Shipping industry defies crisis

REVENUE from ship management came to €435 million during the first six months of 2012 according to statistics gathered by the Central Bank.
This represents five per cent of Cyprus’ GDP and is a two per cent rise from the same period in 2011. This is despite the global financial crisis, the bank said.
There was a large increase in revenue during 2008 and a subsequent decline in 2009 and 2010, following the beginning of the global financial crisis. Despite this decline, revenues increased again in 2011, as the industry is more dependent on countries that were less affected by the crisis than Europe.
During the first half of 2012, the ship management industry in Cyprus increased its revenues to €435 million. This represents a two per cent increase when compared with the results of the second half of 2011 (€428 million). The size of the industry, not in value added terms but as turnover, rose to five per cent of the country’s GDP, which is the highest percentage that has been observed during the last two years.
In a statement to the Cyprus News Agency, the director-general of the Cyprus Shipping Chamber, Thomas Kazakos hailed the relatively small but steady rise in the shipping industry’s contribution to the GDP.
"Considering what global shipping has gone through in recent years, during the most difficult economic period in decades in terms of the low freight market and the possibility of unsatisfactory financing by banks, the constant and increasingly positive contribution of the Cypriot shipping industry to the island's economy proves that it is one of the most important and enduring financial contributors, "he said.
Kazakos also referred to the need to restore stability to Cyprus’ economy as soon as possible. “This will restore the credibility and attractiveness of Cyprus in investment circles abroad,” he added.
He also spoke of the necessary measures for the further development of Cypriot shipping. The CFC presented their proposals to the island’s presidential candidates.
These were the creation of the position ‘Deputy Minister of Shipping’, the expansion and promotion of the shipping tax system and the immediate lifting of the Turkish embargo on Cypriot ships.
It is expected that ship registrations will increase following the recent policy changes in taxation and flag benefits by the government. This tax is considered by shipping agents to be one of the most competitive in Europe.
Revenues from ships under the Cyprus flag can potentially increase in the future given the size and importance of Cyprus’ shipping registry according to the Central Bank.
The industry in Cyprus is relatively concentrated with 30 per cent of the companies accounting for 88 per cent of the industry’s revenues.
Ship management services such as crew, technical and full management provided the majority of the industry’s revenues for the first half of 2012 with 66 per cent. Additional contributions were provided by freight with 17 per cent, chartering with 9.0 per cent and other services such as finance and logistics.
Within ship management, crew management was the most important type of service with a 53 per cent share followed by full management with a 49 per cent share.