Damen broadens strategy: “Demand for large RoPaxes is on the rise”
Source: Maritiem Nederland
Author: Lennart Kik
Chiel de Leeuw: “We aim to land one or two orders within the first year for up to four ships in total.”
“It sure is about time we put a new large ferry in to the market”
While standardisation has been a unique selling proposition of Damen Shipyards for many years, it also has a long and successful track record of ‘engineering to order’ mid-size custom vessels for a wide range of applications. Now, thanks to the acquisition of the yard in Mangalia (Romania), the group is now also able to focus on the design and construction of larger ‘engineering to order’ projects in the offshore, cruise and RoPax markets. Chiel de Leeuw, appointed last year as the sales director for Damen’s new RoPax division, explains its plans for the RoPax and RoRo markets.
The width of the available docks has up to now been Damen’s main restriction to enter these market segments. “The 30-metre dock in Galati is too narrow for the new projects. With its 60 and 48-metre wide docks, Damen Shipyards Mangalia is the largest yard in the group. The ships you see lying there are 230 metres long”, De Leeuw says, pointing at a big photo in his office. “Although still an artist’s impression today, I hope this will soon be reality.”
The ball started rolling with the acquisition of the private shareholding in the Romanian yard. In November 2017, Damen reached an agreement to acquire the shares of Daewoo Shipbuilding & Marine Engineering, with the remainder continuing to be owned by the Romanian government. Following the finalisation of the takeover in July 2018, the yard became a joint venture with Damen Shipyards responsible for the operational management.
Damen Shipyards Mangalia’s joining the Damen Group was the impetus for establishing a new business unit for the product/market areas of cruise, RoPax and offshore. Chiel de Leeuw’s dedicated RoPax commercial team was set up as, while there are overlaps with Damen Group’s existing portfolio, there is a clear distinction too, A large proportion of the projects that it will be targeting will only fit in Damen Shipyards Mangalia, hence the dedicated commercial team, and the potential is certainly there. This segment experienced a big peak in demand some thirty years ago and many ships of that age are now up for replacement. The resulting demand is likely to persist for some time.
An image of the recently acquired yard in Mangalia
“The team is eager and has enormous drive,” De Leeuw continues. “When you enter a new market segment, you must throw in all of your energy. When you’re working on large RoPax ships only, you get to know the market very quickly and develop valuable in-depth knowledge of the customers’ business models. That way, you’re able to offer each customer important added value.”
Every one percent of additional efficiency that you can find for the next forty years is worth the effort
As an area sales manager your work involved building a network and closing deals. In what respect has this changed?
“There clearly is a different dynamic now. The projects are much bigger and therefore last longer. Although the activities basically are the same, the accent differs. It comes down to developing the project in such a way that an optimum design is created that fully meets the customer’s demands.”
You have chosen to broaden the strategy by entering new market segments. Still, much remains the same.
“You’re right. When tapping into new markets, we won’t lose sight of the advantages of standardisation. This will, however, mainly involve standardising processes and project-customer matters. The knowledge and experience gained from one-off projects can be reused in follow-on projects. Because Damen develops its projects in-house, our knowledge will grow very rapidly. We’ll try to deploy all data in a modular way in the next project. Customers’ demands are highly specific in these market segments; ships are generally designed entirely with a specific route in mind. Considering their long lifespans, it becomes paramount to keep the TCO (Total Cost of Ownership) as low as possible. Each customer’s individual demands will mostly be truly different from those of others, which implies that you’re building a substantially different ship each time. Meanwhile, we’ll try to standardise our methodologies and engineering.”
Standardisation is quite common in the aircraft industry.
“For various reasons, not all segments of shipbuilding are that far advanced yet. But there’s a first time for everything. Standardisation wasn’t common in the offshore industry until Damen started building standardised platform support vessels on a speculative basis. Who can tell what level of standardisation we might see in large RoPax ships in the years ahead? I personally think that we’re heading towards a more modular approach.”
Damen has been very successful in selling a new generation of ferries. The largest of them is 98 metres in length.
