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2016 February 1

Dmitry Khritin: “Construction of vessels is in full swing”

Dmitry Khritin, Director General of MNP Group (Marine Oil & Gas Projects), tells IAA PortNews about the Group’s activities during the past year and the plans for the nearest future. 

- Mr. Khritin, how good was the past year for MNP Group? What re the economic results?

- The past year was a hard work period. We focused maximum of our efforts on securing the orders for Krasnoye Sormovo  shipyard (Nizhny Novgorod). Key achievements of 2015: on-time implementation of our contracts, further construction of RST27 tankers and new level of competence with construction of improved chemical carriers.

In particular, we built and delivered to ISR Trans the first chemical tanker of improved Project RST27, the  Victoria. It is the seventeenth tanker in the series built by Krasnoye Sormovo. The new chemical carrier is a ship upgraded for transportation of a wider range of products and chemical cargoes including additional line of methanol products. Appearance of the new sea-and-river going vessel of Krasnoye Sormovo brand could not but excited the interest of other ship owners. With this, in 2015 we signed new contracts for building more tankers and chemical carriers of Project RTS27. Thus, we have secured considerable loading of the shipyard’s production facilities for 2016 and partially for 2017.

I would emphasize that new contracts not only bring the financial profit for the Group’s shipyards but also mean implementation of social obligations, guarantee the jobs and salaries for thousands of Sormovo employees and design bureau personnel.

We will start this year with the launching of the lead dredging vessel of Project TSHD1000. The other two ships of the series are also to be delivered this year. Besides, the construction of two tankers for BF-Tanker has commenced.

Our order backlog is a guarantee of shipyard’s stable operation, its financial stability. In 2015, net profit of the shipyard increased which had a positive effect on the entire Group. We hope to keep this trend.  

What is the Group’s strategy in its activities with the customers? Why do the customers usually come to Krasnoye Sormovo? 

- Over the 10-year period of its operation in the market of civil shipbuilding MNP Group has obtained regular clients, have established relationship with many shipping companies and leading design bureaus in Russia and in foreign countries. During this period our customers took the delivery of over 70 civil ships: dry cargo carriers and tankers, barges and engineering ships, etc. All the contracts were implemented on time or often before the contracted time of delivery. It contributes to our reputation today. The more so as our shipyard is among Russia’s leading shipbuilding plants with more than a hundred year history and dynasties of shipbuilders with whom we are brave enough to embark on any project. Apart from the previous years’ experience, our advantage is also in the ability to react promptly to changing requirements of the client, update the project here and now without going beyond the schedule. Our partners are well aware of our capabilities. 

- How did the sanctions affect the projects implementation (supplies of components and equipment)? 

- The impact on civil shipbuilding is minor. Many years of relations with our suppliers ensure stable operation. At the same time we gradually decrease the share of imported equipment through introduction of domestic counterparts that have gained good reputation and satisfy the clients. Many of Krasnoye Sormovo ships have that equipment manufactured by Valcom and Transas as well as components of Krasnoye Sormovo in-house production. I can’t remember any failures of domestic equipment most of which is as good as the foreign one, so we continue our cooperation in other projects. 

- Which foreign companies are among the partners of MNP Group and Krasnoye Sormovo? 

- Everything depends on the field of cooperation. As for the supply of equipment for construction of vessels, it depends on specifications of vessels and the projects. For instance, Damen supplies dredging equipment for Project TSHD1000. It is actually the only foreign designer we cooperate with today. Equipment is generally supplied by Russian and foreign companies, mostly European ones. As for cooperation with shipping companies, our vessels sail all over the world so MNP is engaged in active cooperation with the company from Azerbaijan, Norway, Kazakhstan, Italy, Turkmenistan, Turkey, Iran etc. Today we focus on the domestic market where ship owners are eager to extend their fleets with new vessels.   

The Government has been for several years taking measures to support shipbuilding companies. How did they influence the activities of MNP companies? What other measures are required in your opinion? 

