French shipyard lands billion-euro luxury liner contract

28th December 2012, Comments 0 comments

Officials hailed some rare good news for France's struggling economy on Friday after an ailing shipyard landed a billion-euro contract to build a luxury liner for a US cruise company.

The deal comes as a lifeline to the STX France shipyard at Saint-Nazaire on the Atlantic coast, which had struggled to secure major new orders in recent years.

Miami-based Royal Caribbean International said it was ordering a sister ship to its two top-of-the-line cruise liners, the Oasis of the Seas and Allure of the Seas, to be delivered in mid-2016, with an option on a second vessel in mid-2018.

Officials said the contract was worth in excess of one billion euros ($1.3 billion) and would represent more than 10 million hours in work over three years for the shipyard and its sub-contractors.

Following a slew of recent announcements of job cuts, Prime Minister Jean-Marc Ayrault said the contract was a sign that France's industrial sector was recovering.

"France is showing its capacity to win the battle for the recovery of its industry and exports," he said in a statement, praising "the excellence of French know-how in naval construction".

"We are very satisfied," STX France chief executive Laurent Castaing told France's I-Tele. "The competition with Finland was fierce."

Speaking to AFP later, he said the company hoped to begin hiring technicians and engineers very quickly, though he did not want to give precise numbers, and that the order would help local sub-contractors.

The contract is also expected to have knock-on benefits for other France-based companies, including automakers PSA and ArcelorMittal -- itself recently at the centre of a high-profile political row over the threatened closure of one of its steel plants in the east of France.

The company's two other Oasis-class liners, built in Turku, Finland, cost 900 million euros each according to the trade press. They were delivered in 2009 and 2010.

The STX France yard employs 2,100 people, supporting another 4,000 sub-contractors.

Studies will start in January 2013 while construction is planned to start in September.

"We are extremely proud to have been selected by Royal Caribbean International to build this third unit," Castaing said. "The ship is a real exception in the cruise world as it is highly innovative and spectacular."

Royal Caribbean said its capital spending would be $1.3 billion for 2012; $700 million in 2013; $1.2 billion in 2014 and in 2015; and $1.3 billion in 2016.

The two existing Oasis-class liners are the largest cruise ships in the world, boasting 16 decks and each able to carry 5,400 passengers.

They have a range of facilities including a swimming pool with a wave machine, rock climbing walls, a full-size basketball court and an ice skating rink. Both ships are based in Florida.

STX France is two-thirds owned by STX Europe, which is a subsidiary of South Korea's STX Shipbuilding. The other third is owned by the French state.

Earlier this month, Finance Minister Pierre Moscovici had promised to save the Atlantic shipyards by bringing in new contracts.

The Saint-Nazaire shipyard built the transatlantic liners Normandie in 1935 and France in 1960 and the Queen Mary 2 in 2002.

© 2012 AFP

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