Less is better

While United Shipbuilding Corporation (USC) is amid reshuffling of its top management, ambitious plans announced by the Corp., small enterprises and companies are successfully building new ships, including state-of-the-art ones.

High stakes

On July 1, 2012, USC President Roman Trotsenko handed in a resignation notice. During his leadership the Corporation has announced a sufficient number of ambitious plans with very dim outlook. With Mr. Trotsenko stepping down the projects fate is even more uncertain.

For example, there were plans to build a new shipyard on Kotlin Island of St. Petersburg), two new shipyards in the Far East ("Vostok Raffles," and "Zvezda DSME») with participation of foreign partners - shipbuilding holdings in South Korea and Singapore.

Concerning the project of New Admiralty Shipyards on Kotlin Island, in early June 2012, the Management Company for the construction of the New Admiralty Shipyards reported that the Russian Defense Ministry had taken steps to transfer from federal ownership to St. Petersburg the area of 73.5 ha, designated for the construction of the New Admiralty Shipyard. The corresponding order was signed by Defense Minister Anatoly Serdyukov.

By the end of 2012 this piece of land for the future shipyards encompassing about 150 ha, according to the city government’s order will be handed over to the developer - Management Company for the construction of the New Admiralty Shipyards.

The plot transfer is very important for the project because in this case the customer-developer will not need to perform reclamation of a similar-sized area in the Gulf of Finland, which would require considerable financial and time costs.

"Such a solution dramatically reduces the cost of the project," said General Director of Management Company Alexander Voznesensky. Besides, the company will not have to undergo a two-year process of legalization of reclamation according to the Russian legislation.

But the need for reclamation area was not the only problem. The project provided for relocation of some facilities from existing Admiralty Shipyards, located downtown and plans for building new bridge across the Neva River. However, the bridge design has not yet been approved for different reasons.

It is still unclear why the relocation itself was needed and how it would affect the execution orders placed at Admiralty Shipyards (ie, the state defense order for the construction of submarines) as well as how the USC team intended to save jobs while transferring the facilities to the remote island of the city.

Moreover, the negotiations between USC and South Korean company STX, participating in the JV project, have ended just recently. Today, they are talking about a new configuration of the future joint venture – it is supposed to create a joint operating company, in which 75% will be owned by USC, and 25% - by STX. As explained by Roman Trotsenko, the joint venture will focus on the construction of gas carriers of displacement of 80,000 and 200,000 tons at Admiralty Shipyards in view of planned relocation.

Trotsenko said that "this will be the operating company. All property, equipment, construction will be financed for our money. It is not assumed that our Korean partner will be involved in it. They will be (engaged) only in operation only, in the technology.” Roman Trotsenko also noted that USC is planning to get a result from the Korean partners of the basic technology of storing liquefied and compressed natural gas, which are necessary for the construction of LNG.

Earlier, STX was expected to participate in co-investment of the civil part of the construction project at the Kotlin-based shipyard.

There is also contradicting information on other joint shipbuilding projects of USC with its foreign partners - namely, the construction of new shipyards "Vostok Raffles" (a joint project with Yantai Raffles) and "Star DSME» (a project with South Korean Daewoo Shipbuilding & Maritime Engineering).
According to industry experts, South Korea and other major shipbuilding countries actually are not interested in launching new shipyards in Russia. These plans might be seriously considered a growing market environment, but now the world shipbuilding industry is experiencing a downturn, due to the excess tonnage in the shipping market. Not a few shipping companies are getting rid of a relatively new fleet, which becomes unprofitable.

South Korean and other companies are underperforming, social tension rises. In this situation the appearance of additional facilities in Russia for foreign partners is undesirable. Especially when it comes to the transfer of shipbuilding technology to the Russian side.

As Roman Trotsenko predicts, the situation should stabilize by 2015, which is related to the cyclical development of the global shipbuilding industry, and the next "boom" will occur in 2015-2017. This prediction correlates with the expectations of the leading global carriers, counting on reaching a balance between market supply and demand.

The issue with Baltic Shipyard has not been so far resolved, which is still troubled by ongoing litigation. Created with the direct support of the top Russian officials LLC Baltic Plant-Shipbuilding has put employees of Baltic Shipyard on the job and has formed a newbuilds portfolio, which includes, among others, a 25-mW open sea icebreaker. Currently, the company is preparing a project to modernize shipbuilding production, which will make possible the construction of 100-mW ice-breakers (though such projects do not exist). The Baltic Plant-Shipbuilding does not have its own shipbuilding facilities and has to lease them from Baltic Shipyard.

Thus, the Corporation has not yet been able to significantly advance in the field of large-scale shipbuilding. However, there is no urgent need, except for ice-breakers, for such orders, since the arctic large vessels will be needed, especially for operation in the Arctic offshore fields, which projects are only in the early phases of implementation.

Small but effective
Presently, Russia has a significant progress in the development of largely medium-and small-tonnage shipbuilding.

USC contributes also to the newbuilds segment. Recently, the Corporation has acquired a controlling stake in Nizhny Novgorod-based Krasnoye Sormovo, which had received an order for 10 ‘river-sea’ tankers of project RST27 for Volga-Balt Tanker. The first five newbuilds contract was signed in June 2011, the second order for the next five tankers was signed in October of that year. All tankers will be launched ahead of the contractual terms.

The Project RST27 Volga-Don-max tankers with six cargo and two slop tanks are designed for mixed river-sea transportation of crude oil and oil products (two types of cargo), including gasoline, with no flash point limits (permanent temperature of 60º C). The 140.85-m-long, 16.6-m-wide and 6-m deep tankers satisfy  the Volga-Don shipping channel dimensions.

The tankers are being built at Okskaya Shipyard (part of UCLH), which also executes contracts for RSD 44 project vessels for Volga Shipping. This serial ships are intended for inland shipping of dry bulk, general cargoes and containers.
A series of 10 bulk carriers of RSD49 Project is being constructed at North-Western Shipping Company and at Nevsky Shipyard, a private company that does not belong to any holdings. The RSD49 project Volga-Don ships feature the maximum possible dimensions for the canal. The second serial bulker is scheduled for launching on June 26, 2012.

Another company - LLC Nobel Bros Shipyard is also successfully executing contracts for the RST25 project tankers for Moscow River Shipping Company. The RST25 ships are completely new type of river-sea-going tankers featuring a high class of ecological safety and automation. The project was designed at Marine Engineering Bureau. Besides, the shipyard is building a series of oil boom workboats of project A40-2B.

Very small businesses, which do not even have their own production facilities also demonstrate good results, like Composite Shipbuilding that leases the shipbuilding facilities at Vladivostok-based Vostochny Shipyard and the assembly yard at Almaz plant in St. Petersburg. The company is building a composite hull catamaran of its own project. The series include: 4 vessels of PACIFICO PATROL 167 (a high-speed patrol boat, featuring high seagoing and speed capabilities), 40 boats of PACIFICO EXPRESS 30 (a catamaran for 30 passengers), and 10 boats of PACIFICO EXPRESS 150 (a high-speed passenger catamaran with a capacity of 150 persons. The HSVs are scheduled for completion in the summer season of 2013.

So, the actual situation in the Russian shipbuilding industry still only supports the basic law of economics – the demand and competition encourage marine solutions development. And USC with its large-scale ships plans will have to wait till the environment in the world shipbuilding market is changed and offshore projects start.
Vitaly Chernov.