Genting Hong Kong has acquired control of the shipyard where it plans to build three ocean ships and two river cruise vessels for its Crystal Cruises line.
The unusual move comes as capacity has tightened in the limited number of European yards that build cruise ships.
A total of 41 cruise ships, worth more than $30 billion, are on order through 2021, all but two of them to be built by one of three firms: Fincantieri, Meyer Werft or STX France.
Crystal plans to build its three ships for delivery starting in 2018 at the Lloyd Werft yard in Bremerhaven, Germany, which until now has mainly refurbished and converted ships when they changed ownership or stretched existing vessels by inserting new sections.
Genting said it would invest 17.5 million euros ($19.7 million) for a 70% stake in Lloyd Werft's shipbuilding business and a 50% ownership in the shipyard land.
The Bremerhaven yard employs 500 people and has six docks. Last year, it refurbished the 45,000-ton former P&O Cruises ship Artemis for Phoenix Reisen, which operates it as the Artania. This year, it is doing repair and modernization work on the Voyages of Discovery ship MS Voyager and the Lindblad Expeditions-National Geographic ship National Geographic Explorer.
It is rare for cruise lines to own shipyards. In 1989, Carnival Corp. under then-chairman Ted Arison financed the reorganization of the Wartsila Marine yard in Helsinki, Finland.
"He purchased it so he could finish the Fantasy," recalled Maurice Zarmati, former president and CEO of Costa Cruises North America, who was with Carnival at the time. "If you mirror that with what Genting is doing now, you understand the value of why they're doing it."
Although Lloyd Werft is not insolvent, Zarmati said Genting is maximizing its control over project prioritization by partly owning the yard.
"They want to make sure their vessel is built, and built on time," Zarmati said. "What better way than to go right to the creator of the construction and say, 'I'm going to control the process until completion'?"
The Voyages of Discovery ship Voyager was at the Lloyd Werft shipyard this year for repair and modernization. An earlier version of this article incorrectly stated that the ship was the National Geographic Voyager.