EMEC President speech at Marintech China 2007

Below is the text of EMEC President, Mr. W.M. van Gulpen's speech at Marintech China 2007, on Nov. 26, 2007.

The maritime transport is in bloom and the forecasts for the future are more than optimistic, with the global trade volume growing constantly. The marine equipment manufacturers and service providers supply all the products and services necessary for building, repair, conversion and maintenance of vessels. The products and services delivered by the industry account for up to 70% of the total value of the ship (and it comes to 85% for cruise ships).

In this period of growth, it might be ‘easier’ to develop a more cooperative approach betwee

After a brief overview of the historic development of marine equipment and some consideration about the present structure of the industry, I would like to take up and propose some of these issues related to our industry which could represent the basis of cooperation between Europe and Asia in the field, as they are beyond the particular interests of geographical areas.

1. Equipment suppliers originated in a national model: suppliers to their own domestic shipbuilders within each country.
2. In the 1950s and 1960s leading equipment companies began exporting and/or licensing to the commercial sector to other European countries and later to Japanese and Korean shipbuilders.
3. From the late 1970s start of the contraction of commercial shipbuilding in many though not all European countries with the growth of shipbuilding in:
   1. Japan from the 1960s
   2. Korea from the 1980s
   3. China from 2000
4. In its turn Japan has been overtaken by Korea and now China.
5. From the mid 1990s leading European equipment suppliers further expanded their international sales by:
   1. Overseas manufacture or collaboration
   2. Strong innovation

1. Some large equipment supplier groups but still large numbers of SMEs. The large groups are global and increasingly focused on design, marketing and international operations more than manufacture.
2. The supply of equipment to the naval sector is still predominantly national though with some tendency for these silos to break down. Perhaps the start of a more European approach.
3. European equipment makers have 40% of the world equipment market.
   • Japanese equipment makers are strong in Japan and elsewhere in the Far East but weak in Europe.
   • Korean equipment manufacturers are beginning to pose some threat but still with some problems of lower quality and innovation compared with European companies.
   • In Korea also some threat from the large yards becoming more interested in manufacturing own equipment.
4. In addition to naval yards throughout Europe the big cruise yards are major markets.
5. Ship owner relationships are of utmost importance. The more sophisticated is the marine equipment the more important are the ship owners. European equipment makers therefore derive great strength from strong and technologically aware owner populations and offshore capabilities through many countries of Europe.

1. European Marine Suppliers are leading technology drivers for the world wide shipbuilding sector. The European suppliers are the ones that introduce the majority of new innovations in shipbuilding and the European suppliers are the ones that provide solutions for environmental issues and safety standards;
2. European Marine Equipment (and Systems) has more to offer than propellers alone: With all due respect to a major part of our industry, European equipment industries are not only world leaders in propulsion. Cargo handling, communication, automation and environmental systems are also of major importance;
3. European Marine Equipment (and Systems) offers complex integrated solutions. Marine equipment is ahead in the production of integrated processes and technologies. Integrated technologies are part of this industry and its main asset for the future. As access to technology becomes widespread, it is the intellectual ability to use and integrate technology that will enhance the competitiveness of the sector.

The European marine equipment manufacturers challenge the global competition by investing in research and innovation. Half of the European production is exported.

1. Studies - Lack of studies on marine equipment
2. Statistics – lack of an International classification for marine equipment
3. Standards/rules and regulations – lack of wide harmonization and a more efficient certification
4. Intellectual property rights (IPR) – lack of appropriate enforcement and protection

Studies – There are studies and regular updates on ship orders and yards capacities. Unfortunately there are no comprehensive and exhaustive studies on marine equipment at world level. This might be also due to the problem of data collection linked to point 2.

Statistics – under the international classification system, it is missing a specific section for marine equipment. Products and systems on marine are scattered all over the places making nearly impossible to collect and present data for the sector (like it is for example possible for the equipment in the aviation industry). Standards/rules/regulations – the maritime sector (including marine equipment) heavily relies on the activities and involvement of classifications societies. Contrary to some other sectors, the maritime one is missing an international standardisation and further than that, it is missing an appropriate harmonisation of those standards, rules and regulations (including the certifications process)

Intellectual property rights (IPR) – due to the specificity of the maritime sector – ships moving all over the world and entering ports belonging to many different countries - the general rules for intellectual property rights are more difficult to enforce (copied or counterfeited products on board of ships are difficult to be checked and taken out). A need for greater harmonisation of technical rules and regulations has also been identified by the industry as a bottleneck and a need for reducing inefficiencies in certification and Class processes.

From a pure Association perspective – not a business one – the above mentioned issues could be developed in a joint agenda with our Asian colleagues. Historically, yards, shipowners and Class Societies have been discussing issues which highly affect also marine equipment manufacturers and suppliers but marine equipment has never sit at the table with them. Marine equipment is global and as a role to play in the international discussions on the future of the maritime sector. If we want to be a player in the International political maritime agenda, we need to organise ourselves at International level and make our voice heard.

In this perspective, I strongly believe that we can build a cooperative platform between Asia and Europe. I see margins for cooperation, not only on the complementarily of Asian shipbuilders and European marine equipment suppliers (more on a business perspective) but also and mainly on the basis for setting up an International platform for equipment suppliers, speking up for the sector and sitting at the table with the other global players of the maritime industry.

This seems very obvious when considering that a hull is a body of the ship and the equipment is its brain, muscles and blood circuit: how could we separate the body from its brain?