Netherlands Shipbuilding Companies
At the end of the Cold War the Netherlands had three shipyards supporting the Royal Netherlands Navy. Royal Shipbuilding Company Schelde produced surface warships, while Merwede Shipyard B.V. built auxiliaries. Both of these yards also had commerical product lines, enjoyed success in the foreign military sales market, and continued to built ships for the Royal Netherlands Navy after the Cold War ended. The Rotterdamsche Dry Dock Company (RDM) had produced submarines for both the Netherlands and other international customers, but in the absense of commercial product lines to sustain the company, the failure to obtain new submarine orders from either the Netherlands or international customers [none of whom seemed to be eager to be the launch customer], led to the demise of the company in 2004.
The history of the Netherlands is a history of missed opportunities and of opportunities deliberately thrown away. The Dutch had greatness and power, wealth and colonies, happiness and empire in their grasp; but, actuated by short-sighted selfishness, they neglected their chances. The great commercial nations of the world have always fought among themselves for their trade, as may be seen from the numerous bitter trade wars between Venice and Genoa, or between the English and the Dutch. The economic and political greatness of the Netherlands was based on fish. Great political and economic events often spring from very small causes. An obscure Dutch fisherman, one William Beukelszoon of Biervliet, whose name is known hardly to ten English people, laid, towards the middle of the fourteenth century, the foundation of the political, commercial, maritime, and colonial supremacy of the Netherlands — by discovering a method of curing and barrelling herrings, which they could sell throughout Europe.
During the second half of the fifteenth century the industries of the Dutch continued to expand, owing to the diligence, energy, and thrift of the people. Great mechanical improvements were introduced in all the industries, especially in shipbuilding, and labor-saving machinery driven by wind, which placed the Dutch in the forefront among manufacturing nations, came into general use. The fisheries flourished, and the naval power of the Netherlands continued to grow with the expansion of Dutch trade, for in the olden days a merchant ship could easily be converted into a man-of-war.
The Dutch became a world-empire of the first rank, and, in their time, they held a position similar to that which was later held by the British Empire. In the earlier part of the seventeenth century there seemed to be every prospect that Holland would soon attain an undisputed position as the predominant Power, not only in European waters, but in the East and West Indies as well.
The enormous extension of their trade led to a corresponding increase of their shipping, and the marine of the Netherlands became foremost in the world. Dutch ships were found on all seas, shipbuilding was developed in Holland to the highest degree of perfection, and Dutch shipbuilders built not only for Holland but for all other countries as well. Grotius tells us that towards the end of the sixteenth century the Netherlands built two thousand new ships every year, while Sir Walter Raleigh wrote " the Low Countries have as many ships and vessels as eleven kingdoms of Christendom have, let England be one, and not a timber-tree growing in their own country."
Tsar Peter the Great came to the Netherlands in 1697 to study the Dutch shipbuilding industry. With a view to advancing his naval projects, Peter about this time sent a large number of young Russian nobles to Italy, Holland, and England to acquire in those countries a knowledge of naval affairs, forbidding them to return before they had become good sailors. Not satisfied with thus sending to foreign parts his young nobility, Peter formed the somewhat startling resolution of going abroad himself, and learning the art of ship-building by personal experience in the dockyards of Holland. Accordingly, in the year 1697, leaving the government in the hands of three nobles, he set out incognito for the Netherlands. Upon arrival there he proceeded to Zaandam, a place a short distance from Amsterdam, and there hired out as a common laborer to a Dutch ship-builder. Notwithstanding his disguise it was well enough known who the stranger was. Indeed there was but little chance of Peter's being mistaken for a Dutchman. The way in which he flew about, and the terrible energy with which he did everything, and his " everlasting questions," " What is that?" " How does that work?" set him quite apart from the easy-going, phlegmatic Hollanders. To escape the annoyance of the crowds at Zaandam, Peter left the place, and went to the docks of the East India Company in Amsterdam, who set about building a frigate that he might see the whole process of constructing a vessel from the beginning. Here he worked for four months, being known among his fellow-workmen as Baas or Master Peter. From Holland Master Peter went to England to study her superior naval establishment. Here he was fittingly received by King William III., who had presented Peter while in Holland with a splendid yacht fully armed, and who now made his guest extremely happy by getting up for him a sham sea-fight.
