Thanks to its business model and flexible cost base, Europe based Aker Yards manages to be competitive. “Several yards may be involved when we build a vessel,” explains CEO of the 17-yard group Karl Erik Kjelstad.
Aker Yards is one of Europe’s largest, and among the world’s five largest shipbuilders. Building complex and sophisticated vessels, it virtually sets new standards with almost every ship. With a history lasting for three centuries, the company’s product range today includes cruise ships, ferries and merchant vessels as well as offshore and specialised vessels.
The world’s biggest cruise ship so far, the Freedom of the Seas was delivered recently. This ship was built by Aker Yards at Turku in Finland.
“This is an excellent example of continuous innovation and a good customer relationship,” says Karl Erik Kjelstad, who has been Aker Yard’s CEO since 2003.
Growing together
“We have cooperated with Royal Caribbean Cruiselines (RCL) for more than 35 years. Our collaboration started with the Song of Norway in 1970, and since then we’ve been constantly developing new concepts together that have been trend-setters in the cruise segment. We try to listen to our customers; what they want and what their ideas are. In this way, our customers have grown together with us,” he says.
However, the Freedom of the Seas’ world record will soon be broken. Aker Yards will shortly start to build an even larger ship for RCL, Genesis, and Karl Erik Kjelstad has great faith in future growth in the cruise-ship industry. This is why Aker Yards acquired Alstom’s Chantiers de l’Atlantique yard in France recently. They had been looking for a good shipyard with expertise and experience in building large cruise ships.
“It took 2 million engineer hours to develop the prototype of the Freedom of the Seas, which represents a peak for our engineering resources. With the acquisition in France, we’ll have more resources for coping with such peaks,” he explains.
Increased Arctic expertise
The company is also a specialist in ships operating in Arctic areas. In 2003, it realised that more and more projects required Arctic expertise.
“Having operated an ice lab in Finland since 1970, three years ago we wanted to extend our activity in this segment and built a new, larger ice lab. We’ve also established a separate company in Helsinki together with ABB Wärtsilä and Aker Kvaerner. Aker Yards now have excellent expertise in ice and are perceived as an interesting supplier. We have actually built 65% of all the icebreakers in the world,” he states.
The company has just delivered the Norilsk Nickel which is a specialised container ship that can go both forwards and backwards, a so-called “double acting ship” with full ice class. This summer, Norilsk Nickel signed a contract for building another four vessels. The company has also delivered a ship with a similar solution which now operates as a coast guard vessel at Svalbard, and the latter is classed by DNV.
“We intend to work with DNV in the future, too,” says Karl Erik Kjelstad.
Advanced technology for the offshore sector
Another core area for Aker Yards is the offshore sector, for which it has developed new designs and concepts.
“The customers define their wants and needs and we contribute our own thoughts and ideas. Our technological development takes place through projects and good relationships with our customers,” he explains.
Lately, the company has taken part in developing a concept using concrete in a ship hull, and a prototype is now being built in Germany. They have also developed an LNG concept involving a new containment system that is both safe and production-friendly. DNV has been the technology partner in the development of both these projects.
“DNV has wide ranging expertise and a long tradition of running innovation projects. This has been useful for us in
our continuous struggle to be pioneering,” he explains.
Success in high-cost countries
Aker Yards has managed to find a balance and be successful in building ships in high-cost countries over the past few years. It has done so by finding niches to which it delivers special ships with a high technical content. The ships’ hulls are built in Romania and Ukraine.
“Precise planning and innovative development are crucial to achieving design and construction solutions for specialised vessels. Typically, our customers present their framework requirements, challenging our ability to identify and solve their problems. Unconventional and innovative thinking and a wealth of experience along with modern project planning shorten our delivery times. In total, this means that we are an interesting supplier,”explains Karl Erik Kjelstad.
The company has prepared a thorough strategy for what it is to manufacture itself and what is to be outsourced. A lot of the equipment with a high-tech content is currently manufactured by the maritime cluster in Norway.
“There has never been so much maritime activity along the Norwegian coast as there is today,” he states.
Hands-on management
Another important criterion for success is to develop a company culture that supports the goals which have been set. Karl Erik Kjelstad has great faith in a hands-on management philosophy. This entails to be available to customers 24/7, a dedicated staff with a high level of expertise, and placing emphasis on building long-term relationships.
Secondly, a successful company manages to keep its staff: “We make conditions suitable for a lifetime career in Aker Yards,” he concludes.