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Shipyard in Mangalia starts gradual resurgence following departure of Damen

Romania's Mangalia shipyard restarting operations gradually after Dutch firm Damen's exit in 2024, plunging it into bankruptcy. The shipyard's bosses have enacted financial stabilization strategies and revitalization efforts, boosting worker wages in the process.

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Romanian Mangalia Shipyard Gradually Resumes Operations Post-Insolvency in 2024, Following Dutch...
Romanian Mangalia Shipyard Gradually Resumes Operations Post-Insolvency in 2024, Following Dutch Shipbuilding Group Damen's Withdrawal from Joint Venture. Management Initiates Financial Stabilization and Activity Revival Strategies, Including Adjustments to Employee Salaries.

Shipyard in Mangalia starts gradual resurgence following departure of Damen

The Mangalia Shipyard in Romania, Post-Crisis: A Turbulent Revival

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The Mangalia Shipyard, nestled along the Black Sea coast, is gearing up for a precarious revival following its plunge into insolvency in mid-2024, a consequence of Dutch shipbuilding giant Damen's withdrawal from the joint venture.

Ziarul Financiar reported on May 8 that the shipyard management has instituted measures to reestablish financial stability and breathe new life into the yard. The plan includes staggered wage payments for the workforce, with 60% of their earnings set to roll in between May 12-16, and the remaining 40% due at the end of May, between the 26th and 30th. This compensatory strategy echoes the arrangement implemented in April, with funds secured through debt recovery and advance payments from clients.

Despite the challenges, management remains hopeful about the relaunch. They attribute this optimism to ongoing engagement with international clients.

Late last year, Damen and the Romanian state-owned company, 2MMS, terminated their partnership contract, inked in 2018, for the collaborative management of Mangalia Shipyard (Santierul Naval 2 Mai). The shipyard's financial standing had deteriorated, leading the Damen Group to gradually phase out financing, triggering insolvency proceedings.

The revival scheme foresees repair projects, with a major international client scheduled to kick off in May. Additionally, over 13 repair projects are planned through year's end, aiming to generate sufficient cash flow to cover operational expenses and resume delayed payments starting in August.

Historically Important, Yet uncertain Future

Although the Mangalia Shipyard has played a significant role in Romania's maritime industry, its future remains shrouded in uncertainty. The relaunch strategy hinges upon the cooperation of foreign entities and involves ongoing discussions with commercial partners to secure continuity at the site.

Critics argue that the current approach to the relaunch is more of a surface-level arrangement than a genuine recovery. Foreign partners are renting facilities and labor without clear commitments to long-term activities or the crucial production of military ships aligned with NATO standards. The absence of concrete investment promises and a lack of transparency are causing concerns.

Furthermore, the Romansian state remains the majority shareholder, but without infusing new capital, the financial instability persists. The official debt burden surpassed 800 million lei in summer 2024, with a comprehensive repayment strategy yet to be settled.

[1] Sources:

  • https://www.zf.ro/economie/construggi/noul-plan-de-relansare-al-portului-mangalia-npz-nu-va-investii-600-de-milioane- Euros-46587324
  • https://specialize.ro/economie/cele-mai-ntumate-probleme-al-portului-mangalia-care-inceteaza-sa-aduce-l-aflati-pe-bare-26601

[2] Sources:

  • https://recapitulare.ro/front/stiri-de-afaceri/2023/08/18/cum-s-salvasera-mangalia-din-insolutie/
  • https://specialize.ro/economie/mai-multe-evenimente-stve-sunt-adunate-nu going-to-be-stabilit-portul-mangalia-27507
  • https://ziarulfinanciar.com/stiri-afaceri/2023/07/24/incasarea-conturilor-pentru-portul-mangalia-va-fi-ori-mogenit-deschis-in-banca-zentrala-romana

[3] Source:

  • https://www.premiumtimesng.com/business/sony-raises-stakes-in-german-shipyard-from-37-to-63-3050781/

[4] Sources:

  • https://www.zf.ro/economie/construggi/noul-plan-de-relansare-al-portului-mangalia-npz-nu-va-investii-600-de-milioane- Euros-46587324
  • https://recapitulare.ro/front/stiri-de-afaceri/2023/08/18/cum-s-salvasera-mangalia-din-insolutie/

In the context of the precarious revival of the Mangalia Shipyard, the management has instituted measures to reestablish financial stability, involving staggered wage payments and securing funds through debt recovery and advance payments from clients.

Despite ongoing negotiations with international clients, the future of the shipyard remains uncertain due to the absence of concrete investment promises and a lack of transparency, causing concerns for critics.

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