The Dutch shipbuilding industry was, towards the end of the seventeenth century, apparently much better organised than in England through careful specialisation, standardisation, division of labor. The industrial and commercial backwardness of England, lack of economic organisation and consequent dearness of money, had the natural result that much of the Dutch trade, which England had conquered from the Netherlands in war, was again lost by them to the Dutch in time of peace. But at the end of the seventeenth century economic England was awaking, and soon she was to become a terrible competitor to the Netherlands.
While the whole world pursued the policy of Protection the Dutch preserved their policy of Free Trade, and endeavoured to fight with Free Trade the protective tariffs of their competitors. The Dutch were bound to be defeated in their struggle, because foreign nations not only prevented them from selling in the dearest, but also from buying in the cheapest, market.
The fishing industry was the greatest and the wealthiest industry of the Dutch. It formed the basis of their national prosperity and of their armed strength, and occupied the same place in the economic system of the Netherlands which agriculture occupied in Great Britain at the time when England was the foremost agricultural country in the world. Fishing in the one case, as agriculture in the other, provided the country with food and warlike men. This being the position of the Dutch fishing industry, it had to bear the first and the most vigorous attack of other countries, and the effect of universal State-aided competition upon the protected Dutch fishing industry was disastrous. In Sir Walter Raleigh's time 8,000 Dutch boats were engaged in fishing. Towards the end of the seventeenth century only 1,600 ships were so occupied. In 1786 only 219 herring boats left the Dutch harbors. In 1747 this number was reduced to 200. In 1765 only 160 herring boats went out to sea. The enormous Dutch fishing industry, ' the greatest gold-mine in the world,' as it used to be called, which had been the admiration and the envy of the universe, had been killed by foreign government-aided competition.
Unable to sell their goods and to buy their raw materials at fair prices, the Dutch manufacturing industries rapidly declined. Competition with the powerful and flourishing State-aided industry of England, France and other countries became impossible, the neutral markets were lost, and even the Dutch home market was invaded and ruined by foreign manufactures. The celebrated Dutch industries withered away like a tree deprived of its roots. The Netherlands ceased to be the workshop of the world, and even their own workshop, for the Dutch became dependent on manufactured articles made abroad.
When fishing became unprofitable an enormous number of people engaged in that mighty industry were reduced to beggary, and had either to turn to some unskilled employment or to emigrate to those countries which artificially fostered the fishing trade. By the wise and energetic economic policy of England, France, and other countries, many unemployed Dutch fishers and their boats were attracted to those countries, and the Dutch lost not only an enormous wealth-creating resource, but also a very large number of their ablest seamen.
The disappearance of the fishing industry and the decay of the Dutch manufacturing industries naturally led to a great shrinkage in the quantity of raw material imported into, and of manufactured goods exported from the Netherlands. Fewer ships were needed for carrying on the country's trade; the celebrated Dutch merchant-marine declined, as did also the enormous shipbuilding industry of Holland, which had formerly constructed more ships than all other countries combined, and supplied the universe with ships. The shipbuilding industry and its subsidiary industries naturally followed the manufacturing industries to foreign countries.
The industry remained stationary for a very long time. A ship built in 1612 did not ditf ;r essentially from one built in 1812. It was not until the sails were succeeded by wheels and screws driven by steam that the construction changed entirely and developed quickly. During the last twenty-five years of the 19th Century, the progress made in shipbuilding was immense.
By the year 1900, the Netherlands had the following shipbuilding yards: Boon, Melema & de Cuyk, at Hoogezand, which had already built 221 ships, among others the steamer Carolina Johanna, for the Java coasting trade. Botje. Ensing & Cie., at Groningen, which had built 56 steamers, of from 6 to 80 horsepower, 6 for German and English account. The Royal Dutch Iron Works at Leyden furnished ships for interior navigation, among others a saloon boat for Rhine navigation in Germany, besides ship engines, anchors, chains, etc. The Royal Society de Schelde, for the construction of ships and manufacture of machines at Flushing, furnished war ships, torpedo boats, mail steamers; between 1876 and 1897, it supplied the Dutch navy and the colonies with war ships and torpedo boats having a total tonnage of 13,633 tons and 43,738 horsepower. The Feyenoord Company at Rotterdam, for shipbuilding and engine manufacturing, built many freight steamers and several men-ot-war and cruisers. E. J. Smit and bon, at Hoogezand, constructed steel steamers and sailing vessels. L. Smit & Son, at Kinderdyk, known for their steel steamers and sailing vessels, construct mail steamers and ocean tugs and electric boats. Besides the machine factory, The Yssel, at Kampen, the shipbuilding yard The Maas, and the machine factory formerly B. Wilton, at Rotterdam, the firm Job. Kievits & Van Reede at Papendrecht, and H. E. Wiegerink & Cie., at Nyrnegen, constructed steamers and sailing vessels for interior and sea navigation, and a great many smaller shipyards construct barges and lighters for inland and Rhine traffic.
