Finnish maritime cluster flexing its muscles
The future of the Finnish maritime cluster looks bright. The majority of companies in the cluster believe that there are vast development opportunities for big and small players alike. They consider the ability to partake in global activities and networks and to rapidly take advantage of new business opportunities as key success factors. Equally important is the need to be innovative and to have the desire and ability to take risks. These are some of the findings contained in a recently published report – The Finnish maritime cluster: towards the 2020s.
The winds of change
Much has changed since 2008, a year that for many marks the starting point of a decline that characterised the maritime industry in Finland for several years. In is no coincidence that it also marked the start of the global financial crisis. The resultant recession affected ship orders, leading to closures and redundancies globally. In Finland, especially the Rauma shipyard was affected when its South Korean owner, STX, closed the shipyard down completely in 2013.
At the time, it was not uncommon to hear industrial and political commentators refer to the maritime industry as unprofitable and unsustainable, or that the sun was setting on it. As it turns out, these doomsday predictions were somewhat off the mark. The sector has, in fact, bounced back strongly and is undergoing a renaissance in many respects. It is showing itself to be robust and viable with an outlook that has improved markedly.
In addition to the global financial meltdown, the post 2008 period has also seen dramatic changes in the maritime industry’s operational environment. The same goes for shipowners and harbours that are faced with disruptive maritime transport, logistics and legislative changes that provide opportunities and threats alike.
During the period of slowdown in Finland, its marine cluster companies were forced to look abroad or to other industrial sectors for new customers. Many were successful in internationalising and diversifying their customer base.
A big growth driver in Finland was the German Meyer family’s acquisition of the Turku Shipyard from STX in 2014. Currently, Meyer Turku shipyard has a full order book that extends to 2024. A spin-off effect of the Meyer’s acquisition has been an increase in calls for offers from Germany. An example of the increased cooperation between Germany and Finland was the announcement on 28 July 2016 that Elomatic Ltd and Deltamarin Ltd (both from Turku, Finland) had signed an agreement with MW Werften for a Global Class mega cruise ship.
The Rauma shipyard has also re-invented itself with a new business model under the Rauma Marine Constructions banner. Offshore companies are, however, still suffering from the low oil price and a lack of investment.
Innovation a key future success factor
The report indicates that companies in the Finnish maritime cluster consider innovation to be one of the key drivers that will give them a competitive edge. Due to its sensitive and strategic nature, most companies do not outsource innovation, but rather do it in-house or keep it very “close” in their networks. It is noteworthy that for many respondents their extensive international networks and partnerships are significant when it comes to innovation development.
Foreign ownership in Finnish maritime cluster growing
The report also reveals that foreign ownership in the Finnish maritime cluster has grown since 2008. About 20% of the cluster is at least in part foreign-owned. The share these companies contribute to the total revenue of the cluster, however, was almost 70% in 2014. The growth in foreign ownership is an indication of the attractiveness of the sector, but also points to the lack of domestic capital in Finland.
The combined turnover of the Finnish maritime cluster has grown year on year since 2010 and the outlook is for this to continue. This is, in particular, due to the excellent situation in cruise ship con-struction, which is very positive beyond 2020.
The report points to several potential areas of future specialisation for the Finnish maritime cluster. These include, among others, arctic know-how, battery technologies and hybrid energy solutions. New business opportunities may also exist in innovative production chain approaches and maritime bio-economy related products. Digitalisation is a further area that should be exploited. The digitisation of shipbuilding, vessel operation and cargo handling, for example, is advancing rapidly.
Maritime cluster companies that are agile and quick to adapt to the changing environment will stand the best chance of seizing these future opportunities.
Source: ”Suomen meriklusteri kohti 2020- lukua”, Finnish Ministry of Economic Affairs and Employment
Leading image © Meyer Turku