Spain's Galician shipyards buck the global crisis

22nd February 2009, Comments 0 comments

Shipyards in Spain's Galicia region are defying the global financial crisis, creating hundreds of new jobs as order books fill up, largely by switching to the production of specialised high-technology vessels.

VIGO - "We are going through a good period which will allow us to stay afloat even if the crisis is affecting other sectors," said Jose Dominguez, head of development for the shipbuilding industry in the port of Vigo.

The Vigo shipyards have full order books through 2012, some of them until 2014, and some 55 ships under construction.

It is an encouraging sign, in a remote and rugged northwestern region that is to vote on March 1 in elections for a new regional parliament and which has been otherwise hard hit by the economic crisis affecting Spain as a whole.

Dominguez explained the reasons behind the success.

"Contracts currently being fulfilled were signed in 2006-2007, at the time of the great boom in shipbuilding throughout the world," said Dominguez, who is also financial head of the shipyard of Factorias Vulcano.

"This crisis comes at a time when, unlike other sectors, we already have customers," he said, noting that the "process between the signing of the contract and the completion of the ship can take several years."

Vigo received fewer contracts in 2008, but Dominguez is not worried. He explained that the sector has already gone through crises in the 1980s, but "we have been able to redirect our business.

"We quickly became aware of the competition from Asian shipyards, especially in Korea, which have low labour costs and are able to turn out 20 standard cargo ships off the production line. So we decided to specialise."

Vigo now has nine medium-sized shipyards, all privately owned, producing specialised ships featuring high-technology equipment.

For example, they produce vessels for transporting chemical or toxic products, ships involved in oil exploration or for constructing oil platforms, each costing between 80 million and 130 million euros (100 million and 165 million dollars). Others produce luxury yachts.

"Unlike the Koreans, our ships are made-to-measure for our clients," mainly Norwegians, but also Germans and Italians, said Dominguez.

Another Galician shipyard, at the port of Ferrol, which is state-owned, specialises in military vessels, and receives orders from across the world.

The shipyards have also reduced their costs.

"Now, like 25 years ago, about 7,000 people work in the Vigo shipyards. The difference is that currently only 750 are permanent employees. The others work under contract," said Dominguez.

And the industry is still hiring: 1,500 jobs were created last year, and 1,000 more could come this year, providing a ray of hope for the many workers in the construction or automaking sector who have been made unemployed.

"But we don't want to create false hope," said Dominguez. "It's not a question of an automatic transfer of labour, we are looking for qualified workers, if possible with experience in the sector."

Training courses are planned to provide workers for this engine of growth for the Galician economy in a time of global crisis.

AFP / Virginie Grognou / Expatica

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