Two years after bankruptcy, the Mangalia shipyard in Romania sees a dawn of revival. German defense industry giant Rheinmetall and the world’s largest shipping company, Mediterranean Shipping Company, are joining forces to plan the joint acquisition of this half-century-old, largest shipyard in Europe.
Recently, German defense industry group Rheinmetall confirmed that it is working closely with Mediterranean Shipping Company on the acquisition of the bankrupt Damen Shipyards Mangalia, considering large-scale investment in the Mangalia shipyard to upgrade it into a “dual-use” shipbuilding center capable of constructing both naval vessels and commercial ships.
Previously, Damen Shipyards Mangalia formally initiated bankruptcy liquidation proceedings after its restructuring plan was rejected by creditors. The bankruptcy court valued the shipyard at 87 million euros (approximately 698 million yuan). According to local regulations, the government can reclaim the shipyard at a price not exceeding the liquidation value.
Romania plans to inject the land and assets of the Mangalia shipyard into a new joint venture with Rheinmetall and Mediterranean Shipping Company. In this venture, Rheinmetall will lead the defense shipbuilding business, while Mediterranean Shipping Company will participate as a partner in the commercial shipping sector. The two parties intend to jointly acquire a majority stake in the Mangalia shipyard, while the Romanian government will retain a minority share.
Rheinmetall is renowned for its military equipment and security systems. In recent years, the company has entered the shipbuilding sector. Last year, it reached an agreement with the German Lürssen Group to acquire its naval shipbuilding business, NVL, and established a Naval Systems division, specifically responsible for important German Navy projects.
To attract strategic investors, the Romanian government had previously decided to award orders for four vessels from its defense procurement plan to the Mangalia shipyard, including two combat vessels and two military diver support ships.
Rheinmetall stated that the significance of acquiring the Mangalia shipyard lies not only in restoring its operations and building these four vessels but also in developing Romania into an important shipbuilding production center in Europe. In this context, Rheinmetall plans to attract more European and global projects to Romania, thereby strengthening Romania’s position in the defense industry and shipbuilding sector, and pushing Romania back to a key position on the European shipbuilding manufacturing map.
In Rheinmetall’s view, the revival of the Mangalia shipyard is of strategic importance. Restoring the shipyard’s operations is expected to have a significant positive impact on the local economy, promoting business environment stability and development. In the long term, the shipyard is expected to create thousands of jobs. By establishing a dual vocational training system to cultivate the workforce and setting up centers of excellence and R&D, the region is expected to develop into a specialized technical center, attracting young people to stay in Romania and build their future.
Rheinmetall stated that the existing business operations of the Mangalia shipyard will be continued and integrated into a modernized business model. Under this model, existing experience will be further utilized and expanded, while the capabilities and resources of the existing infrastructure will also be optimized more efficiently.
According to reports from last year, Mediterranean Shipping Company had written to the Romanian government, considering taking over the management and operation of the Mangalia shipyard. Mediterranean Shipping Company planned to use the Mangalia shipyard for maintenance and repair services for its fleet, and also considered building cruise ships, Ro-Ro passenger ships, and tugs at the Mangalia shipyard in the future. Mediterranean Shipping Company also proposed providing funding to the shipyard through prepayment of repair fees to support its rehiring of employees.
It is understood that the Mangalia shipyard is one of the largest shipyards in Europe, established in 1976, originally named 2 Mai Mangalia Shipyard. Located on the Black Sea coast, the shipyard covers a total area of approximately 1 million square meters, has three dry docks with a total length of 982 meters, widths of 48 meters and 60 meters, and berths extending 1.6 kilometers. It is equipped with one 1,000-ton and two 480-ton gantry cranes, as well as nine additional 16-20 ton jib cranes.
In 1997, South Korea’s Daewoo Shipbuilding & Marine Engineering (now Hanwha Ocean) jointly took over the 2 Mai Mangalia Shipyard with the Romanian government, renaming it Daewoo Mangalia Heavy Industries (DMHI). Daewoo Mangalia Heavy Industries was owned 51% by Daewoo Shipbuilding and 49% by the Romanian government.
Under Daewoo Shipbuilding’s management, Daewoo Mangalia Heavy Industries further expanded the shipyard’s facilities and focused entirely on the construction of large commercial vessels. From 1997 to 2017, Daewoo Mangalia Heavy Industries built and delivered over 200 ships, covering vessel types ranging from Handysize to Capesize bulk carriers, feeder to Post-Panamax container ships, and small to medium /oil tankers to Suezmax crude oil tankers.
In July 2018, the Dutch Damen Shipyards Group acquired Daewoo Mangalia Heavy Industries, and the shipyard was subsequently renamed Damen Shipyards Mangalia. The Mangalia shipyard is capable of building and converting large, high-end, complex vessels such as ferries and offshore engineering ships, making it the largest shipyard in the Damen Shipyards Group. Initially, upon taking over Damen Shipyards Mangalia, the Damen Group had high hopes for the shipyard, aiming to develop it into a construction base for cruise ships, large Ro-Ro vessels, and offshore vessels.
However, with the global outbreak of the COVID-19 pandemic in 2020, declining demand in the offshore market coupled with increased competition from Asian shipyards led to a sharp drop in shipbuilding and repair activities. New ship orders for European shipyards in 2020 plummeted by 64% year-on-year, and Damen Shipyards Mangalia inevitably suffered a heavy blow. Since 2020, the shipyard has not secured any new commercial ship orders.
In June 2023, the Romanian government passed a new law granting the government control over Damen Shipyards Mangalia and limiting the Damen Group’s participation to that of a minority investor. Damen Shipyards Group protested this, but due to the inability to resolve the dispute, the Damen Group terminated the joint venture in August 2023.
Following Damen’s divestment, the Mangalia shipyard faced severe financial problems, ultimately filing for bankruptcy at the end of May 2024, with liabilities exceeding 400 million euros. Since May last year, the Mangalia shipyard has gradually resumed operations, and management has implemented a series of measures to stabilize finances and restart production, including phased payment of employee wages.
