Nordic Engineering on Russian shipbuilding and import substitution

In his interview with IAA PortNews, Chairman of Nordic Engineering BoD Nikolay Shablikov tells about the company’s promising projects, problems of import substitution in the segment of ship equipment and possible solutions.

- Mr Shablikov, what are the current projects of Nordic Engineering?

- First of all, it is modernization of two research vessels of Shirshov Institute of Oceanology of the Russian Academy of Sciences (IO RAS): R/V Akademik Nikolay Strakhov and R/V Akademik Sergey Vavilov. The ships were built in Finland in 1980s with application of advanced technical solutions in designing and construction. However, the progress never stops. The time of the ships operation has seen considerable advancement of both scientific equipment and scientific research technologies. Our task is to upgrade those ships in terms of extension of their functionality required for contemporary studies and in terms of their habitability. The project foresees replacement of research facilities, crane equipment (with the purpose to raise its lifting capacity) and winches, expansion of the laboratory space and refurbishment of the interiors. A separate issue is the compliance with environmental standards, particularly sulphur content in marine fuel. Installation of scrubbers is under consideration as one of possible solutions.

The main task is to ensure at least 10-15 years for scientists to conduct their research in safe and comfortable conditions. As of today, we have completed the basic design for both ships and the customer has approved the general modernization concept with the specific solutions currently being included into the engineering design and a detailed design documentation.

Simultaneously, we are looking into modernization of two more ships built in Finland, the Peotr Kotsov and the Grigory Mikheyev. Those ships of Hydrographic Company also need modern equipment of special purposes and more comfortable habitability conditions. We completed the concept designs for those ships last year.

We are also actively engaged in designing of new vessels, primarily search-and-rescue ships. It is our traditional activity. Two 7MW multifunctional rescue ships of our MPSV06-NY design, the Murman and the Beringov Proliv, were built and put into operation in 2015. With respect of their operational experience, we developed an improved design, MPSV06М, under the order of Marine Rescue Service.

Besides, our company continues implementing the order of the State Customer Directorate for development of a complete package of engineering and design documentation for firefighting and rescue tugboat of Project NE011 being built by Akhtubinsk Shipbuilding and Ship Repair Yard in the interest of Marine Rescue Service.

With our expertise in designing of rescue ships, we can offer our customers the most balanced technical solutions in this segment. Over the period of operation we have ensured a sufficient capacity of participation in upgrading this segment of the fleet.

We are working on designs for a technical fleet such as bilge water removing ships. Like in other our projects, we offer a comprehensive approach. Basing on our own experience and best practices of our colleagues including foreign ones, we are striving to provide our customers not just with ship designs but with a comprehensive solution for their tasks. We look deep into all current design developments and consistently collect data on ships operation experience and conditions, we interact with the crews. As a result of those activities, our designs are not just an engineering concept on paper but a thoroughly polished ideology comprising advanced technical solutions aimed at effective, economically viable, safe and comfortable operation of ships. In this respect, we adopt and develop the experience of the leading design organizations such as Marine Engineering Bureau we have been cooperating actively and fruitfully.

We also deal with designing ships of Russian River Register class. For example, we are involved in designing of Russia’s first e-ferry as a co-contractor together with Kaliningrad State Technical University (general contractor) and Ushakovo Yards (the other co-contractor). The ferry intended for Baltiysk – Baltiyskaya Spit line of about 800 meters is quite expensive, some RUB 300 million, but its operational expenses will ensure savings. Our particular task under the project included optimization of construction costs for further application of newly found solutions on inland water ways. The design documentation has already been handed over to the general contractor with Ushakovo Yards having commenced the construction which is to be completed by the end of 2022. Yet, the delay is possible due to the pandemic.

Infrastructure for charging the ferry is to be ensured by its operator, Baltic Shipping Company. As far as we know, everything is ready for the ferry operation today.

- What is the local content foreseen by this ferry design?

- As for the ferry components, its propeller-rudder system, batteries and control system are of foreign origin. Of course, we had considered domestic production of that equipment but, unfortunately, integration of Russian suppliers’ products would considerably affect the design period. Although those components can be manufactured in Russia, there is no integrator to develop a system for a control of the propulsion/steering unit or batteries to ensure a correct charge transfer to the unit. Therefore, we opted for the system by Italian company Transfluid which is looking into establishing its production in Russia.

