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Back to SSG 8
Photo: Anna Lundberg
Looking for the perfect time to order
John Engström at Swedish Dag Engström Shipping stands with the specification in hand, funds are substantial after several good ship deals and he has been travelling the world of shipbuilding yards for some years now. Everything is prepared, down to the last detail, for ordering a number of new ro-ro ships. But when is the right time to order?
It started with the ro-ro Romira. From the time she was built, John Engström has taken over the leading role in the family company of Dag Engström Shipping; until then his parents Anna-Lisa and Dag Engström – still very active in the company – stood at the helm.
AThe year was 2000. John Engström was about to negotiate his order with the Zhonghua Shipyard in Shanghai. This was a time when yards were hungry, so the little shipping company could afford to be a very awkward customer with many and specific requirements.
| Master/Chief Engineer John Engström |
39 years old, lives in Lysekil with his wife and two children.
Took part in building the Helena for the family shipping company in Korea in 1991, after finishing his Master Mariner education. A few years later he graduated as Marine Engineer as well, and worked in the engine department.
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Has done further training in welding, electronics, CAD and management.
In the past few years he has taken over the leading role in the company after his parents.
Recently elected to ABS as Member.
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Experts lined up
John Engström describes how he had a dream scenario:
A“It was a shipyard that wanted to build a ro-ro to have as a reference for future ro-ro and ro-pax building projects. The yard was not very large and thus we were able to have great influence on the process and have close relations to the yard’s representatives. But the yard was large enough to have good equipment and skilled staff.”
AThe Engströms had the yard to send a delegation of around 20 people – one from each competence area and with authority enough for direct decision-making – to the design company Skipskonsulent, which the Engströms worked with at the time. They also invited the major suppliers, who came and presented what they had to offer. They worked their way through the building specification, line by line, and everyone present had the chance to comment or to ask questions.
A“After eight weeks we were finished and we felt that we had had the time to really explain in detail what we wanted and also what we wanted to avoid. It was a close, very pleasant way of working and the result was that all we had to do once we got to the shipyard was to push the button.”
AOn delivery the Romira was everything the Engströms had wished for: A well-built ro-ro ship that was a pioneer in several ways, with a 30 per cent lower bunker oil consumption and half the NOX emissions compared with conventional ro-ro ships. The building of Romira focused on environmental concerns and many solutions were completely new for that type of vessel.
Engström’s pride and joy, the Romira, is on 13,000 DWT and can take three kilometres of rolling cargo. She was sold to Cobelfret in 2002. Photo: Dag Engström Shipping
A good offer
After a very short time in service, the Romira was sold to the charterer. When SSG visits Anna-Lisa, Dag and John Engström in Lysekil in March, it is obvious that their pride in the Romira – their own design down to the last bolt – is still great. Why did they sell her? Well, they simply got an offer that was difficult to refuse. John Engström explains further:
A”We thought we would be able to order again directly. We hoped to order two ships; it is so much easier with two identical ro-ros when charterers arrange routes and also when it comes to spare parts and crew. But it was about then that prices started going up, up and up. It was a good time for selling, but bad for placing new orders.”
AAnd time passes. The Engströms have been without ships of their own since 2006, when the Helena was sold – and the right time to place an order has still not come. The newbuilding price for a ro-ro has gone up by over 100 per cent since the Romira was delivered. There is a total of ten thousand ships on order at the world’s shipyards, at a value of close on 500 million dollars.
AThe Engströms await a more normalised market. Meanwhile they polish their concept and keep a close watch on several newbuilding yards around the world. The plan is to order two plus two ro-ro ships of Romira’s type. The next generation will be a development of the concept, where they will make some charterer-optimized solutions, such as:
- Four cargo decks instead of three,
- ice class 1A Super instead of 1A,
- shore-based ramp to upper deck,
- higher service speed and
- environmental optimization.
AThe Engströms’ own calculation asserts that if they add seven per cent to the newbuilding price, the technical life of the ship is prolonged by 100 per cent, and this is a cost that the shipping company has the expressed ambition to take.
