Thu, Dec 20, 2018 - Page 6 News List

Shipbuilders in Croatia struggle to stay afloat

ONCE-THRIVING:Analysts say that the port city of Pula’s four primary shipyards have failed to adapt to market trends as business has shifted from Europe to Asia

AFP, PULA, Croatia

Workers walk across the Uljanik shipyard in Pula, Croatia, on Nov. 12.

Photo: AFP

Late wages, mass strikes, scrapped contracts — Croatia’s once-thriving shipbuilding sector is sinking, a last gasp of the region’s communist-era industrial giants.

The towering cranes looming over the port city of Pula have been immobile for weeks as an eerie silence hangs over the shipyard, where hundreds of workers from Croatia’s biggest shipbuilding group, Uljanik, have been on strike for most of the past two months.

They took to the streets in October for a third time this year after not receiving September’s wages, but trickled back on Monday after announcing a temporary “pause” in their latest walkout to help out unhappy clients.

“The situation is bad, wages are late, people are leaving,” Orce Stojkovski, a 48-year-old shipfitter, said from the port on Croatia’s northern Adriatic coast.

“We are nearing a moment when there will be no one left to protest, let alone build a ship,” he said, showing photographs of an August demonstration and pointing out the colleagues who have since quit.

About a quarter of Uljanik’s 4,500 workers, divided across two dock areas, have packed their bags since January, mainly to seek work in other countries.

Meanwhile, clients from Canada and the Cayman Islands have canceled contracts for nine ships this year, deepening the woes of a debt-laden firm on the brink of bankruptcy.

The cancelations were over Uljanik’s “inability to deliver ... in line with contract terms,” according to statements published on its Web site.

It has been a painful unraveling for a company at the heart of an industry that used to be a source of pride for the whole of former Yugoslavia.

During their heyday in the 1980s, Croatia’s shipbuilders were a venerated group whose business was ranked third on the global market.

However, the 1990s independence war that helped spur the collapse of Yugoslavia, followed by a tough transition from a state-controlled to a market economy, took its toll.

Overstaffing, outdated technology, poor management and the lack of an overall industry policy have added to the dysfunction.

It is a familiar story across the Balkans, where state-run industrial giants in former Yugoslavia, from metals factories to automakers, have struggled to privatize and sunk into debt. Croatia now ranks 13th in the world order book with 0.6 percent of the market — a tiny sliver compared with the 80 percent market share controlled by China, South Korea and Japan.

An industry workforce of more than 21,000 during its peak has now shrunk down to 6,000 spread across the four main construction docks: Uljanik, 3. Maj (also owned by Uljanik), Brodosplit and Brodotrogir.

Restructuring Croatia’s shipping industry was a key plank in the country’s entry into the EU in 2013.

However, analysts have said that its four main shipyards have failed to adapt to market trends as business shifts from Europe to Asia.

The European docks still open have survived by pivoting to more sophisticated ships such as cruisers, after they stopped being able to compete with Asian giants on ships such as tankers or bulk carriers.

Some also diversified their production to include steel construction, wind farms or oil platforms.

“Ships once dominated by steel and work were replaced by ships dominated by technology,” economic analyst Damir Novotny said, but added that Croatia has been slow to upgrade its technology or invest in education.

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