Turkey’s Shipbuilders’ Association (GİSBİR) President Murat Kıran commented on latest developments in the Turkish shipbuilding industry for MarineDeal News readers
As GISBIR, what kind of efforts are you involved in regarding shipyards moving toward eco-friendly constructions following IMO regulations?
As Turkey’s Shipbuilders’ Association President, I am proud to say that our industry exports battery operated/hybrid, innovative ships mainly to EU nations which fulfill their Green Deal objectives. In addition; our trailer which we have put into service in the Tuzla Shipyards Region as of 2020 has become a project envied around the world with its title as “the world’s first battery operated, fully electrical trailer.” Our goal is to make our Tuzla Shipyards Bay “the World’s First Decarbonized Region” with this trailer type which is both designed and built in Turkey.
The GİSBİR Environment Commission is working on directing many topics such as clean production, obtaining electricity through renewable energy sources, and recycling waste under the leadership of our board of directors. Some of our leading members are quickly implementing environmentalist approaches. Several shipyards have implemented energy efficiency in lighting, we have members who work on solar panels, and there are shipyards which use renewable energy. I sincerely congratulate all shipyards which show environmental awareness and implement it within its capabilities. I foresee our sector to move quickly in environmentalist implementations.
How ready are our shipyards for ship modernization which is necessary for the transition process of ships to green trade?
There are very well-qualified, well-informed designers in Turkey who have proven themselves. As a result of these designers’ efforts, a figure comes out. Once this figure is out, designers begin their work based on the equipment produced around the world. As a shipyard and as a designer, you contact providers based on this effort. As a result of all this, once the prices are determined, if all conditions are suitable and if there is a fruitful situation, you move on to implementation.
In brief, the shipyard does not produce machines, paint, panels, insulation material, separators, or plates. The shipbuilding industry, shipyards create ships by bringing together all ship equipment that you can imagine which has been produced in various industries in a way incorporating all these elements. In this sense, we have made a great contribution to the developing world technology. Therefore, it is in our hands to produce and design ships that use less fuel, are more viable for speed, are more ecofriendly and green.
We have already come to a very good place. But in terms of new regulations and green decarbonization, these are matters that equipment producers need to focus on, more so than shipyards. We will implement these…
Excluding ships which are propelled by the wind, there are no ships around the world which target the 2050 Green Deal year, compatible with the zero-emission ship concept. All nations are working on designing these ships, equipping them with appropriate technologies and building them as of 2030. In order for the world maritime commerce fleet to reach the 2050 Green Deal targets, this type of ship technologies need to be developed as of 2030.
There is a generation which we call the “Z Generation,” those who were born in the beginning of the 2000’s. This generation in particular does not want to work in the area of production. What can be done to win this generation?
We’ve expressed at every opportunity we had that training qualified personnel is one of the most important topics for the Turkish shipbuilding industry. GİSBİR has a Human Resources Commission specifically created for this matter. We are in direct contact with our schools. We conduct visits to every city in Turkey to educate our students on our sector and inform them on its needs. With the Chamber of Maritime Engineers, we develop internship opportunities for students in our sector, and work tirelessly so that our students can have the opportunity to use the classes they have taken on the theory and experience them in practice during an internship. Our need for a qualified staff changes due to IMO’s changing rules as well as the development in environmentalist technologies every moment. In that sense, remaining up to date and together with the students is among GİSBİR’s priorities.
What can be done for the Turkish shipbuilding sector stakeholders to increase export figures and to become more active in the global market?
Other than our shipyards, our invisible power is our subsidiary industry. Meaning, we need to be one with our subsidiary industry. We are already fulfilling our role in terms of increasing export figures by using almost a hundred percent of the existing capacity at hand.
Concepts can be confusing here, naturally. When you do the calculation based on our plate handling capacity and the ships we produce, this data will be incorrect. Because each shipyard surely has a certain capacity for plate handling. However, this can fluctuate based on the jobs it gets. Meaning, we all do niche business which yield great revenue even if it did not handle a large number of plates.
So, how can we increase this? We are actually on 4 million 500 m² in Turkey overall. This is very important! Why is it important? We actively use 3 million 800 m² of this 4 million 500m². Accordingly, we have a $1,3 billion worth of exports but there is also an export of nearly $1 billion from repairs-maintenance. On the other hand, there are unspoken military projects for the defense industry that we do, which are also subject to exportation. These are the invisible line items. In short, we are a sector which brings in nearly $3 billion worth of foreign currency. When you divide this currency by the current square meters we use, the result is significant. Besides, at this point, we conduct nearly zero importation in repairs-maintenance. Meaning, the foreign currency we bring in stays with us. In terms of new construction, we are around the average mark of 50 percent. The import rate of the foreign currency we bring in, meaning 50 percent, remains in Turkey. When our sector exports $10, it does not have to import $9 or $12 in return. This is the entrepreneurs’ success, our subsidiary industry’s success and our success.