Photo: Anna Lundberg
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Photo: Anna Lundberg
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| Dag Engström Shipping |
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Founded in 1964 by Dag Engström, Master Mariner. Dag’s wife Anna-Lisa Engström comes from a family with a further 100 years in shipping.
The shipping company’s main business is to plan, build and run its own ro-ro ships, wholly under own management, for stable charterers.
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In the past 30 years, the company has been active in ro-ro, for the past ten also in tanker shipping.
Anna-Lisa and Dag Engström are today both over 65 and now have a more administrative role in the company, but emphasise that they are far from retiring.
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Too finicky
Dag Engström Shipping thus suffers from quite some choosiness in the choice of newbuilding yard, at a time when the frenzy at the yards leads many to build to a minimum standard. The Engströms are only interested in building very close to their own specification, which means that at present they are not particularly attractive customers.
A“In many cases, the yard won’t allow the suppliers that we prefer, even if we say that we are willing to pay more for it. And when you can’t decide what suppliers to work with for say 30 years to come, then it’s really no good.”
AHis father Dag Engström adds:
A”If we’ve been able to wait this long, we mustn’t do anything foolish. Some charterers say we are too picky, they say they can live with one thing and another – and sure, we understand that. Having 100 per cent Romira’s standard, that we can just forget, but we want at least 95 per cent or 90, but certainly not 20.”
A“We work in the long term, the goal is not to build and sell, but to get a good ship that we can live with. We are not under any pressure. We can wait. It’s just that it’s boring to wait”, says John Engström.
AHe has several examples of minimum standard with him from his trips to the big Asian shipyards:
A”I have seen ships that just have concrete in the corridors, they haven’t bothered to lay a vinyl floor covering or anything. Then plastic tables and chairs mounted on steel tubing, that’s it, when you come into the mess. Awful to see.”
AHe talks about a visit to a 50,000-ton product tanker at one of the most renowned shipyards in the world:
A”On the bridge, there’s one radar at one end, one at the other and the VHF in between, so you can’t reach to do two things at the same time. Out on deck you can see badly bent flat bars holding the cables, after a year or two they’ll have rusted away.”
A”When you come out and see such a standard, there’s hardly any point in starting to discuss things. The yards build at minimum standard and all solutions are made to be optimal for the yard during the period of building, with no consideration of how it will be when the ship is put into service.”
AThere are, however, several yards around the world that John Engström has visited, where he may be willing to place an order. Contacts with the yards are tended continually while waiting for a slot.
| John Engström on |
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... Vietnamese yards: “I’m going to Vietnam on Tuesday, for the third time in five years. Five years ago the state started to pump in money to build up the shipyard organisation. They saw how well things were going for China, Korea and Japan. They have fantastic production equipment at some yards – slipways, docks for VLCCs, CNC and plasma cutting machines, everything you could wish for.
But they haven’t managed to grasp this competence, it’s like it was in China 10–15 years ago. When you sit down with the yard management to discuss things, they don’t speak English. Then a little Vietnamese who hasn’t a clue about technical English comes to translate … It just becomes gibberish.
But now the Vietnamese shipyard industry is beginning to get going, they have won major contracts.”
... crazy order books: “I talked with a yard in China before I set off in December and they were interested in looking at ro-ro, they wanted to get into the niche. But then I spoke with the Jotun boss in Asia: The month before, he was going to drive to the yard, but didn’t get there because there was just a sea of mud where he was supposed to drive. They now have an order book of 34 larger vessels – with everything from 54,000-ton bulkers to FPSOs – but they had no road to the yard. It’s just without common sense.”
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A”When it does come, things can go very quickly. If it’s a yard that has lost some contracts, has the workforce and everything established and needs something quickly, then we will be there, ready with all the documentation. We have talked with the suppliers and checked on delivery times, equipment and everything. We have a complete concept and can just go in and start. That’s our advantage; since we are so small, we can make rapid decisions. We can go there, sit down on the spot and solve a problem, if one should arise.”
Latest update 16-04-2008 17:22 |
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2008