In spite of five months of war, in 1914 Holland launched 658 vessels of 289,234 tons, or over 27,000 tons above the output of the previous year, 1913. The number of vessels water borne in 1914 was 56 less than in 1913, although the tonnage was greater, and this fact indicates that a larger type of vessel was being constructed in Dutch yards. The output was almost exclusively mercantile. Such firms as the Nederlandsche Scheepsbouw Maatschappij, of Amsterdam, the Rotterdamsche Droogdok Maatschappij, and the Koninklijke Maatschappij "de Schelde," of Flushing, turned out noteworthy boats during the year, both in size and propelling machinery. The Naamlooze Vennootschap "Werf de Noord," of Alblasserdam, with its building berths and workshops, its electric floating dock and other accessories, was a well-equipped yard.
The Royal Factory was set up in 1845 to build steel ships. By 1890, the factory went into restructuring continuing as Werkspoor, while the shipbuilding division flourished as DNS. It moved to the North quarter where it became the neighbour of the Dutch Dock Company. The two wharves eventually merged to form NDSM, the Dutch Dock and Shipbuilding Company. It did not escape the ship building industry realignment. As part of the Verolme group, NDSM was split up again in the 1970. By 1984, the Dutch Shipbuilding Company failed. A few years later, the struggling Amsterdam Dry Dock Company also shut down in bankruptcy.
By 1918 Dutch shipbuilding firms were handicapped by shortage of materials and by the severe conditions which the German authorities — while they had the power — imposed upon them as conditions of business. Holland at the end of 1918 suffered from being unable to obtain steel and other materials from Germany. Neither could Dutch shipbuilders look to the United Kingdom for more than a small proportion of their requirements, while the plans for native steel-works, of which a good deal was heard during 1917, had not materialized. In these circumstances a large output was not to be expected. Yet a considerable number of cargo steamers had been turned out.
By 1921 Dutch shipbuilding was in rather weaker position than the industry in other great shipbuUding countries, and that the great boom in the industry in the Netherlands which had characterized it in the past four years had passed. The greatest volume of business in the Netherlands yards was witnessed in 1919- in which year there was a record tonnage under construction and tonnage launched.
The shipbuilding industry in the Netherlands reached its post WW-II top capacity at the end of the sixties, with a workforce of about 50,000 employed in shipbuilding only. The downfall of the shipbuilding industry in West-Europe in the early seventies and the following restructuring has put an end to the building of ships above 20,000- 25,000 CGT in the Netherlands and reduced significantly the number and the total capacity of its shipyards.
NDSM, the Dutch Dock and Shipbuilding Company, did not escape the ship building industry realignment. As part of the Verolme group, NDSM was split up again in the 1970. In the late 1970s, help to prevent the collapse of the Dutch shipbuilding industry led to a massive political and financial scandal, known as the RSV affair. The government of the day put €2.2bn into the RSV wharf which went bankrupt in 1993. Since then, the government has let flagship companies such as airline maker Fokker go bankrupt. By 1984, the Dutch Shipbuilding Company failed. A few years later, the struggling Amsterdam Dry Dock Company also shut down in bankruptcy.
As of the mid-1990s the shipbuilding and ship repair industry consisted of some 100 enterprises with a workforce of about 10,000, of which about 4,000 are involved in the building of sea-going ships. Most shipyards are small- and medium size enterprises with the largest yards having a maximum capacity of about 20,000 CGT per year. Yet, the total output of the shipbuilding industry in the Netherlands in the year 1992 amounted to more than 400,000 CGT. Such an output indicates a much larger workforce.
Shipyards in the Netherlands rely on a flexible infrastructure of subcontractors, colleague yards and manpower pools to temporarily increase their capacity. In addition, the industry has developed some unique concepts with respect to marketing and to facilitating enterprises for design and engineering, partial work preparation, parts fabrication, hull erection and outfitting.
