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The country faces closing failing yards as the pace of privatisation slows. Croatian shipyards that lose money should be shut down, according to a member of the ruling Croatian Democratic Union (HDZ) party.
Pressure mounts on Croatian yards
“I support the development of the shipbuilding industry but not at any price,” said parliamentarian Jerko Rosin, while specifically discussing the future of Trogir Shipyard.

The facility, which is building three 46,000-dwt chemical and oil tankers for Laurin Maritime, is loss-making and has for a long time been seen as vulnerable, especially given the potential to redevelop the site — in the UNESCO-protected region — for tourism.

Rosin, in an interview with Croatian daily Slobodna Dalmacija, said shipbuilding is part of the country’s identity. But its problems cannot be ignored and yards “that do not pay off should be closed”.

Of Croatia’s six state-owned yards, only Uljanik in Pula is said to be solvent. The European Union (EU) has called for their restructuring to end huge government subsidies and to facilitate Croatia’s possible EU membership in 2012. Efforts have been made to privatise the five loss-making yards but buyers must finance a large part of any restructuring.

Croatian prime minister Jadranka Koso visited Uljanik at the beginning of this month and is said to have described it as the only shipyard in Croatia regarded as problem-free by the European Commission (EC). It is said to have made a HRK 41m ($7.15m) net profit in 2010.

Its orderbook includes a pair of 13,500-dwt livestock carriers for Siba Ships, two 27,000-dwt ro-ros for Grimaldi Group and dredgers for Jan De Nul.

Rosin, who was speaking following talks in Brussels between the EU and Croatia, believes Split Shipyard has the potential to be restructured and survive.

There has been talk that the Koncar investment group of South Africa wants to move Trogir’s activities to Split, which has been building 65,000-dwt products tankers for Stena Bulk, a passenger/car ferry for Jadrolinija and a 52,000-dwt bulker for Jadroplov.

Koncar is led by Danko Koncar, dubbed the “King of Chrome” because of the Croatian businessman’s ownership of mines in South Africa. He is said to be interested in all five non-profitable yards, including 3 Maj.

Meanwhile, it is reported that Norwegian real-estate company Olympia Holding has purchased tender documentation for the Trogir yard from the Croatian Privatisation Fund (HFP).

Founded in 1990, Olympia is said to invest in the real-estate, finance and energy sectors. It specialises in restructuring projects, has acquired property throughout Europe and a few years ago showed an interest in buying real estate in Split.

A third potential buyer of Trogir is Croatian businessman Slobodan Ljubicic.

The pace of Croatian yard privatisation, however, has been very slow. A nominal price of HRK 1 for each of the five yards available is being asked but that forms only part of the final cost to whoever succeeds.

Slipways are still used to launch ships and investing in alternative methods could be very expensive.

Roko Markovina, a professor of naval architecture and member of the left-wing opposition, the Social Democratic Party (SDP), is cited by the Croatian Times as saying the public is being deceived by incorrect statements portraying the yards as a burden on state finances.

By Geoff Garfield London

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