Demand for ship repairs in Greece is on the up as shipowners return to using their own shipyards over neighbouring countries – bringing the decline of the sector to an end says CSM Greece.
Gregory Spourdalakis, Managing Director of Columbia Shipmanagement Greece charts the rise and fall of the sector and how a resurgence in the market could be on the horizon.
For many years, Greek shipowners have sent ships for repair to neighbouring countries such as Romania, Bulgaria, and Turkey, rather than using local shipyards. This was due to higher labour costs, local requirements and rigid union practices affecting projects completion time that resulted in repairs taking place in Greek Shipyards to be abandoned if not ruined.
Business has slowly returned to Greek shipyards following the exit from the world recession and subsequently Greece from the economical crisis of 2009. More recently there has been a significant increase in business for local shipyards following years of decline with a notable shift towards improving competitiveness of the Greek ship repair market.
The revival of Greek Shipyards began during 2019 when Neorion Shipyards and Elefsis Shipyard were taken over by Onex Shipyards and Technologies. Covid-19 and travelling restrictions as well as EU increasing import demands in cargoes due to the Russian/Ukraine war resulted in higher demand of vessels in the EU. The restructuring and reopening of Skaramangas shipyard and increased activity in Chalkis have set the groundwork for the ship repair sector in Greece to grow significantly.
Additionally, inflation in Turkey, the exchange rate between USD and Turkish Lira, as well as the high prices of the EU Shipyards gave Greece a competitive advantage for ship repairs even for vessels not trading in the MED area.
Under the administration of Prime Minister Kyriakos Mitsotakis, the Greek Government sold its stakes in Elefsis and Syros Shipyards. Restructuring of Elefsis has been officially approved and US Congress at the same time approved the financing through borrowing of USD125M enabling Onex to carry out the consolidation plan of Elefsis.
Geopolitical requirements and Greece’s geographical location, the restructuring of Greek Shipyards, competitiveness in terms of infrastructure and human resources in Pireaus, as well as increased prices in EU Shipyards and Turkey have resulted in Greece being an important contributor to the EU ship repair sector, The market has seen Neorion and Elefsis alone repairing more than 500 vessels the past five years.
With the ship repair industry in Greece boasting significant technical expertise and facilities that are fully capable of handling complex repairs, Greek shipyards are successfully adapting to an increase in demand. If competitiveness continues to improve, there is real potential for Greek shipyards to reclaim their position as a preferred choice for repairs, particularly considering the nation’s maritime heritage and the commitment of the Greek ship owning community.
This shift has broader economic implications as well. A more competitive ship repair industry in Greece means more jobs for Greek maritime workers and seafarers, boosting the country’s economy and reinforcing its status as a global shipping hub. The Greek maritime sector has always been a powerhouse, but for it to maintain its strength, adaptability is key.
Whilst it remains to be seen whether Greek shipyards can fully reverse the trend of outsourcing to neighbouring countries, there are strong indications that the industry is moving in the right direction. If costs can be kept competitive and reducing bureaucracy continues to be addressed, Greece may yet see a resurgence in its ship repair sector, which will be a win not just for shipowners, but for the entire Greek maritime industry.
