction.