IAA PortNews’ interview with Aleksandr Solovyov, General Director of Vyborg Shipyard
PAO Vyborg Shipyard (a company of United Shipbuilding Corporation, USC) has launched a patrol icebreaker built under the state defence order. It is the first ship of this kind in the company’s civil portfolio. Aleksandr Solovyov, General Director of Vyborg Shipyard, tells IAA PortNews about its prospects for further projects in the interest of the defence industry.
Will the series of patrol icebreakers of Project 23550 be expanded?
- FSB Border Guard Service earlier made a public announcement of its need for one more serial ship in the North-West Basin. We count on that order and for other orders as well.
The financial result of Vyborg Shipyard has been in the red recently. What year is expected to see the net profit?
- The ship delivery is scheduled for 2024. It will be year of the estimate turning into the fixed price which is to be reflected by financial results. So far, the dynamics of the state defence orders suggests breakeven result of those projects. As of today, the financial results of the shipyard depend primarily on fishing ships being built under ‘keel quotas’ programme. Besides, we count on additional capitalization of shipbuilding companies.
What is the scope of additional capitalization needed by Vyborg Shipyard under the first phase of ‘keel quotas’ programme?
- The deficit is estimated at RUB 7.5 billion. To complete the construction of ships, Vyborg Shipyard needs not only equipment - was purchased prior to introduction of sanctions and restrictions by foreign suppliers - but money as well. If there is money the ships will be completed.
Apart from fishing ships you backlog of orders includes an icebreaker for FSUE Rosmorport. What is the new deadline for its delivery set by the customer?
- The delivery is scheduled for autumn 2028. Obviously, its construction will also require additional financing (contract price was initially set at RUB 10.5 billion — Ed.) currently estimated at RUB 8–10 billion.
You say the delivery is guaranteed with additional financing. What is the forecast for the delivery of trawlers (ordered by FOR Group, Arkhangelsk Trawl Fleet, Nord Piligrim — Ed.)?
- Six trawlers are under construction, two units have been delivered. We expect two more units to be delivered in winter 2022–2023. One of the trawlers leaves for sea trials in October, the other one – in December. The remaining four trawlers will be completed in accordance with actual financing. Initially, their delivery was scheduled for 2024.
Will the shipyard take part in the second phase of the ‘keel quotas’ programme? Ilya Shestakov, head of Rosrybolovstvo expects the first contracts to be signed in 2023 and construction to begin in 2025.
- The shipyard’s production programme is quite tight. As of today, we do not look into participation in the second phase of the programme. The contracts of the second phase will be at least 1.5-2 times higher as compared with those of the first phase. That is comparable to a ship construction cost.
What orders ensure the shipyard loading after 2024?
- On a short-term horizon, Vyborg Shipyard will be the basic facility in terms of the state defence orders.
What advantages does the amendment of the Law on Industrial Policy bring for shipyards (the draft law entitles the Ministry of Industry and Trade to set estimated cost of ship construction - Ed.)?
- We have been waiting for it for many years. In my opinion, it will make the second phase of the investment quotas programme more fair in terms of pricing when it comes to shipyards. A fishing ship design will be assessed before setting a real price. Customers will be able to negotiate contract values with shipyards basing on the cost of similar projects in Turkey and other countries. Thus, the price will be set and confirmed by the state expert approval. Profitability of the fishery business currently makes tens and hundreds pct. Now it will decrease a little but it will be still comparable to profitability shipyards have today — it does not exceed 5%.
Many projects of fishing ships have faced a problem of no domestically-produced engines to replace the foreign ones. Will this problem be resolved at the second phase of investment quotas programme, in your opinion?
- Those are the challenges of the industry today. The only real manufacturer of engines is the Kolomensky Zavod.
When will it be able to supply engines for fishing ships?
- That is the only plant. I think, it isn’t likely to supply anything for the fishing industry before the end of 2020ies.
How do you estimate the prospects of orders for the defence industry?
- I count on orders for up to seven ships to be contracted in the coming year and a half. Besides, the shipyard is building two research vessels for the Russian Academy of Science (RAS) which are to be delivered in the second half of 2020ies, Thus, the shipyard is loaded until at least 2030. Over the recent year, the shipyard’s personnel has increased by almost 500 employees. Now the shipyard numbers 2,800 employees. By the end of 2023, the shipyard is to recruit about 400–500 people.
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