The Greek-owned fleet is about to change. It is taking the lead in newbuilding orders with close to 22 percent of total orders placed in 2002. It is striking how the Greeks see new business opportunities in a volatile market.

Shipping is one of the top three most lucrative sectors in Greece. Foreign exchange earnings from shipping increased from 1.7 bill US$ in 1990 to 8.1 bill US$ in 2002. Newbuilding orders the past three years has amounted to twice Greece's national budget. The banks are pumping millions of dollars into the industry and the government offers new measures to stimulate tonnage repatriation to the Greek flag.

The high level of interest from the Greek owners might be an indication that newbuilding prices have reached their lowest level and is about to turn. It is also interesting to note that the price for 2nd hand tonnage price is peaking, which favours investments in new tonnage. Other important reasons behind this are the need to renew an ageing fleet, pressure from international shipping bodies and authorities to ban old tanker tonnage and the quality drive from owners to gain competitive advantage.

Ship finance growth
Greeks have traditionally been engaged in the 2nd hand sale and purchase of vessels. During the past 4 - 5 years, they have launched a massive newbuilding programme. The average age of the Greek fleet in 2002 was 15.9 years in terms of grt, a considerable drop from 17.4 years in 2000. During 2002, 123 new ships entered the Greek flag with an average age of 5.5 years, whilst 150 vessels with average age of 27.5 years were deleted from the registry.

According to Tradewinds, Greek ship finance has grown the past year by some $5bn and the number of banks scrambling to lend to Greek owners has increased. By the beginning of this year, lending to Greek shipping companies has increased to 21.26 bill US$ from 16.5 bill at the end of 2001. The number of banks involved jumped from 40 to 51.

Promising tax discounts
The Greek authorities are now calling for tonnage repatriation to the Greek flag by those still operating foreign flags. The challenge is to convince them of the advantage of flying a flag that is on the white list of the Paris MOU. The authorities are offering a new package of measures such as a new round-the-clock support service for Greek-flag ships, tonnage tax discounts for newbuildings and possible for ships up to five years old, and an overhaul of the national maritime education system.

South Korean orders
DNV has the biggest share of contracted newbuildings for Greek-owned vessels in 2002. DNV's share of contracted tonnage is close to 35 percent or 1.75 mgrt followed by ABS 31 percent and LRS 28 percent. The owners choosing DNV have almost exclusively ordered at South Korean yards.

Date: 2003-03-04