Turkey’s shipbuilding sector saw a decline in exports in 2024 due to rising costs, difficulties in accessing finance and increased global competition, the Ekonomim news website reported on Thursday.
Despite increased global demand for new specialized ships for the purposes of the green transition towards climate neutrality. Turkish shipyards faced high costs and financing challenges in 2024, leading to a 1.4 percent drop in exports to $1.912 billion.
Cem Seven, president of the Ship, Yacht and Services Exporters’ Association (GYHİB), predicted a steeper decline in exports for the current year. “We foresee exports falling over 16 percent this year,” Seven was quoted as saying.
The sector is also facing increasing job losses. Turkish shipyards, global pioneers in high-tech, special-purpose vessel construction, saw exports surge 33 percent to $1.940 million in 2023. The country also overtook China as the world’s leading tugboat manufacturer while maintaining its dominance in fishing vessel production.
Northern European nations, particularly Norway, favor Turkish shipyards for their fishing vessels, according to the GYHİB’s Seven. The country excels in building factory fishing vessels, crab and krill fishing boats and specialized live fish transport vessels designed for extended operations in Norwegian fjords.
With rising labor costs and financing difficulties driving orders away from Turkish shipyards to competitors, particularly in Europe, exports declined 1.4 percent to $1.912 billion in 2024.
Despite the high demand for special-purpose ships worldwide following the green transition, “we cannot compete even with Spain on pricing,” Seven told Ekonomim. “The negotiations stall, and new contract signings have virtually stopped.”
A government regulation issued on October 31 eliminated the Value Added Tax (VAT) exemption on equipment imports and labor costs for export-focused vessels under 24 meters, including sailing boats, cutters, mooring and pilot boats. The move further weakened the sector’s price competitiveness.
Turkish shipbuilders faced mounting financial pressure after banking regulators restricted lira loans to exporters holding more than 5 percent of their balance sheet in foreign currency. Banking Regulation and Supervision Agency (BDDK) rules have forced the sector to rely on costlier foreign currency loans.
Employment has fallen more than 5 percent in the past three months as the industry grapples with eroding competitiveness.
According to 2024 figures cargo ships led Turkey’s shipbuilding exports in at $481.5 million. The top markets were the Marshall Islands at $168.5 million, followed by Russia with $67 million and Iraq with $49.7 million.
Yacht exports reached $442 million, an 8.52 percent increase from the previous year. Malta topped purchases at $93.3 million, while Greece and Italy followed with $85.4 million and $73.3 million, respectively.
Fishing vessel sales ranked third with $354 million. Norway led this segment with $198.5 million in orders, followed by Canada at $59.3 million and Germany at $57 million.
Turkish shipyards should focus on environmentally friendly and high-tech vessel construction to boost competitiveness and ensure sustainable growth, according to the “Ship and Yacht Building Sector’s 2023 Sustainable Export Action Plan.”
The sector aims to lead in electric/hybrid boat production by 2026 and alternative-fuel vessels by 2030, targeting net-zero emissions production and global leadership in specialized vessels by 2050.
Investment in technology and innovation, along with attention to worker welfare and environmental protection, are crucial to prevent export decline and achieve these goals, the plan states.