* Maersk to end shipbuilding at Odense Steel Shipyard
* To put Baltija Shipyard in Lithuania up for sale
* Shares down 2 pct, underperforming local bourse
(Adds CEO quotes, details, share price)
By Teis Jensen
COPENHAGEN, Aug 10 Danish shipping and oil group
A.P. Moller-Maersk (MAERSKb.CO) will end shipbuilding at the
loss-making Odense Steel Shipyard in Denmark and put its Baltija
Shipyard in Lithuania up for sale, the company said on Monday.
Maersk said in spite of major efforts to improve
competitiveness at Odense through new technology and more
efficient production processes, it had run up "very
considerable" annual deficits and was unable to attract
"commercially sound" orders.
The shutdown of the Odense yard marks the end of a
900-year-old tradition of building big ships in Denmark.
Maersk shares fell 2 percent to 34,000 crowns by 1342 GMT,
underperforming a 0.9 percent fall in the Copenhagen bourse
blue-chip index .OMXC20.
A.P. Moller-Maersk Chief Executive Nils Smedegaard Andersen
said Odense Steel Shipyard had played a key role as Maersk
became a global player in the shipping industry.
"But times have changed. Overcapacity in the market and
tough competition have made the situation increasingly difficult
in spite of initiatives taken to meet these challenges,"
Andersen said in the statement.
Odense Steel Shipyard posted a 562.3 million Danish crowns
($107.2 million) pretax loss in 2008, a 156.7 million crowns
pretax loss in 2007 and a 1.07 billion crowns pretax loss in
In March, the A.P. Moller-Maersk group posted a net profit
of $3.5 billion for 2008, up from $3.4 billion in 2007.
The yard, which currently has 2,700 employees, will fulfill
existing orders and continuously downsize the workforce, the
The first redundancies of about 175 employees are expected
to take place from the end-August, and the last new vessel on
order is expected to be delivered in February 2012, it said.
"With the discontinuation of the shipbuilding activities at
Odense Steel Shipyard there is no longer a need for ownership of
the Lithuanian shipyard, Baltija Shipyard. The company is
therefore put up for sale," Maersk said.
Design and engineering company UAB Baltic Engineering Centre
in Lithuania is also up for sale, it said.
Sydbank analyst Jacob Pedersen said Maersk could not avoid
closing Odense Steel Shipyard.
"They are looking closely at all parts of the company to
find places to cut costs," Pedersen told Reuters, adding there
was no prospect of a rebound in shipbuilding orders in the short
($1=5.247 Danish Crown)
(Editing by Simon Jessop)