Aker Yards builds the biggest cruise ships in the world; the most valuable commercial ships ever constructed. They are world leading in ferries, with ice-technology that few (if any) can match. “We have secured know-how and technology to stay in the Formula 1 of shipbuilding for decades,” says Yrjö Julin, president of Aker Yards Yards business area Cruise & Ferries, and responsible for the operations in Finland.
In Finland, the ship yard industry has a long history, stretching back hundreds of years. The last few decades have seen the once booming industry falter and slowly build itself up again. Amidst mergers and restructuring, Aker Yards has emerged as a leader.
“It has been a tough period, but it has been absolutely necessary. Without it, there would be no growth or the developments and increased productivity that we see today,” says Yrjö Julin.
Before the mergers the number of workers employed in Finnish shipyards was many times higher, he explains, but new production methods have changed the industry completely. “We have seen
a trend of non-core activities being outsourced, so that today we talk about an assembly yard philosophy. We manage the projects, and the conceptual and basic design of the ships, but otherwise we use more than 600 companies, both from the Finnish maritime cluster and outside. In this way Aker Yards in Finland can build some of the most complex ships in the world with an in-house staff of less than 4,000 people,” says Yrjö Julin.
Aker Yards is however trying to reduce the number of companies in their supply chain.
“We are giving bigger and bigger volumes to turn-key companies and sub-contractors. Instead of trying to do everything ourselves, we are trying to share out larger and therefore more attractive volumes to our co-players,” explain Yrjö Julin.
Staying in the race
At present, the Finnish maritime cluster, which is mainly industrial and manufacturing, including harbours and shipping companies – total some 50,000 workers with a turn-over of 11 billion euro of annual sales.
“40 years ago, Sweden was the second biggest ship builder in the world. Their strategy was to build tankers and container ships using a high level of automation. Today the Swedish shipbuilding industry doesn’t exist. In Finland we chose another strategy; to go for the most difficult and demanding ships to build – cruise and passenger ships,” says Yrjö Julin.
That strategy has paid off. Since June 2004 the Aker Yard stock has increased almost four times over. Aker Yards’ fundamental competitive advantage has been and is this focus on sophisticated ships with high technology content.
“There are probably around 1,200 ship yards in the world, but only four companies are able to build the big cruise ships of today: Fincantieri, Meyer Werft, Mitsubishi Heavy Industries and Aker Yards.
And we have secured know-how and technology to stay in what we call the Formula 1 race of shipbuilding for decades,” says Yrjö Julin.
The French connection
In June, the Chantiers de l’Atlantique yard in France became part of the Aker Yards group. Yrjö Julin has been tasked with leading the integration process of the yard into the group’s family of 17 yards.
“The French yard will be an integrated part of the Aker Yards Cruise & Ferries business area, which I lead, and I’m looking forward to benchmarking between Aker Yards, Finland and the coming Aker Yards, France. Not just on prices, but also on how we are working,” he explains, and underlines the importance of drawing benefits of this large-scale organisation.
“We have spent the last years merging and trying to get synergies out of this Finnish system. We have also been able to benefit from the other Aker yards units, and have utilised the capacity across borders. For example, sections of floating hulls come to Finland from Aker Yards, Germany. And the next challenge is to do the same by combining the cruise and ferry know-how between the Finnish and the French yards.”
The goal is to lift the level of competitiveness of the whole company, and not merely copy what the others are doing.
A third level, he calls it, and with rapid developments in the cruise industry, sharpening the competitive edge is crucial.
Floating cities
Aker Yards has built icons such as SS France, Queen Mary 2, and RCCL’s Voyager class. Last, but certainly not least, Aker Yards did recently deliver the world’s largest cruise-ship to date, RCCL’s Freedom of the Seas.
“If you think about it a cruise ship is like a floating city. They have, cinemas, hospitals, hairdressers, skating rinks, shops and more. Then on top of that, you have water purification, propulsion, navigation and all the technology to keep it moving around the world. It’s an immensely complicated system, and every time we build a new class of cruise ship – it’s a prototype. After just a few sea trails, off you go to take on and entertain several thousand people onboard. It’s a miracle really, but we make it work,” says Yrjö Julin.
The development of the cruise market is a continuing success story and the ships get bigger and bigger. The Song of Norway, the first purpose built cruise ship, was 18,000 gross tonnes. The new Genesis class, under construction for RCCL is 220,000 gross tonnes, even larger than the existing Freedom class.
“We need to have an almost exponential capability to keep up with the developments. Building the hull is nothing for us, but creating the rest of the ship is where it gets difficult and that’s where the money is. We don’t have ready-made models, as everything is custom made. Even every piece of furniture is created for the ship. There is no way a ship yard can do this alone,” says Yrjö Julin.
With 17 yards in the Aker Yards group, there should be plenty of helping hands.