The ship repair market - France

1.2 Repair and maintenance play an important role in the shipbuilding industry

on a global scale, the ship repair and maintenance industry is estimated by future market insights to be a $**.* billion market in ****. This same market is expected to grow at a CAGR of *.*% over the ****-**** decade, to reach $**.* billion . this activity is part of the larger naval industry family, which breaks down into several distinct sub-industries. Several categories are often mentioned, as shown in the chart below: merchant shipbuilding, defense shipbuilding, ship maintenance and repair, and offshore activities. In France, the shipbuilding industry's main activity concerns merchant ships.

Breakdown of shipbuilding industry activities France, **** Source: ****

at European level, more detailed data is available, providing an overview of the European shipbuilding and ship repair market.

European shipbuilding and ship repair market Europe, ****, % Source: GICAN Source: ****

Europe's shipbuilding industries employ over ***,*** people for a market worth €*** billion in ****. However, the breakdown of the market reveals differences with the global market. Indeed, as we can see from the graph above, the share of defense ship maintenance is greater than that of civil ship maintenance.

1.3 A fairly stable domestic market, driven by the French Navy

It is possible to represent the evolution of sales in the repair and maintenance sector between **** and ****, using data from theINSEE. As we can see from the graph below, sales have been rising slightly since ****, with a more substantial increase in **** (***), before picking up again in ****. The year **** looks set to get off to a good start, with a provisional result between January and May of ***.* million euros, i.e. approximately half the **** sales figure for the fifth month of the year.

Sales trends in the ship repair and maintenance sector France, ****-****, in millions of euros Source: ****

The plan to raise the national defense budget to *% of GDP by **** is being felt in the French Navy, so the renovation of various items of equipment is also affected. *.** billion euros in commitment authorizations and *.* billion in payment credits will be allocated to the French Navy as part of the "preparation of naval forces". In terms of renovation and maintenance, this budget will notably enable the renovation of a Lafayette-type frigate and the reinforcement of a multi-mission frigate with air defense capability.(***).*** billion euros in commitment authorization and *** billion euros in payment credit .

As for the civil repair market, according to theObservatoire ...

2.1 Type of boat

The demand for naval repairs is divided between the defense needs of the French Navy and those of the civilian navy.

Military vessels

There are several categories of vessels owned by the French Navy. Based on data provided by the French Navyit is also possible to count vessels by category.

Combat vessels (***) Patrol and surveillance vessels (***) Specialized vessels (***) Submarines (***) Gendarmerie maritime (***)

Military naval vessels are generally ageing, and the Ministry of the Armed Forces only authorizes renovations in French ports, for reasons of national security.

Civilian craft - commercial and pleasure

Military vessels are not the only ones on French waters requiring regular maintenance, as civilian vessels also operate in this segment. However, a distinction must be made between the merchant navy and the pleasure fleet.

Merchant navy

First of all, we can determine the number of vessels operating according to the category to which they belong. This gives us an idea of the relative importance of each vessel in relation to the others.

Number of French-flagged transport vessels by type of use France, ****-**** Source: ****

These figures need to be put into perspective, however, as registration under a foreign flag is very common - **** vessels were registered in Panama in ...

2.2 Demand that evolves over time

ageing fishing vessels

We can draw on an article from Point to provide some information about the fishing fleet. According to the article, the fleet is "aging". Vessels are ** years old on average, and two-thirds of them will have to be replaced in the coming years.

Source: ****

We are also witnessing the emergence of infrastructures to accommodate yachts. Sales of yachts and superyachts have increased in recent years, and it has become imperative to develop new yards for their refit.

A study by Michel Desse and Simon Charrier, published on Open Editionsprovides an overview of the vessels built in this sector in ****.

A thirty- to forty-meter yacht costs an average of *.* million euros a year in provisioning, taxes, maintenance, crew and insurance. This figure rises to *.* million euros. On average, a luxury yacht spends nearly *.* million euros a year on maintenance. The Provence-Alpes-Côte-D'azur region, France's largest yachting region, boasts ** yachting companies and * shipyards. Expenditure generated by yachting in the South of France is estimated at *** million euros.

Today, *,*** yachts sail the oceans, twice as many as ten years ago, according to l'Écho. In ****, *** yachts were on the water, a slight increase on ****.

2.4 Pleasure boat repair demand and capacity

The profile of private customers

Individuals: yacht repair company customers are mainly retired people, blue-collar workers and individuals with no professional activity.

Socio-professional categories of boat buyers (***) France, % of total Source: ****

Marina facilities and services depend on size and geographical location

In a **** report, Ecologie.gouv provides information on the equipment rate of sea and river ports. The larger the port, the better equipped it is.

Equipment rate of sea and river marinas France, ****, in Source: ****

3.1 Market organization and dynamics

The ship repair market is divided into several segments, according to the end use of the boats.

The market is structured as follows:

The ship repair and maintenance market is not the result of a production process. It is a sector in which there is only one point of contact between the shipyard and the customer. The repair and maintenance company, which provides a service, must nevertheless source parts and materials from shipbuilders.

In ****, there were *,*** companies listed under NAF code **.**Z, which corresponds to ship repair and maintenance in France, ** of which are located in French overseas departments(***)

Average number of companies and employees for NA code **.** unless no data available France, ****-**** Source: ****

The graph above shows a slight upward trend in the number of companies in the ship renovation and maintenance market over the past few years, which could confirm the trend predicted for this market by Future Market Insights as mentioned above.

