German shipbuilder Meyer Werft has secured a shipbuilding order worth €10 billion ($11.7 billion) from MSC Cruises, a deal that will keep the Papenburg-based yard fully occupied for more than a decade.

Germany’s Economy Minister Katherina Reiche confirmed that the agreement covers shipbuilding projects running through 2033, with two additional optional projects extending to 2035. She added that MSC Cruises has emerged as a strong long-term partner for the shipyard.

According to a separate statement from the Economy Ministry, the agreement is expected to involve the construction of between four and six cruise ships.

The work will fully utilise Meyer Werft’s production capacity at its Papenburg yard in northern Germany, close to the Dutch border, until 2035.

The order follows the state rescue of Meyer Werft last year, after the company came close to bankruptcy. The German federal government and the state of Lower Saxony each acquired a 40% stake in the shipbuilder, investing a combined €400 million, and provided €2.6 billion in credit support to stabilise the business.

The shipyard was badly affected by the Covid-19 pandemic and the economic impact of the war in Ukraine, which severely disrupted cruise ship orders and financing.

The Economy Ministry said the restructuring process began in early 2024 and is scheduled to be completed by the end of 2028.

Reiche said the government plans to continue supporting Meyer Werft until it is financially stable and able to operate on its own. She added that authorities are working towards re-privatising the shipyard once it is considered strong enough to return to the market.

The MSC Cruises order is expected to provide long-term security for Meyer Werft’s workforce and strengthen Germany’s position in the global cruise shipbuilding sector.

Reference: Bloomberg