Wednesday, April 14, 1999 Published at 13:41 GMT 14:41 UK
Business: The Company File
Harland stays afloat
Harland and Wolff is back on the black
Belfast-based Harland and Wolff has provided a glimmer of hope in the otherwise depressed British shipbuilding industry, by announcing a return to profits.
The company has been focusing on building equipment for oil research vessels and converting and refurbishing oil rigs and won two big orders both worth more than £186m which boosted earnings.
It is hoping to return to building vessels for the Royal Navy for the first time since the beginning of the decade.
The shipyard has tendered to build two landing craft for the Royal Navy and is also trying to win work on two new aircraft carriers, as part of a consortium.
However Harland and Wolff chairman Fred Olsen and chief executive Per Nielsen have highlighted the problems caused to the global shipping and shipbuilding industries by the aggressive pricing policies of South Korean yards.
"Despite calls for action from many quarters, South Korean dock capacity is now being filled by offering prices for standard ships which are lower than the materials can be bought for in open international markets, leaving nothing for production, overheads or profit," they said.
They added that while they totally accepted assistance was necessary to the South Korean economy "it is unacceptable that support which is beneficial to South Korea is detrimental to the rest of the world".
Korean shipyards like Hyundai and Daewoo are now the busiest in the world with order books full for the next two years
Korean shipyards are cheap thanks to the devaluation of the Korean won after the Asian economic crisis.
But a trade row is brewing with the European Union.
THe EU also suspects that money from Korea's record breaking rescue by the International Monetary Fund is being used to keep bankrupt shipyards alive.
The Koreans however deny that they are using government subsidies to maintain over-capacity.
Axe hangs over Govan
However European shipyards continue to suffer from a decline in orders.
The troubled Anglo-Norwegian construction group Kvaerner has announced it is pulling out of shipbuilding and sell off operations in Norway, Britain, Germany and Finland because of spiralling losses.
In Scotland the move is putting at least 2,000 jobs at risk, as Kvaerner plans to sell its operations on the Clyde, including the Govan shipyard and its turbine plant at Clydebank.
The Company File Contents