Turku Shipyard’s supply orders almost doubled in two years
Meyer Turku Oy known as the Turku shipyard is a very important local operator in the economic area of Turku and in Southwest Finland. The regional impacts of the Turku shipyard extend to the whole country because even three-fourths of its direct supplier companies are domestic, the company says in a press release.
The combined turnover related to the production of the yard and to the production of its direct supplier companies is about EUR 1.9 billion which corresponds to a growth of 46 percent compared to the financial statement of the year 2016.
The value of supply orders to the shipyard has grown very strongly. It has almost doubled in two years (+ 84 %). The value of the supply orders was approximately EUR 933 million in 2018 when the corresponding figure in 2016 was approximately EUR 508 million.
The value of domestic supply orders of Meyer Turku increased by 64 percent to approximately EUR 638 million at the time in question. Correspondingly, the value of foreign supply orders increased by 150 percent to approximately EUR 295 million.
– Our order books extend for the moment to the year 2025, and the amounts reflect well the growth in our production. We can expect that the growth continues also in the following years, states Deputy Yard Director of Meyer Turku, Tapani Pulli.
Despite the differences in the values of the supply orders, the amount of supplier companies has remained nearly unchanged. In 2018, the shipyard had a total of 1,246 direct supplier companies out of which 927 were domestic and 319 were of foreign origin.
– The direct supplier companies, on the other hand, have their own subcontractor network. The companies which belong to the subcontractor network represent 109 Finnish municipalities which corresponds to one third of all Finnish municipalities. Correspondingly, there are foreign subcontractors around the world. This means that an increase in the production of the shipyard benefits the companies of all sizes and in different fields despite the territorial boundaries, specifies Senior Researcher Tapio Karvonen from Brahea Centre at the University of Turku.
The largest target country of the supply orders was Germany after Finland which made 72 percent of the value of the foreign supply orders. In domestic supply orders, the focus in the euro-weighted orders was in Southwest Finland (48 %), and specially in Kaarina (27 %). In case of domestic supplier companies, there was an even division between Uusimaa and Southwest Finland, each with a 40 percent slice.
– The strong growth of the proportion of Germany is explained by the fact that we have received FERU (Floating Engine Room Unit) for the cruise ships from the shipyard of Meyer in Rostock. Similarly, the large proportion of Kaarina is mainly explained by the strong growth of the cabin module factory of Piikkio Works, explains Pulli.
Meyer Turku is the fourth largest employer in Southwest Finland after the City of Turku, the University of Turku and Valmet Automotive. Meyer Turku is the second largest industrial employer.
The activity of the shipyard employs directly about 4,100 persons and indirectly 4,000 employers counted in annual work units. In two years, the annual work units (AWU) increased by 28 percent in direct employment, and by 54 percent in indirect employment.
The impact on the general employment is even greater but it was not possible to clarify the impact of foreign companies and secondary suppliers on the employment within the framework of the study.
– A good rule of thumb for calculating the effects on the employment of the yard is the production formula where about 20 percent of one ship’s productions process is done by the shipyard’s own personnel and the remaining 80 percent by the supplier network, Karvonen instructs.
The regional economic impacts of employing own personnel focused 96 percent in Southwest Finland, and especially in Turku (88 %). As a result, most of the tax revenue effects concentrated in the municipalities in southwestern Finland
However, the biggest amount of corporation tax accrued in Uusimaa. The effects on employment are in practice almost in the same level with Southwest Finland, and the share of Uusimaa as the economic area of Meyer has increased clearly since the previous research study.
– The yard stimulates the development of the labour market in the positive direction in the Turku region and in the whole country. Strong professional skills, reliability and a special supplier network are strengths which are appreciated even in international contexts, states Minna Arve, Mayor of the City of Turku.
As a part of the survey, the supplier network of the yard was asked to specify the skill needs. Responses to the survey question on skill needs were received from 57 companies of different sizes and fields. Two thirds of the companies who responded to the survey has recognised needs in skills which were mostly related to HVAC and electric technology, welding and project management.
Three fourths of the 52 companies who answered to the survey question on labour shortage told that companies need more experts. According to the responses, there is mostly lack of plate-welders, HVAC and electrical designers, project managers and foremen.
– According to the forecasts, the increase in the direct personnel of Mayer Turku continues to grow in the next few years but the increase will get more stable after that. According to the forecasts, the yearly number of recruitments will remain at a high level because of the age structure of the shipyard. Especially the need for highly educated labour will be accentuated in the future. The variation related to the workload of the project work will be stabilized with the network of supplier companies and the amount of personnel in the supplier network is also likely to grow, Karvonen summarizes.
The new degree programme in technology, mechanical and material engineering beginning in autumn 2020 at the University of Turku will respond to the need of specialized personnel in the maritime industry. The own shipbuilding school of the Turku shipyard provides also a fast path to the specialization in the field by offering courses in recruiting training, additional training, complementary training and conversion training as well as individual courses.
The City of Turku and Meyer Turku Oy ordered the survey from the Brahea Centre at the University of Turku in autumn 2019 which was scanning the regional economic impacts of the Turku shipyard and its supplier network. The research study also includes comparison with the results of the survey conducted in 2017.
The survey was primarily prepared using financial and other statistical material, but data was also collected through surveys directed to the supplier companies of the shipyard. The key financial figures are mainly from the year 2018 but also some data from the year 2019 was used in part of the examined impacts.