Turkey’s shipbuilding sector faces steep decline as costs rise and orders dry up – Turkish Minute

Turkey’s ship and yacht exports fell by 61.8 percent in June 2025 to approximately $84 million, marking the sharpest contraction in the industry’s recent history, according to a report by the Ekonomim news website.

The decline reflects mounting production costs, tight financing conditions and a rapid loss of competitiveness in traditional export markets.

The downturn follows a period of strong growth, including a 33 percent rise in export value in 2023, followed by a stable 2024. However, the first half of 2025 has revealed a sharp reversal. One of the most striking developments is the collapse of exports to Norway, Turkey’s largest historical market for tugboats and fishing vessels. Although Norway still had a 22 percent share of total exports in the first half of the year, there were no exports registered to Norway in June, compared to $60 million in the same month last year.

Cem Seven, chairman of the Ship, Yacht and Services Exporters’ Association (GYHİB), said production costs in Turkey are rising. Speaking to Ekonomim, he added, “The fact that the exchange rate doesn’t rise in line with inflation is undermining our cost advantage.” Seven also pointed out that Turkish shipyards are experiencing serious difficulties in accessing financing. This has critical implications in a competitive global shipbuilding market valued at over $155 billion, where Turkey holds a niche share of less than 1 percent.

He warned that if current trends continue, more Turkish shipbuilding companies could shift investments abroad, following the example of major players such as Tersan and Hicri Ercili, which have established operations in Norway and the Netherlands, respectively. According to industry data, employment across more than 80 active shipyards in the manufacturing sector has also shrunk by more than 10 percent over the past year.

The removal of value-added tax exemptions for vessels under 24 meters has further complicated matters for small and mid-sized shipyards. Meanwhile, shifting global demand toward greener and more technologically advanced vessels has exposed structural gaps in Turkey’s maritime manufacturing capacity.

While new construction falters, Turkey’s ship recycling industry remains robust. Based in the western port city of Aliağa in İzmir province, it is the fourth largest globally and is expected to grow steadily through 2032. Over the past decade more than 2,000 ships have been dismantled there, including 66 vessels in 2023.

But that strength comes with controversy. The recent arrival of the decommissioned British warship HMS Bristol has sparked environmental concerns, with activists claiming the vessel contains hazardous materials such as asbestos. Aykut Akdemir, a representative from the Union of Chambers of Turkish Engineers and Architects (TMMOB), said the issue reflects a long-standing pattern. “This is part of a systematic pollution policy,” he said. For balance, the UK’s Ministry of Defence confirmed the sale, noting that no British shipyards had bid on the contract to scrap the vessel.

As shipbuilding contracts, employment shrinks and environmental scrutiny intensifies, industry leaders warn that more Turkish companies may move their operations abroad to survive. Without urgent financial and regulatory reforms, Turkey risks losing not only market share but also its regional prominence in maritime industries.