The shipbuilding industry in the Netherlands is strongly technology oriented and will be capable of main ta ing its competitive position as long as it can innovate and maintain a high level of maritime technology which can be incorporated in the kind of ships it builds. The factors price, delivery time and quality can be handled in different ways to obtain the best possible combinations with respect to the market and to the abilities of a shipyard. If a yard limits itself to only one factor, it could be placed in a vulnerable position.
In late 2003 the Netherlands Shipbuilding Industry Association (VNSI) warned that it needed at least a further E 60m ($67.2m) government subsidy if it is to secure E 1bn worth of orders. Ruud Schouten, managing director of the shipbuilders' association, said the yards had welcomed the E 60m the government granted recently.
The Dutch shipbuilding industry booked a turnover of six billion euros in 2006, nearly 25 percent up from the previous year. By 2008 the Dutch shipbuilding association estimated it needed to fill 2500 places in the Netherlands, while there are over one hundred empty posts annually going vacant. In 2008 the yards received orders for 101 ships with a total value of 450 million euro (2007: 100 ships, 590 million euro). 182 vessels worth 810 million euro have been delivered (2007: 149 ships, 920 million euro). The order book as of 31st December 2008 stood at 84 ships with a total value of 560 million euro (2007: 149 ships, 906 million euro).
Europe is still a major player in the global shipbuilding industry, despite a shift in production of new ocean-going vessels in recent decades, first to Japan, then to South Korea and most recently to China. Whilst by volume, Europe’s market share is now only around 15% of the global total, Europe remains in a leading position in value terms of civilian ships delivered, worth around 30% of the total, or €15 billion in 2007.
Although in the past few decades there have been many closures and workforces are reduced, there are still about 150 large shipyards in Europe, with some 120 000 directly employed. Significantly, in some coastal areas, there tend to be few alternative major sources of employment. Beyond the shipyards, a further 750 000 jobs in the marine equipment industry directly or indirectly depend on shipbuilding. This covers suppliers of everything from steel plate, to engines, to safety systems, to electronic communications and navigation equipment, to cabin furnishings.
Globally, the shipbuilding industry (aside from the design and building of naval vessels) is the subject of significant government subsidy, with the result that European yards face unfair competition. There are also significant barriers to enforcing European patents on ships built elsewhere, and so European firms may suffer infringements of their intellectual property rights.
In response to the economic turbulence following the 9/11 attacks, the EU developed the LeaderSHIP 2015 strategy for the shipbuilding sector, seeking to strengthen its competitiveness in the global market. In the period from 2003 up until the economic crisis struck the sector in 2008, the strategy had much success. European yards’ orders more than tripled in value between 2002 and 2005; growing at a faster rate than those of any other region. But while it achieved important results, LeaderSHIP 2015 needed to be reviewed to ensure it is fit to address the new economic crisis.
Recent years have seen huge increases in the number of ships ordered – particularly of the tanker, bulk cargo and containership types – many by financial speculators rather than traditional ship-owners. Indeed, many shipyards across the world still have a backlog of orders to deliver in the next two to three years. But since the end of 2008, new orders have fallen close to zero across all ship types. The amount of cargo carried around the world has dropped off dramatically. Many ship-owners are laying up vessels for the long term because there is no business for them, so they now have little interest in bringing new ships into their fleets. Some orders will be cancelled, and some yards will complete vessels and find their buyers can no longer finance the purchase.
Indeed the financial crisis has brought a new problem for the shipbuilding industry, one which was much less significant in 2001-02. Traditionally, shipyards receive a relatively small down-payment, with the balance of around 80% of the price only paid when a ship is delivered. The yards therefore typically fund the building, paying workers, suppliers and sub-contractors through a bank loan. Similarly, ship-owners would fund the purchase with a loan, to be paid back from the revenue from carrying cargoes. The collapse of cargo rates means banks will lend much less. Finding new means to finance ship construction and purchase in the context of a much more cautious financial sector is therefore essential.
Significantly, the economic boom now ended also brought massive additional shipbuilding capacity in Asia. Whilst it was mainly intended to build relatively simple tankers, dry-cargo and container carrying vessels, in the absence of orders in those sectors, many yards in the region will be seeking whatever business they can get. European yards are currently strong in more technically advanced sectors such as cruise ships, ferries and private yachts, off-shore supply vessels (used for example in the North Sea oil and gas industry), dredgers and specialist ships such as wind-turbine installation barges or cable layers. But they can soon expect to face renewed, low-price competition in these sectors, much of it with government support explicitly enabling their competitors to reduce their prices.
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