Today, we can take on more niche business and increase the number of projects which will raise exportation geared toward the defense industry. However, this can only happen with time.
How do you view the inflow of foreign currency in our country through our shipyards? What is Turkey’s shipbuilding share in the maritime commerce around the world?
Our transition from the economic crisis in 2008 to this day surely deserves credit. At that time, our inflow of foreign currency had dropped to nearly $1 billion. As of 2021, our total of export figure was $3 billion, consisting of an inflow of nearly $2 billion in new ship construction and $1 billion in repair-maintenance, which continues to increase. Since we have signed off on the firsts and the bests in the field, Turkish shipbuilding has caught the attention of the entire world. Our country’s shipyards, new ship orders are 6th based on the number of pieces, 13th based on tonnage, and 3rd based on the construction of super yachts based on meters. All this success surely has great returns to both our industry and our country.
Recently, large companies’ ships have been stopping at our shipyards for repairs-maintenance, how do you view the reason for this?
The world’s leading companies, if their area of business is suitable to ours, meaning they operate in the Mediterranean–Black Sea basin, they have preferred us, not just recently but always. Murat Kıran Murat Kıran Murat Kıran Murat Kıran
The most important reason for the recent slight increase is the fact that a set of criteria determined and decisions made regarding the pandemic in the Far East have made business more difficult. As we’ve always said, there should not be any issues in the entry-exit of spare parts needed for ships that come into the country for maintenance. Because we are racing against minutes. Ship owners choose to come to our region due to the serious delays in Far East countries caused by the pandemic.
Our capacity is clear, for sure. We have significantly fulfilled our capacity and therefore the increase will not continue. Wherever the ship’s position is suitable for, the repairs and maintenance will be done there. All companies have surely gone through Turkey at least once. This is an international business. Murat Kıran Murat Kıran Murat Kıran Murat Kıran
What new products can be added to the Turkish shipping subsidiary industry in order to increase the share of local production?
The local main machines used in the ships are not produced in our country. We need to expedite our efforts to close this gap. On the other hand, the importance of increasing the capacity of the Eregli Iron and Steel Factory which produces flat steel has become more evident during the latest Russian-Ukrainian War. The importance of focusing on local production in order to resolve supply issues has once again become clear. Also, there are certain products made in our country which do not have the certifications necessary to be used in ships, this gap should also be eliminated.
In the global supply chain, are there any issues in the supply of spare parts and steel?
If I may explain this with an example, our most current issue these days is supplying flat steel! Our shipyards supply flat steel mostly from Russia and Ukraine. Due to the delays caused by the war, we have heard that some of our shipyards have had to purchase more expensive products from Europe and countries such as China as an alternative.
On the other hand, the increasing cost of energy has negatively impacted every sector which uses it for production. This has caused a chain reaction leading to an increase in the cost of certain equipment and spare parts obtained from Europe. Murat Kıran Murat Kıran
Where do you see Turkish shipyards in the production of autonomous maritime systems and the digitalization of shipyards?
Following Covid-19, everybody realized that maritime transportation is responsible for more than 90 percent of global commerce. With the volume of traffic in our seas increasing every day, we are in a period where we need to make the high-volume traffic safer through innovative technologies, more ecofriendly and even autonomous systems. It has become vital to accurately analyze the data obtained from our ships before the ship even docks in the port. There are some serious advances in this area particularly in Europe and the United States. We pay special attention to modify our existing ships according to these systems and to design the construction of our new ships accordingly. I believe that digitalization and autonomous systems will be used more effectively within the next 10 years in both our ports and ships. Murat Kıran Murat Kıran Murat Kıran
Does the administration or do the respective ministries fulfill your requests?
Our relations and communication channels with our administration as well as the respective ministries is at the highest level desired. We are constantly in contact, communication, and cooperation. We do not feel there are any issues in terms of communication. We express our concerns and they listen to us. We do get positive returns as well. If I may give an example to this, the issue of foreign banks not accepting letters of guarantee issued by Turkish banks has been relayed to all respective authorities, there have also been long-term efforts with Türk Exim Bank. These efforts yielded a result and Türk Exim Bank began issuing letters of guarantee.
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