- First of all I would mention the Federal Targeted Programme No 1 aimed at providing state support for construction, modernization and reconstruction of shipbuilding facilities. Krasnoye Sormovo  has seen several modernization activities as well as introduction and mastering of new technologies under this programme. Support measures also include subsidizing of domestic transport companies and through partial reimbursement of the interest on loans and lease agreements, as well as establishment of Special economic zones with advantageous tax and customs regimes. The mechanism of those subsidies proved to be quite efficient: shipping companies used to apply it which resulted in the increase of shipbuilding orders, also at Krasnoye Sormovo in 2011-2012. This mechanism is needed today. Together with the restrictions on the use the obsolete fleet and the utilization grant, those mechanisms will have a positive impact on the industry, we believe.

In 2015, your clients took the delivery of an improved chemical carrier of Project RST27. What are the specific features and the challenges of this project? 

- It is a complicated and a challenging project. We used to introduce alterations in it before. First chemical carriers in the series of RST27 were converted for transportation of vegetable oils apart from oil products in 2012-2013. Last year, under the customer’s request, the project was considerably changed by Marine Engineering Bureau with the assistance of Krylov State Research Center and Russian Maritime Register of Shipping. Volgo-Caspian Bureau and Engineering Center of Krasnoye Sormovo developed the detailed design. The changes were introduced into the system of cargo handling, firefighting and ballast systems, cargo heating system, outfitting and coating of tanks. Proper equipment and materials was found quite quickly. In the result, we launched a new chemical carrier with a deadweight of almost 7,000 t. The vessel’s class was improved to КМ (*) Ice1 R2 AUT1-ICS OMBO VCS ECO-S Oil tanker / Chemical tanker type 2 (vegetable oil) (ESP) of the Russian Maritime Register of Shipping.

- Could you, please tell more about the construction of vessels scheduled for delivery in 2016. What are the customers?   

- Three dredging vessels of Project TSHD1000 will be built over the year for and delivered to Rosmorport FSUE during the navigation period of 2016, before the contracted time of delivery. The first (lead) ship of Project TSHD1000, Sommers, is to be launched in late January. We are now getting ready for the launch. The customer will get the ship in June. All the three dredgers will be deployed for operation in the water areas and at the approaches to the ports of Ust-Luga, Big Port St. Petersburg and Tuapse. In October 2014, Rosmorport authorities examined the construction process and found it to be satisfactory.

Two more tankers of Project RST27 will be delivered to BF Tanker LLC in 2016 and two chemical carriers – to Volgotrans LLC in 2017. The construction of vessels is in full swing now.

What new solutions have been proposed by the designers of Project TSHD1000? What Russian equipment is used? 

- The ships equipped by Damen provide state-of-the-art dredging solutions. Vessels of Project TSHD 1000 with this configuration (trailing suction hopper dredgers with bottom doors, with a pumping function and with a grab equipment) are unique. Working design documentation under the project was developed by Volgo-Caspian Design Bureau. Russian equipment, like automation, monitor and control systems and e-navigation systems are supplied by the companies I have mentioned – Valcom and Transas. Some components of the general equipment were produced by Krasnoye Sormovo. As the project implementation is going on we will build up our competence in construction of dredging equipment, both in designing and in application of up-to-date technologies and equipment. This will provide us with competitive advantages and, consequently with new orders. 

Which projects of those implemented by MNP over the last 5 years are still in demand and which are just a history? Are there principally new projects ready for implementation in the nearest years?

- Shipbuilding projects deal with long-term investments. Vessels are normally operated for 25-30 and in reality can be operated even longer. Therefore, projects do not get out-of-dated too quickly if it does not contradict international requirements and conventions.  To a great extent it depends on the market situation. That is why we still continue building ships of Project RST27. 

Essentially, all our projects of the past 10 years are new ones. The key projects are the following: 19614, 19619, RST22, RST27, 19900. I would emphasize that the capacity of Krasnoye Sormovo is much higher: it can build up to 10 vessels of medium deadweight per year. I mean not only tankers and dredgers, but also LNG carriers, bunkering ships of new generation, research vessels. We have enough facilities and high class experts for this purpose.

Interviewed  by Nadezhda Malysheva and Margarita Babkova.