Fincantieri Shifts Focus from Luxury Liners to Naval Power in Strategic Defense Move

According to a recent report from Bloomberg, Fincantieri SpA is shifting it’s focus in Italy’s shipbuilding sector, particularly at its civil and military shipyards, to concentrate on warship production. This move reflects the growing trend of increased defense spending across Europe. CEO Pierroberto Folgiero shared insights about this strategic pivot during an interview in Milan,highlighting plans to enhance naval capabilities while reassessing operations at two key sites in southern Italy: Castellammare di Stabia and Palermo.

Folgiero noted that these locations currently produce both commercial and military vessels but may soon specialize more heavily in warships due to rising demand. “We can easily ramp up our military output by reallocating some of our civilian production,” he explained. The company sees a significant possibility for growth as European nations boost their defense budgets—an initiative underscored by NATO’s recent commitment to allocate 5% of GDP towards defense spending.

This surge in investment presents Fincantieri with a unique chance for expansion over the next decade. Other companies within related sectors are also exploring ways to adapt their manufacturing processes to capitalize on this boom. with governments poised to redirect hundreds of billions of euros into national security initiatives, Fincantieri anticipates increased demand not only from domestic sources but also through export opportunities.

Actually, during a presentation earlier this year, the company set an enterprising target of capturing €20 billion (approximately $23.4 billion) from this influx of funding. They project that by 2027, their naval division—which constructs everything from frigates and destroyers to aircraft carriers—will account for around 30% of total revenue compared to just 20% last year; conversely, the cruise liner segment is expected to decrease from 44% down to about 35%.

The upcoming changes will be part of a new business strategy expected later this fall; initial restructuring could take between six months and a year and a half post-approval. Folgiero mentioned that some civilian shipbuilding tasks might shift out of Italy entirely—Romania could see an increase in steel fabrication work for cruise liners while Vietnam’s Vung Tau facility may handle more specialized vessel projects due to cost advantages.

Despite these shifts abroad, final assembly for Fincantieri’s cruise ships will remain firmly rooted within Italy at facilities located in Monfalcone, Marghera, Ancona, and Genoa. “All segments—military vessels as well as cruise ships—will gain from our reorganization,” Folgiero stated confidently.Fincantieri’s stock saw gains recently amid these developments; since Folgiero took over as CEO last May, the company’s market value has skyrocketed fivefold—to approximately €5.2 billion—as compared with significant growth seen across other defense-related firms like Daimler Truck Holding AG or Renault SA.

Additionally, Prime Minister Giorgia Meloni’s administration is considering how best they can repurpose underutilized automotive manufacturing capacity toward defense applications—a process likely requiring time before any tangible results emerge.On another front, Fincantieri is keen on advancing underwater technologies such as submarine drones—a new division was introduced earlier this year with aspirations for revenues exceeding €800 million by 2027 alongside margins nearing 19%. The CEO remains open-minded regarding smaller tech acquisitions funded through internal resources without necessitating capital increases while keeping an eye on Thyssenkrupp AG’s marine unit amidst its IPO preparations.

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