Operation of that ferry will let determine how Russian suppliers can be involved in such projects. Actually, the design foresees that almost all equipment except for the above mentioned one can be of Russian origin.

I expect that the ferry link can require several more ships of that design. They can be also considered as a solution for inland water ways.

“The ferry’s performance and comfort characteristics will not be inferior to those of its Scandinavian counterparts”

- Have you looked at the practice of building such ferries in Scandinavia?

- Of course, we had analyzed the experience of construction and operation of such ferries and used the solutions tested by our colleagues in the field of streaming and zoning of passenger/traffic flows, boarding/disembarkation, operation in ice conditions. Kaliningrad State Technical University has held model tests with their results used for the ferry optimization. Special attention was paid to transportation of people with limited mobility. That work was performed together with the All-Russia Society of the Disabled. So, the ferry’s performance and comfort characteristics will not be inferior to those of its Scandinavian counterparts.

- You have mentioned scrubbers. How reasonable are they for ships already in operation?

- We have estimated the viability of scrubber installation on a large fishing trawler. It is quite costly, indeed. Besides, Russia needs to develop domestic production of this equipment. Our solution for the trawler is based on the use of Korean equipment. Meanwhile, we suggest that our Russian suppliers take a closer look at this market to break new ground there. We discussed the Russia’s market with our Korean colleagues. The potential of Russian ships modernization through scrubber installation is estimated at 50-100 unit.

- What is the local content foreseen by your design of an icebreaker for Rosmorport?

- We have developed a technical design with a separate section dedicated to import substitution. It reviews suppliers and equipment that can be used for this ship and we also provided Rosmorport with our opinion on that equipment.

According to our analysis, the share of domestic equipment in this project can be up to 70%. However, not all needed equipment is under serial production, some items cannot boast sufficient experience of being used in such ambitious projects. Besides, Rosmorport has established cooperation with some foreign suppliers as the recent two decades have seen mostly foreign equipment in the market. Moreover, the project also provided for using liquefied natural gas as a marine fuel. Albeit available in the market of Russia today, engines for ships of that class should be use-proved equipment rather than prototype models.

- What are your plans in the fishing fleet segment?

- We have developed our own concept design of a crab catching ship and we interact with the fishery industry companies when it comes to designing of refrigerated cargo carriers. No real projects have been launched yet, but we hope to realize this potential together with the fishing companies this year. We do have something to offer.

“We can offer fishing companies a package of solutions on repair and maintenance of ships throughout their entire service lives”

Nevertheless, it should be taken into account that the fishing market has also faced certain challenges caused by the pandemic, China has reduced the volume of fish purchases. It is not an unlimited market, the problem cannot be addressed with the investment quotas alone. It is necessary to focus on modernization and repair as well. The issue of repair will rise in three or four years and it is important for Russian ship repair companies to be capable of offering the required services and quality. From our part, we can offer fishing companies a package of solutions on repair and maintenance of ships throughout their entire service lives.

- Why do our fishing companies like Norwegian ship designs?

- Our Norwegian colleagues have a special approach to designing of fishing ships which is questionable when it comes to compatibility with domestic shipyards and the Russian classification society. Fishing ships are quite sophisticated, therefore vast experience is needed for a correct designing, correct equipment selection and layout. Understanding of fishing specifics is also essential. It is a new segment for us but we will hopefully realize our potential in it.

- Could you, please, tell about designing of self-righting lifeboats.

- There is actually a high need for life-saving equipment which used to be almost totally of foreign origin. Therefore, the Ministry of Industry and Trade commissioned the related works with Central Research Institute KURS acting as the general contractor. We developed all the design documents starting from the basic design and up to detailed design documentation and operational documentation.

There were designed four boats with capacity of 37 and 55 passengers, each of fireproof and conventional design. The boat trials (a total of about various 17 tests) confirmed the design validity with some characteristics such as fire-resistance exceeded the existing standards.

With their self-righting capability the boats will be automatically positioned on an even keel even in case of incorrect launching.

They are virtually first Russian emergency rescue boats although today they are equipped with a foreign engine. We are working towards using the Russian one.

It is actually a unique product with the competence acquired by Russia. Now, it is a matter of launching a serial production following which we can speak about the export potential.

There is an interest to such boats in the market. For instance, boats for 60 passengers are required for the development of the Kamennomysskoye Sea fields.

We continue developing this project and I suppose we will be able to offer boats as good as the foreign ones. Meanwhile I can safely say already that those four boats produced by Kurs are quite competitive.

