Tallink's ship order from Turku yard confirmed

A binding contract for the construction of a new cruise ferry has now been signed between Tallink Silja Oy, a Finnish subsidiary of Estonian AS Tallink Grupp (TAL: TAL1T) and Meyer Turku Oy, the recently acquired Finnish arm of Meyer Werft GmbH. Teollisuussijoitus (Industry Investment, Finnish government-owned investment firm) has 30% minority stake in Meyer Turku. The parties had signed a Letter Of Intent in December. Tallink is ordering a 230-million 212-metre long LNG-powered fast ferry designed to carry 2800 passengers.

The deal is important for the large subcontractor network in the area. Many small to medium sized engineering firms deliver much of their revenues from the sector and maintain critical competences, one of the reasons why maintaining Turku’s shipyard as well as Rauma’s, Pori’s and Helsinki’s is seen so vital for the entire Finnish maritime cluster. Local steel firms such as SSAB [OMXS, OMXH: (SSAB A, SSAB B)] and Outokumpu (OMXH: OUT1V) could vie for some materials deliveries.

Things are looking up in Turku for the moment, with much of the current layoffs presumably ending and new temp recruits coming with 30% more work next year. In total building the ship requires an estimated 2000 man hours of work. Over 80% of the total value of labour and components is expected to be created locally. Delivery is expected in early 2017 and Tallink has an option for a sister ship. The ferry is expected to serve Tallinn-Helsinki route.