“In the past few years we have delivered many highly complex, engineered-to-order ships of one hundred metres or more. This hasn’t included a RoPax of that size yet, but yes, it’s high time we put a new large ferry in to the market. We are currently seriously involved in a number of projects. You don’t have any certainty until there’s a signed contract, however,” he says, with a smile.
Could the electric ferries that you’re building in Canada be scaled up to more than 120 metres?
“Although that would probably be feasible in the future, we don’t anticipate any large full-electric projects just yet. Large RoPax ships tend to sail at high speeds, often in excess of 20 knots. What you will see is new ships having hybrid options, for instance involving a generator serving an auxiliary engine just for leaving port, with higher speeds in open water being achieved using conventional engines. In addition, there are many LNG projects currently under development. Many customers, both in Europe and in Canada, wish to genuinely innovate. Damen has the knowledge and experience necessary for the construction of electric and hybrid ferries, as well as that for LNG-powered ships. In this field too, we’re able to create added value for our customers.”
One-offs involve close consultation with the customer. How do you make this work?
“With this kind of project, you usually see a concept being distributed among a number of yards. A shortlist is subsequently drawn up on the basis of the different quotations. We have the big advantage that we can develop projects in partnership with leading naval architecture agency Knud E. Hansen, which is well known for its experience in the ferry and cruise ship markets. We are, of course, also happy to work with our clients’ own preferred naval architecture and engineering agencies instead.
Damen furthermore has its large and innovative research & development department with a wealth of expertise. By involving all these disciplines in a project at an early stage, we as Damen are really able to add value. Only then, when a project really starts, can you go into the details with the customer.
At this point we address the functional demands and the operational profile the ship has to comply with, and also analyse the current ship’s performance data; all part of significantly adding value. Every one percent of additional efficiency that you can find for the next forty years is worth the effort. When you get the space to do this together with the customer, it results in the best projects. Then, at the end, everybody is happy with the final result.”
Do you start anticipating the smart maintenance possibilities as part of this design stage?
“We notice that operators are increasingly looking at smart ways to save costs. Remote monitoring is only the beginning; our advice is to take it a step further. As an operator or shipowner you will then be able to not just monitor the engine’s efficiency, but also a wide range of other mechanical and electrical systems including propulsion, environmental and hotel systems. Information on crew operations can also be collected and analysed to optimise efficiency. Everything can be measured these days. You can subsequently link maintenance to this so that you’re able to apply condition-based maintenance instead of planned maintenance. Every euro that this will save you over the whole lifespan will add up to serious money.”
“We talk to masters, chief engineers and superintendents and they all have repetitive actions that they actively dislike. When you’re able to automate or simplify such actions, operations become more efficient while the crew gets motivated at the same time. This way, the knife cuts both ways.”
“We are still having discussions with operators who don’t want a yard or an OEM supplier to monitor their operations in this way. But this is more a matter of unfamiliarity than one of serious aversion. But this clearly is where it’s all going. The same goes for autonomous sailing. I personally don’t think ‘autonomous’ to be a goal in itself, but believe that the quest for it will produce many interesting innovations.”
How many large RoPax ships do you expect to build in the near future?
“There’s quite a peak on the way which is expected to last for the next five to seven years. It’s too confidential to give exact numbers. We aim to land one or two orders within the first year. These projects often involve two ships, so we’d be talking about up to four ships. We’re working on a number of projects, but only when the designs are advanced enough will the orders be placed, enabling us to start production. There are more projects out there than we can build; the number of construction slots available is limited. Only a few yards are able to build ships of this size, certainly in Europe. We expect that this will be to our advantage.”
What is your favourite Damen ship?
“Our next large RoPax. Its delivery date? In 2021.”
Résumé Chiel de Leeuw (43)
– Damen Shipyards Group, sales director RoPax & RoRo, since May 2018
– Damen Shipyards Group, sales manager Scandinavia, 2012-2018
– Gaastra Pro Gear, international sales manager, 2010-2011
– Nuon Sales, project manager, 2008-2010
– Contest Yachts, manager sales & development, 2004-2008
–The Hague University of Applied Sciences, Technical business management & top year Management, 2002-2004
– Haarlem Technical College, bachelor Naval architecture/marine engineering, 1998-2001