We also plan an internal research and development of freefall launching boats for tankers and dry cargo carriers of river/sea class, Project RSD-59. The demand for such products in the segment of civil shipbuilding is estimated at 40 units.

- What are the major trends and challenges of ship designing?

- Today, there is a certain gap between a design and construction. Customers need not designs, but end products. Therefore, a designer should offer a project economically viable for at least 10-15 years.

Seaborne transport is developing towards higher automation. On the one hand, that requires higher capital investments but the coming 10-15 years will see savings on operational expenses.

Other developments relate to using alternative fuels that are sound for line shipping. However, there is some uncertainty in this respect when it comes technical fleet since it operates in a variety of conditions, within ports and beyond their limits.

“All our projects have an import substitution section regardless of whether it is paid by a customer”

- What are the ways to raise the local content and import substitution in the segment of ship components?

- All our projects have an import substitution section regardless of whether it is paid by customers so that they could choose equipment of Russian origin or at least have a rough idea of the market offering ship components. We also invite Russian companies to participate in our projects. However, sometimes customers state which equipment is to be used on their ships allowing no appeal. As of today, we have signed contracts with more than 30 Russian companies on promotion of their equipment in our projects and we continue establishing cooperation with other manufacturers in Russia.

One of the key problems of import substitution comes from the attempt of Russian manufacturers supply their products “in pieces” with no one to integrate everything and to bear responsibility for that available so far. We are looking for such a partner and we hope to find it this or next year. An example is USC-Propulsion being established in the related segment and we would like to join hands with them in this respect.

Of course, the suppliers have to offer competitive products, both in terms of quality and price, perhaps with a state support, perhaps with the access to the foreign markets. The global market of ship equipment is highly competitive, of course, so we need to look ahead, to develop new designs properly represented and promoted via international structures. The Ministry of Industry and Trade of the Russian Federation has a national project named “Export” under which the state undertakes certification of the products and their promotion to the export markets. However, almost all niches have already been filled and there is no reason to try exporting outdated technological solutions. Newly offered solutions should be at least as good as the existing ones or it is better to offer breakthrough solutions. Actually, Russia has a lot to be proud of but we are not always able to “pack” our solutions properly and to set adequate prices for them.

For example, I consider it promising for Russian companies to enter export markets of scrubbers, equipment for ballast water management ... Here in Russia we have technologies coming from other industry sectors.

It is also significant to understand that the equipment should be offered at competitive prices and it should be proven in use. It can probably go through a test run on pilot ships or under R&D projects. For example, the above mentioned ferry intended for Kaliningrad can be used for equipment testing.

A separate activity is providing services. Foreign suppliers have always been focused on customers and today this niche can be filled by Russian companies in view of the current sanctions.

- You used to work for the Ministry of Industry and Trade and take part in development of state support measures for the shipbuilding industry. Now, looking from the other side, do you think those measures are sufficient or do they need to be supplemented?

- It is always possible and reasonable to think about supplementary measures. Support measures are not always associated with direct financing. Let’s say, in China, state support is also provided through port charges with a discount given to ships built in the country.

A success in import substitution is not possible all at once, over a year, two or three. It must be a progressive advance, which is the focus of the import substitution programme. In shipbuilding and in other sectors this programme is switching to the point system where it is crucial for manufacturers to adapt and to take an active part in formation of the import substitution policy. With their insight into the process, manufacturers of ship components and equipment will be better navigated in present-day developments and treat the new measures as points of growth rather than as additional red tape.

A concern of marine instrument engineering has been established and I believe that consolidation of the related assets will let join hands in this market. We have quite a lot good technical solutions, rather sophisticated ones.  The only question is their price and competitiveness in the global market. As an example of competitive Russian equipment we are also focused on I would mention a compass of Electropribor. I hope that a civil subdivision will be established within the concern and offer a comprehensive solution on radio navigation.

Anyway, no unified mechanism to support equipment suppliers and to allow for immediate production of equipment with competitive quality, price and service has been developed yet. However, wide use of the existing basic measures and their adjustment to specific products can bring a positive result within the coming years. In this respect, the proposals on additional mechanisms should come from equipment manufacturers. Who else but they are aware of the major problems. Consolidation of those proposals and development of a unified system facilitating the development of production in Russia is among the key tasks of the Ministry of Industry and Trade.

By Vitaly Chernov

news@portnews.ru

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