In ****, three regions will account for the majority of companies in the sector: Nouvelle-Aquitaine, Brittany and, at the top of the list, the Provence-Alpes-Côte d'Azur region with *** companies, i.e. around a third of market players.Moreover, the number of employees is evolving at ...

3.2 Aspects of ship repair and maintenance

Shipowners choose between different shipyards according to their needs:

If it's an urgent request to deal with damage, the shipowner will be obliged to use a local shipyard. If it's a classic five-yearly technical shutdown in dry dock (***) or the recommissioning or sale of a second-hand vessel, the shipowner's choice of repair yard will depend on the vessel's area of operation and its complexity.

All ships have unique characteristics to which the shipyard must adapt. For example, the technical shutdown of a container ship is often planned a year in advance at a yard close to its operating line. For an LNG carrier, you need to find a specialized yard specially approved for this type of work. For a cruise ship, the size of the dry dock is crucial. For a bulk carrier, the shipowner will most often choose a yard close to the ship's operating area.

in terms of duration, a standard technical shutdown requires five to ten working days. More complex projects, such as ship conversions or offshore platforms, require between two and six months' work.

The renovation of the French aircraft carrier Charles-de-Gaulle took a longer time, ** months, due to its technical complexity, at a total cost of ...

4.1 Non-construction shipyard departments

Repair

If damage occurs to a vessel - collision, fire or grounding - or if wear and tear degrades the quality of the vessel's equipment or envelope, it is necessary to have the damaged parts repaired. Whatever the equipment - hull, belts, engines, pipes or electrical systems - the ship repair and maintenance company can be called in to intervene.

Maintenance

Ships are often required to be dry-docked on a regular basis to check their operating condition. Naval company technicians then intervene to check that the ship complies with standards, is safe and efficient. All important parts are checked, from the engine to the ship's computerized management system.

Refit

Refit, as practiced in shipyards, is the activity of upgrading old boats to give them a new lease of life. This can be done by adding, modernizing, modifying or renovating existing parts. Refitting can involve the installation of new turbines, for example.

Conversion

Naval conversion involves changing the use of one vessel to another. For example, a former bulk carrier can be converted into a container ship - like the MS Nordwand, whose conversion is explained on the meidericherschiffswerft website - supply ships can also become hospital ships.

The most common ...

4.2 Prices based on boat volume

Prices are often based on the volume of the vessel. This is calculated as follows:

V=L × l × Te

Given :

L, overall length of the vessel l, maximum beam of the vessel Te, maximum draught of the vessel

Knowing that prices vary widely from one port to another, we propose to detail those of the port of Concarneau in ****. [***]

The raising and lowering of the ship to dry dock is calculated as the product of its volume and *.** euros (***), with a minimum of *,*** euros per maneuver.

Preparations and reception of the vessel (***) is invoiced at **** euros.

The cost of a day spent in dry dock is calculated according to the volume of the vessel

We must then include the costs of the personnel who will carry out the overhaul, since these are not included in the overhaul costs.

Other costs may come into play, such as the supply of fresh water or electricity. There are also other ways of lifting the boat out of the water, all with different prices:

strap hoist Self-propelled cart

4.3 Cooperation agreements keep the sector moving

Cooperation agreements between repair facilities

In addition to the partnerships signed between shipowners and shipyards, other cooperation agreements have been signed between repair facilities. Fincantieri, for example, has signed an agreement with Huarun Dadong Dockyard in Shanghai to bring its technical expertise to the cruise ship segment in China. In exchange, the Chinese shipyards must allow Fincantieri to use their infrastructures.

States limit company agreements

The strategic dimension of naval activities implies significant state control. This control exists at national level, through the presence of the French state in the shareholding of companies in the sector. A second level of control is exercised by the European Union. The European Commission is responsible for approving the purchases and sales of shipyards and other players in the military sector. This interaction between the state and the EU is illustrated by the case of the takeover of the Atlantic shipyards by the Italian company Fincantieri. The shipyards were nationalized in ****, and the European Commission must approve the takeover in a complex and tense political context.

5.1 Current control

In addition to the traditional rules concerning safety at work and respect for the environment, it may be interesting to look at a European rule concerning subsidies for the shipbuilding sector .

In ****, the European Commission validated the French bill to provide subsidies for innovation:

Ship repair yards repairing or refitting self-propelled commercial vessels. Ship conversion yards converting self-propelled merchant ships, provided that the work involved is sufficiently extensive. Provided that the processes applied are innovative.

This shows that European, national and sometimes regional aid is available - as in the case of the *.* million euros in aid from the Conseil Régional de Bretagne for facilities at the Concarneau naval port, as reported in Le Marin

Ship repair involves heavy industrial operations using polluting chemicals. These operations are highly regulated, notably due to the proximity of shipyards to coastlines and the risk of water contamination.

A series of standards govern shipbuilding and repair activities in terms of pollution, fire risk, watertightness of boats, and resistance to impact and corrosion.

6.1 Segmentation

• Port de la Rochelle
• Port de Concarneau
• Normandie Refit
• Atlantic Refit Center
• Damen Shipyard
• MB92
• Navtis Groupe
• Chantier naval de Marseille
• Piriou
• Chantier naval de Socoa
• Vertica
• Nautilia Groupe