By Mark Cardwell
Q. What repair or construction work is currently being done at the Levis shipyard?
A. On the construction side, we are working on the second of the offshore construction vessels (Cecon Excellence), as well as the two LNG ferries for the Quebec ferry operator, STQ.
In terms of repair and upgrade work, currently we have the Canadian Coast Guard icebreaker Des Groseilliers in for the first part of her mid-life extension. This is the second icebreaker refit project we are performing at Davie this year. Earlier this year we upgraded the CCGS Louis St-Laurent, Canada’s polar icebreaker. That was an exciting project which included the installation of some very advanced equipment onboard.
Next to come in will be CSL Group’s M/V Baie St-Paul early in the new year. Also a very exciting project with a great customer.
Q. Is the second Cecon ship nearing completion, and if so when do you expect to launch and deliver the vessel?
A. The Cecon Excellence will likely be floated up this month (December). It is ready to go now but it is blocked in the drydock behind the Des Groseilliers. Final delivery will be sometime towards the end of next year, depending on how the final specification is from the client. As we saw with the Cecon Pride which we delivered this year, these are multipurpose vessels which can perform a number of roles but that also means changes to different parts of the ship. For example on the Cecon Pride that meant the installation of a saturation diving system. If you follow the oil & gas industry, you will likely have seen that Cecon, our client, was lowest compliant bidder on a recent tender with Petrobras for a major pipelaying contract in Brazil. The intention is to use the Cecon Excellence so that could mean the installation of a Vertical Lay System (VLS) for the installation of flexible pipe. That will be a major piece of work but as a group we did a similar, but larger pipelay conversion project in 2011.
Q. Has financing been found for the third ship and, if so, do you have any timetable for construction and delivery dates for her?
A. Financing has been in place for the third ship since last year. The question has been about when we start and the answer to that is this month. There are two main reasons for that. Firstly, we have been cautious not to expand too quickly and recruit too many people and have so many projects going on at one time that it becomes difficult to handle. Despite having the physical capacity to handle much more, it’s always better to have fewer projects, really focus on them and provide a top quality product or service. The second, and more important reason for delaying the third ship is that we have been installing an entirely new integrated ship construction and Enterprise Resource Management (ERM) system. This has meant replacing six older software systems which handle everything from ship design to procurement to logistics to time-keeping and project management etc. into one system. The third ship is more like a newbuilding project, where we will be pre-outfitting the ship to very high levels so use of the new ERM system will bring major operational efficiencies, as we have seen on the ferry projects.
Q. Where is work at on the two provincial ferries? Again, are delivery dates set?
A. Work is ongoing with the ferries and the majority of the ship sections have now been completed. Davie will be using a new air bag launch system to launch the ferries next year. Delivery will take place at the end of next summer.
Q. Can you please give me an update on the size of the workforce at the Levis yard? (I read recently that there have been about 100 layoffs.)
A. At the moment we have around 1,200 people at the yard. This number changes depending on the stage of the programs underway. Sometimes we will have to lay off some trades while recruiting other trades. For example, as you come to the end of steel production on a project you may have to lay off welders but at the same time recruit other trades such as electricians or carpenters. We are trying to mitigate the fluctuation and ensure that we retain as many people as is economically possible; thereby retaining and developing skills.
Q. How are negotiations going with the Quebec government in regards to income tax credits and other potential provincial shipbuilding projects?
A. The new Quebec government has been a breath of fresh air for the Quebec shipbuilding and maritime industry. There is a significant focus on ensuring that we use our seaways as much as possible for economical and environmental gain. The Quebec Maritime Strategy is in its infancy but in essence there is a concerted effort to ensure the sustainability of the shipbuilding and ship repair industry. There are many incentives for shipowners to build and repair their ships in Quebec shipyards. There are added benefits for Quebec-based shipowners.
Q. Have you had any news from the federal government or from any of your commercial partners about the possibility of landing federal shipbuilding projects, whether new ones or transferred work from the two winners of the first round of NSPS contracts?
A. We are working closely with the federal government, which we have done since Davie was acquired in November 2012. The federal government have shown major support for Davie over the past few years. This has been both in terms of supporting Davie as it exports vessels for the commercial market, as well as two new contracts for repair and upgrade of Canada’s medium and heavy icebreakers (CCGS Louis St-Laurent and CCGS Des Groseilliers).
Q. What’s your take about the shipbuilding industry in general, and about the prospects for shipbuilding work in both Canada and abroad in 2015 and beyond?
A. The shipping markets are still going through a very bad time – that applies to the bulk, tanker and containership markets. Canadian shipyards don’t build for these markets, only repair, so the impact of the shipping markets doesn’t have too much bearing on these. The offshore oil & gas markets are still buoyant despite the fall in oil prices. This is one of our target markets as the majority of our work is in this sector. The very interesting market for us is the ferry market, as it is clear that a lot of Canada’s ferry fleet requires replacing or upgrading. In terms of the shipbuilding industry in general, there is a major drive to expand capacity and capability in Canada but Davie remains as the clear market leader. Its easy to build a shipyard but building a ship takes many many years of practice. Davie is still the only shipyard in Canada which has delivered large, modern vessels.