Mangalia shipyard in the red

Daewoo Mangalia Heavy Industries (DMHI) shipyard, the biggest shipyard on the Romanian market, closed last year with losses worth 18.5 million euros, despite a 46% increase in its turnover, according to financial data published in the Official Gazette. DMHI slipped into the red mainly because of the increase in the price of sheet metal, the main raw material used for shipbuilding, said the company management. In 2004, the shipyard had posted a net profit worth 5.7 million euros, with turnover standing at 109.1 million euros. DMHI business rose to 159.2 million euros last year. “We went in the red mainly because of an excessive increase in the price of sheet metal beyond expectations. We generally close contracts for sheet metal four years before the construction is to start, and when we closed these contracts the price of sheet metal for shipbuilding was around 250 euros/tonne, although, we estimated it could rise to almost 510 euros/tonne. But when we actually bought the metal sheet, the price stood at some 700 euros/tonne,” explained Iulian Sandu, DMHI’s general business manager.