Specialisation is the key
The strength of sterling is making competition between UK yards and others in northern Europe harder, and there is no doubt that this is having an impact on yards` abilities to win orders.
They are continuing to concentrate on specialised, high added-value tonnage, with a high engineering content, to avoid lower cost competition from overseas on simpler ships. "The UK can compete on the more complex tonnage, but it is increasingly difficult on simple tonnage," feels Ferguson Shipbuilders` Ken Fulford. "If it is simple, the owner can find cheaper places to build." Of the three main yards, Appledore has been the most involved in building simpler vessels alongside its high-value tonnage in the last few years, with deliveries including coasters and small product tankers and bulk carriers. "We will supply whatever the market wants," says managing director Jim Wilson.
To say that the British government has done little to help shipbuilding in recent years would be an understatement, though the new Labour administration is now talking of supporting the industry. Most are understandably sceptical, but a new Shipbuilding Forum has been established, and it will be interesting to see if anything positive emerges. Meanwhile, the standard 4.5 per cent/9 per cent intervention scheme is the limit of support. Regional aid could be available under EU rules, but Appledore`s Mr Wilson states: "We have not had one penny from government sources except from the intervention fund."
Kvaerner Govan Orders at Kvaerner Govan are dominated by offshore related tonnage. Two supply boats for Farstad will be delivered in January and March 1999, and a highly sophisticated oil well test vessel for Brovig takes the yard through to July next year. This is the extent of the orderbook, so it needs to secure contracts by the end of the year to ensure continuity on steel production, and is optimistic that orders are forthcoming.
It is continuing to look to niche markets, such as chemical carriers and supply boats. The yard is competitive in the value added, specialist markets, Anti Pankakoski, vice president of Kvaerner Shipbuilding, explains. "This has been the plan for a number of years, and there is no reason to change it." While supply vessels may look small for a site with 205m panamax beam building berths, they are perfectly suited to the facility, says Mr Pankakoski. It is also bidding on a number of British government projects.
Govan is benchmarked against other yards in the Kvaerner group and has been underperforming, so a new strategy was implemented to reverse losses and improve profitability. Production philosophy has changed completely, with the yard concentrating on the core disciplines of steel and pipe work. Engineering has also been kept in-house, with 60 engineers employed. Steel capacity runs at 20,000t/yr. "The more steel we do in-house, the more competitive we are," explains marketing manager Sam Cameron.
Many other non-core disciplines are now outsourced, in particular where the yard sees elements of risk. This policy has led to a significant reduction in workforce, which is down to below 900 from more than 1500 just over a year ago. There have also been management changes. The yard is now applying best practise, based on group experience, explains Mr Pankakoski. "Efficiency is on a completely different level when compared to two or three years ago." A £7 million ($11.4 million) investment programme is underway, aimed mainly at improving efficiency in Foran 3D CAD system.
Govan has delivered three ships this year; the 36,800 dwt chemical tanker Jo Cypress to JO Tankers, and two type VS483 supply vessels to Toisa; the 82.85 loa x 19m x 7.6m Toisa Intrepid and Toisa Invincible. Propulsion on these ships is provided by two 2,460kW (3,300 bhp) W<#138>rtsil<#138> 6R32E main engines each driving a 1,750kW shaft generator and CP propeller, giving a service speed of 12 knots. They are equipped with a Simrad DP system and twin 735kW (1,000 bhp) VP thrusters fore and aft. Toisa`s manager Sealion Shipping modified the design to provide accommodation for up to 25 personnel, and has prepared the vessels for additional DP equipment for capability in excess of pure supply ship operations. The contract was worth approximately £27 million to the yard. The two Farstad ships are being built to the VS420 design with similar dimensions. Contract value is some £14 million ($22.8 million) per ship.
Appledore Shipbuilders has delivered two ships this year, and has three on order. Toisa will take delivery of two 72m x 16m x 6m 3,150dwt ROV support/supply vessels in February and April next year, and a fishery patrol vessel will be completed for the Irish navy in September next year. There is an option for a second fishery patrol vessel, and the yard is working on two or three solid enquiries, according to Mr Wilson, who is equally optimistic about winning contracts and maintaining continuity. "We can compete, but the pound is hurting us, and interest rates are too high," he says.
Appledore delivered the twin screw passenger ferry Clansman to Caledonian MacBrayne in the summer. The 5,400g ferry measures 99m loa x 15.8m x 5.5m and is equipped with twin MaK 8M32 main engines each developing 3,840kW (5,1590 bhp). Speed at 85 per cent MCR is 16.5 knots. The vessel is arranged for stern and bow loading with a semi-enclosed vehicle deck, and has capacity for 90 cars, or up to ten HGVs on the main deck, and ten cars on a hoistable car deck. Passenger capacity is 634. The double hulled 6,250 dwt product carrier, Lesley PG, was delivered to Campbell Maritime in January.
When Langham Industries took Appledore over in 1989, it had a turnover of £12 million ($19.6 million) and was losing £6 million ($9.8 million) annually. Today, turnover is around £40 million ($65.6 million). Mr Wilson is strongly committed to creating employment, and the yard tries to do everything in-house, including all design work; the Toisa boats have been designed at Appledore, for example. Steel capacity is 150 t/week, and the workforce stands at around 500 people. 13 apprentices are taken on each year. Recent investment includes extending the cutting shed and refurbishing a 75m slipway, which has been used to construct sections, and for repair.
Port Glasgow`s Ferguson Shipbuilders delivered the platform supply vessel Stirling Tay at the end of June, and is scheduled to hand over a final sister ship to Stirling Shipping in February. At the time of writing this was the sole vessel on the yard`s books.
Stirling ordered four similar vessels in an investment worth approximately £55 million ($90.1 million); three at Ferguson and one at Kvaerner Govan. These vessels are also based on the VS483 design from Vik and Sandvik, but have an azimuthing thruster forward in place of one of the tunnel thrusters.
With such a thin forward order situation the yard is obviously looking hard for new orders, and Ferguson`s Ken Fulford explains that they have good prospects for new contracts. "We expect another job soon," he says. But he also comments that the market is quiet, with fewer enquiries than in recent years, and a definite tendency for projects to be delayed.
Ferguson is limited to building ships of 100m in length, and like the others has focused on more complex ships with a high engineering content. The offshore market has been most fruitful recently, but it is also keeping an eye on other sectors, notably the ferry market, where it sees good prospects. The British government announced that Scottish island ferry operator Caledonian MacBrayne has been allocated budget for further newbuilding, for example, and Ferguson has built for the company before.
It also has hopes for the dredger market in the medium term. The yard has a long history of building dredger tonnage, though it has only delivered one in the last ten years. "Dredgers have the high engineering content that suits the balance of people in the yard now," Mr Fulford explains. "We are not fully competitive without a good level of engineering." This means that the general coaster market is generally out of the yard`s scope, unless there is something particularly unusual or complex in the design.
Ferguson employs a staff of around 350, of which some two thirds are permanent. It does its own steel work, and has not been tempted to build hulls at cheaper overseas locations, unlike many of its competitors in The Netherlands and Norway. Ferguson is not convinced that building hulls overseas actually produces the savings they seem to promise.
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