Facing the challenge
Arnout Damen outlines his thoughts on how Damen is facing the challenges of today and those certain to arrive in the future.
Reflecting on the past year, Arnout Damen, Chief Operations Officer, is keen to stress that diversification and specialisation in niche markets will continue to be Damen’s core values, whatever challenges it faces in the future.
We are a family business and we will stay a family business.
For the fifth consecutive year Damen Shipyards has experienced a healthy growth in its orderbook and in its profits and this is despite a difficult operating environment, particularly in the “traditional” shipping markets and with most parts of Europe continuing to struggle to find any economic growth.
The vision to be the market leader in all of its niche sectors is still at the heart of Damen, he says. Diversification in products and in a geographical sense is very much the foundation of Damen Shipyards Group. “We have an extremely diversified product portfolio and fortunately we can absorb local crises. Although Damen is based in the Netherlands we work and deliver our vessels all over the world. Furthermore, in many regions there are no signs of an economic dip (Africa, Australia, Brazil) and we are active in all of them.”
Being active in so many markets also somewhat protects the Group if one sector experiences a dip. “While the shortsea market for cargo vessels and inland shipping is still in trouble, there are many more opportunities in the oil and gas business and in offshore wind for instance,” he points out.
And in 2013, even though there has been a very solid year behind the group, there is no sense that Damen is resting on its laurels. There will undoubtedly be more pressure from competitors, particularly in the Far East, he stresses. “There is so much capacity in shipbuilding, particularly for larger vessels and in Asia. No doubt more yards will go broke. And of course this also means that they are looking into the markets we are in. But they really have a completely different vision of the shipbuilding industry.”
Ultimately, we want to continue to offer a quality product for a competitive price. And, last but not least, we like what we do, so we want to keep on doing it!
The standardisation concept and the focus on quality are just as important now as they were when the group was a much more modest organisation. And while Damen does not want to grow purely for the sake of it, the breadth of its portfolio is being expanded. Damen has recently added to its product range to include larger offshore vessels such as the 200 tonne bollard pull Anchor Handling Tug Supplier and the new Utility Vessel series, which ranges from 20 m to 60 m. New offshore construction vessels, ROV support vessels and others are also under consideration.
“We are renewing our existing models and developing new models adapted to the modern world by investing in innovation. Vessels have to be ready for new rules and regulations.” Damen’s Research & Development work is continually addressing all of today’s concerns such as reducing emissions and having the best seakeeping behaviour for efficient operations and for the safety and comfort of the crew. Damen continually strives to innovate and to reduce the environmental footprint of the building process and of a vessel throughout its lifetime.
“Our R&D programme is a big advantage for us, we don’t have to reinvent the wheel each time because we have decades of experience and customer feedback and this is embodied into each new design. An example of this is the recent launch of the first ever Damen Hybrid ASD Tug 2810.”
Specialising in niche markets
Mr Damen outlines the company’s focus for the coming years. “We want to be number one or at least in the top three in all of our niche markets.”
However, he stresses: “Growth is not a goal in itself, we have to continuously focus on the cost price of our products. Cost and quality are always utmost in our minds. Therefore we will also remain focused on our activities in every niche and work to continually improve our products and quality to stay ahead of the rest. We have to understand our customers’ changing requirements and give them what they need if we are to retain this leading position.”
Total Cost of Ownership increasingly important
Increasingly, customers are more concerned with the Total Cost of Ownership and full lifecycle of the vessel, says Mr Damen and he expects this trend to continue in the future. “Clients are now buying vessels based on an estimation of the TCO, not just the original vessel purchase price. Depreciation and long-term maintenance costs are certainly considered more nowadays. This is an advantage to us as our vessels retain a very high second-hand value and have low maintenance costs because of the quality of the build, the warranty structure and lifecycle maintenance programmes.”
This year Mr Damen is looking forward to following up on the success of the Damen Fast Crew Supplier 2610 with the arrival of the 2008 version in the second quarter and he is very positive about prospects for the 200 tonne BP Anchor Handling Tug Supplier.
The philosophy that Damen has built its success on remains unchanged, he stresses. “I don’t want our customers ever to feel alone, we always want to help and make sure their vessels keep on going, doing the tasks they were bought for. Customers can call us 24/7 if they need spare parts or any other service. Ultimately, we want to continue to offer a quality product for a competitive price. And, last but not least, we like what we do, so we want to keep on doing it!”
Taking the long-term view
Arnout Damen is also mindful of the importance that Damen stays true to its roots, even though it is a much larger organisation now. “If customers buy an 8 m tugboat, a 100 m offshore vessel or a 50 m patrol vessel, they are all equally important to us – and they should be. We have to keep an open culture and an open door; clients should feel welcome here. In short, we want to give everyone the red carpet treatment.”
“We are a family business and we will stay a family business; that is an important fact. We are not in this industry for short-term profits – we always take the long-term view. This gives certainty and allows us to invest in developing the skills and knowledge of our people and to play a pioneering role in the shipbuilding industry, making sure we can face the challenges of the future.”
Chief Operations Officer
Being Kommer Damen’s son some would assume that it was inevitable that Arnout would enter the Damen Shipyards Group as soon as he finished his studies. But this was not the case with Arnout.
He did want a career in the shipbuilding industry from a very early age. At Dutch primary schools all children have to give talks about subjects of interest to them. While most choose to talk about their pet hamster or rabbit, Arnout laughs, his speech was not typical. “As a 10-year-old I told my class how I wanted to be a shipbuilder and about the horsepower of tugboats!” He admits it went above the head of his classmates – but clearly the ambition was there.
However, he was keen to be independent and forge his own path. This led him to create the Navingo publishing group based in Rotterdam, which boasts several well-respected titles and conferences such as Offshore Wind Magazine, the Maritime & Offshore Career Event, DredgingToday.com and the Offshore Energy exhibition. After more than a decade as one of the directors of Navingo, Damen’s former COO left to become CEO of Germanischer Lloyd in 2010. That was the moment Arnout was invited by his father Kommer to join the company. He was given 24-hours to decide. “I knew it was the right opportunity and right time to join the business.”
Favourite Damen vessel
“The new Anchor Handling Tug Supplier. With a horsepower of 18,000 and 200 tons bollard pull it is incredibly powerful and its strength is really expressed in its look.”
Within Damen the new design is known simply as “white” to express the fact it is entirely new and in contrast to any other tug Damen has built. There is already a great deal of interest in the new design and he is hopeful that the first will be sold in 2013.