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Gdynia Shipyard Group

Stocznia Gdynia SA
ul.Czechoslowacka 3
81-969 Gdynia
Poland
Tel. + 48 58 627 15 00
Fax + 48 58 627 08 79

The Gdynia Shipyard Group, once the biggest Polish shipbuilders, began its activities in November 1922, under the name of "Stocznia w Gdyni" Limited Guarantee Company. The first vessel fully designed and built by the Gdynia shipyard was the "Samarytanka", a steel motor boat made in 1931, commissioned by the Maritime Office in Gdynia. Construction of the sea-going vessels began in 1938 when the keel was laid for a 67 m long, steam-driven, single-screw general cargo ship with ice reinforcements. During World War Two, the Gdynia shipyard was taken over by the German company Deutsche Werke Kiel AG, which set up here a repair base for Kriegsmarine vessels, and then a submarine building center.

After the second world war the name was changed to "Paris Commune Shipyard" and the Soviet Union became one of the premier customers initiating the first shipbuilding boom in the late 1950s and early 1960s. During its post-war history, the Gdynia shipyard built over 630 vessels of various types and sizes, with a total tonnage over 10.3 million DWT. Nearly all of them were designed by the shipyard's own design and construction office. In 1952 the m/s ?Melitopol?, a general cargo vessel of B-53 type, was put into service. It marked the beginning of a new era in the shipyard's post-war history. The first work which the Gdynia shipyard designers completed entirely on their own was the m/s ?Goplana?, a general cargo vessel of B-57 type.

As a result of modernization conducted in the years 1959-1963, an up-to-date hull construction department and the first dry dock were created. Construction of bigger and bigger ships began, including general cargo ships (11.6 thous. DWT), tankers (up to 20 thous. DWT), and bulk carriers (up to 55 thous. DWT). In February 1975, a flag was hoisted on the first one hundred thousand DWT vessel built by the Gdynia shipyard. In October 1976 the shipyard started operating the second dry dock which made it possible to build vessels with a deadweight reaching 400,000 DWT. In the late 1970s and early 1980s, the Gdynia shipyard was one of the most modern shipbuilding enterprises in Europe.

The shipyard's history is not only about launching successive vessels. A separate chronology is marked by the scale of difficulty in building them. The development of the shipyard enabled it in the mid 1970s to start construction of the LPG carriers, vessels designed for transport of liquefied petroleum gas in the temperature of -48 degrees Celsius in tanks with a capacity of 75,000. cu. m. The Gdynia shipyard can also be proud of other technologically advanced products which were created here, including the specialized fish processing trawlers, oil/bulk/ore (OBO) carriers, passenger ships, state-of-the-art container ships, floating docks, tankers, as well as multi-purpose RO-RO ships or the so-called car carriers.

Many ships built in Gdynia were put on the ranking lists of classification societies, while 15 vessels built from 1993 onwards received the prestigious name of a ?Significant Ship? awarded by the British ?Naval Architect? magazine. Among the buyers of the vessels built by the shipyard were the shipowners from Poland, Russia, Norway, Germany, USA and Hong-Kong.

In 1991 the yard was renamed Gdynia Shipyard JSC. After it was on the verge of bankruptcy and had to be bailed out by the Government, it was under the ownership of the Ministry of State Treasury. The birthplace of Solidarnocs ? Gdansk Shipyard ? was taken over by Gdynia Shipyard and the Gdynia Shipyard Group was formed. The Gdynia Shipyard took over the Gdansk shipyard after it went bankrupt in 1996 and moved the shipbuilding works to Ostrw island. The new Gdansk district, developed on a neglected and dilapidated post-shipyard area, is meant to become the new heart of the Tri-city metropolis.

In mid 1999 there were speculations that Gdynia Shipyard might take over Finland's Masa Yard belonging to the Kvaerner Group a "David versus Goliath" action being in sharp contrast to the financial strength and consolidation of the Group. The shipyard in Gdynia laid off 600 employees by the end of March 2002 due to economic recession, PAP reported on 19 November 2001, quoting shipyard spokesman Miroslaw Piotrowski. Piotrowski explained that the cut was expected to reduce shipyard costs by some $10 million annually, adding that all fired workers will be offered retraining at the expense of the shipyard. The Gdynia shipyard employed 9,250 people.

