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Juha Heikinheimo believes that there will be enough room for both old and new shipbuilders in the cruise market. Photo: Pär-Henrik Sjöström

Networking is the key
Mr Juha Heikinheimo, President of the Cruise & Ferries business area at Aker Yards, feels that European shipyards have excellent possibilities of maintaining their leading positions as builders of large cruise vessels. However, they will have to be aware of the fact that the shipyards in the Far East are coming on strong.
Today only a handful of shipyards, all of which are European, are capable of building large cruise vessels. Aker Yards is one of them with an impressive list of references. The company’s shipyards have built, or have on order, 15 of the largest cruise ships in the world, including the 220,000 GT giants of the Genesis class being built by the Turku shipyard. The keel of the first of the two Genesis vessels was laid at the Turku shipyard in December 2007.

The ability to manage an ultra complex project such as the Genesis and to deliver the vessel on time is perhaps the main reason for the fact that European shipyards so far are sovereign rulers in the newbuilding market for large cruise vessel. Another key for success is a well-developed maritime cluster with an extensive network of subcontractors, so far a European phenomenon only.
The lead times in shipbuilding are today so short that it is impossible to carry through large and complex projects without an extensive network of suppliers. In a cruise vessel project, the different fields of special knowledge within outfitting are so many that it would be impossible for any shipyard to maintain that in house. The same goes for basic design too, which is almost completely outsourced.

In a large cruise vessel being built by Aker Yards in Finland, approximately 75 to 80 per cent of the total work is purchased from subcontractors. This share varies greatly between the different stages of the project. For example, some 80 per cent of the steel hull of Genesis is built by the shipyard itself, while some 75 per cent of the outfitting will be supplied as turnkey deliveries by subcontractors.

Optimal workforce
Mr Heikinheimo finds that the distribution of work between external and the company’s own workforce is quite optimal as it is today.

“As a matter of fact, we are going to neither cut down or increase our number of subcontractors. Some tasks could be taken back to the shipyards and some others outsourced, if this turned out to be sensible. The situation should remain dynamic all the time, but it must not be too dynamic”, Mr Heikinheimo points out.
He is not worried about the fact that the shipyards are totally dependent on their subcontractor networks.

“Hopefully, all actors in the shipbuilding cluster are dependent on each other, because then we are all forced to act in a responsible way in a long-term perspective. It is a question of economical as well as operational optimisation.”

Growing business
The art of surviving and even achieving success in a future market where the large players in the Far East have a significant cost advantage, will demand a lot of research and development as well as creativity on part of the European builders of cruise vessels.

“One must remember that it is easy to copy a drawing, but it is much harder to copy a whole shipbuilding concept”, Mr Heikinheimo says.

Although the time is not ripe yet, Mr Heikinheimo is convinced that shipyards outside Europe will enter the prestigious market for cruise vessels. He thinks, how­ever, that the European shipbuilding industry will have a future as builders of advanced passenger vessels, if it plays its cards right. One of the reasons for his optimism is that the cruise market still has an enormous growth potential. This means that there will be a steady demand for new cruise vessels for years to come.

“Passengers feel that they get better value for money on a cruise vessel than in any other segment within the travel industry”, Mr Heikinheimo explains.

As long as the cruise market is healthy and growing, he believes that there will be enough room for both old and new shipbuilders.

“I definitively think that the new actors will be coming from Asia. The shipyards in Europe will then have to find means of compensating their disadvantages in labour costs by technical superiority and increased efficiency.”

//Pär-Henrik Sjöström

Latest update 19-12-2007 10:00

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