Gdynia Shipyard was the number one in Europe in 2003 and in 13th position in the world in terms of production volume in cgt - compensated gross tonnage, well ahead of shipyards like Dalian, Odense, Kawasaki, Hudong or Mitsui. In 2004 the Gdynia Shipyard Group fell behind Dalian, Odense, Kawasaki and Hudong now ranking on 18th position. By 2005 the workforce of Gdynia shipyard was 6250. In August 2006 The ruling Law and Justice separated the cradle of Solidarity, Gdansk Shipyard, from Gdynia Shipyard. The state-owned Industrial Development Agency (ARP) signed a deal with Gdynia Shipyard that will allow it to take over the Gdansk Shipyard, previously owned by the Gdynia plant.

On 06 November 2008 the European Commission concluded, following four years of investigation, that state aid granted to Gdynia shipyard and Szczecin shipyard gave rise to disproportionate distortions of competition within the Single Market, in breach of EC Treaty state aid rules, and must be repaid. The Commission simultaneously agreed to accept commitments from Poland for the implementation of the decisions in a way that will quickly create opportunities for viable and sustainable economic activities at the Gdynia and Szczecin sites and so maximise the number of sustainable jobs there. Since 2002, Gdynia Shipyard benefited from various aid measures (in particular capital injections, loans and tax write-offs) amounting to €700 million and from production guarantees of €916 million (both in nominal value).

On 6 January 2009, the Act of 19th December concerning compensation proceedings in the entities of the particular importance for the Polish Shipbuilding industry (hereinafter referred to as the "Act"), was introduced. The Act defines detailed rules, conditions and procedure of the compensation proceedings, the objective of which is the sale of assets of Stocznia Gdynia S.A. (hereinafter referred to as "The Company" or "The Shipyard"), in order to secure the claims of the Shipyard's creditors. The government placed Stocznia Gdynia into bankruptcy because it required constant subsidies.

On 22 December 2009, the District Court in Gdansk announced the bankruptcy of the shipyard following negotiations between the shipyard's management and its creditors. 213 workers have already been given notice and another 30 or more will be dismissed in April 2010 leading to a total of at least 250 redundancies. A further 100 workers will be offered voluntary departure. The shipyard, that employed around 1250 people before the bankruptcy, produces containers, product tankers, harbour tug boats, floating cranes and patrol crafts. The bankruptcy was declared in order to achieve some agreement between the company and its creditors. This is an opportunity to pay off the debts of the company, abolish some debts or postpone maturity. No liquidator was appointed by the court but previous management remains in charge.

On 9 February 2011, Stocznia Marynarki Wojennej, a shipyard in Gdynia, announced the dismissal of 400 employees. The main reason behind the workforce reduction is the critical financial situation of the shipyard. The redundancies are expected to start in April 2011 and will mainly affect administrative staff across all departments. The shipyard employs 1068 people.

On July 25, 2012 the European Commission concluded that a PLN 150 million loan (around € 37.5 million) granted by the State-owned Polish Industrial Development Agency (IDA) to Crist Shipyard was in line with EU state aid rules. The Commission found that the loan was granted on market terms and therefore did not give Crist an undue economic advantage. As a result, the loan did not constitute state aid in the meaning of EU state aid rules. The Commission's investigation found in particular that the information on the basis of which IDA granted the loan to Crist was such that a private investor would have come to the same decision. The Commission also found that the interest rate of the loan corresponded to a market rate and that the level of collateral covered well the credit risks.

Financial support was given by the public Agencja Rozwoju Przemyslu S.A. (Industrial Development Agency, or "IDA") to two Polish shipyards, which purchased assets of the Gdynia shipyard. On completion of the second tendering round, Nauta S.A. Repair Shipyard ("Nauta") bought three asset bundles of the Gdynia shipyard. In consideration for financing Nauta's purchase transaction, IDA subscribed to bonds issued by Nauta. These bonds should have been redeemed from IDA with the proceeds of the sale of land on which Nauta is currently operating. Until now, Nauta has still not sold this land and can therefore not redeem the bonds subscribed by IDA. IDA consequently agreed with Nauta to prolong the redemption of bonds until November 2013 under new conditions. The Commission considers that there are two possible State aid measures in favour of Nauta: the first measure consists of IDA's support to Nauta in consideration for bonds issued by Nauta and the second concerns the prolongation of the period to redeem the bonds.