In Depth: What does the future hold?

As 2013 looms, it is time to take a look at what 2012 has brought the maritime and offshore industries. Various trade associations voice their opinions on what has happened and what is to be expected next year.

“Honestly, there is so much uncertainty, turbulence and change in the world that this past year was horrible economically-wise”, states Rob de Wijk, director of The Hague Centre for Strategic Studies and professor of International Relations at Leiden University. His objective view takes us to the darkest places of the past twelve months. De Wijk: “Due to shale gas the United States is becoming more and more independent in the field of energy and China is expected to become the largest economy in the world in the years to come. Europe really needs to step up! We may expect next year to be more or less the same as this year, but we really need work hard or we will be blown away.” Perhaps a warning that no one can sit back and relax, though on a positive note De Wijk states that it is good that the government is starting to take the economic situation seriously. “Too many mistakes have been made, and now we face the consequences. This is definitely not a positive thing, however the government is at least talking about what needs to be done. Time will tell what will happen”, concludes De Wijk.

A new reality

So, how do the maritime and offshore industries feel about the past 52 weeks? The trade associations take their time to answer the questions: how was the past year and which words would you use to describe what has happened? “Let us start off with new reality”, says Farouk Nefzi, director of HISWA Multimedia BV, part of the yachting industry trade association HISWA. “We went through a major high in 2007 and 2008, the sky was the limit. No worries about attracting customers and generally plain sailing. When the crisis struck, it hit all parts of the yachting industry, though possibly the hardest hit was our segment up to 24 metres. This year requires some rethinking, as it has become a buyers market.” Tineke Netelenbos, chairman of the KVNR, the Royal Association of Netherlands Ship Owners also mentions the economic crisis, stating: “Clearly it has been a tough year for all and many ship owners are finding themselves in adverse weather conditions, so to speak. This has to do with the overcapacity on one hand and a decrease in transport on the other hand. This just makes it hard for our ship owners. Sure, we hoped 2012 would bring us a better economy, but unfortunately this has not happened and it looks like 2013 will be much the same.” The crisis did not escape the dredging industry either, Fries Heinis, director of the Dutch Association of Dredging Contractors, states: “Cuts have had to be made and will still need to be made in 2013. We understand this, we just want to make sure that the right decisions are made. Cuts can also be a positive impulse, as long as they are thought through. We are in talks with the government to make sure everything is handled as well as possible.”

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Keep your head above water

Not only the Dutch ship owners and the yachting industry have suffered. The shipbuilding industry also struggled due to the crisis this year. Sjef van Dooremalen, chairman of Holland Shipbuilding Association, characterises 2012 as: “Successful, innovative, but uncertain. The Dutch shipyards as well as the suppliers have been able to turn a difficult year into an almost successful one. They really had to keep their heads above water and many have ventured through well, which is good news. A sufficient amount of orders in the portfolio guarantee the continuity of the industry, for the time being. So, even though there is a worldwide overcapacity and the economy is still, by far, not what it should be, we have succeeded in maintaining strong positions in the niche markets we are active in. Innovation is another key word as the Top Sector policy has been written with the maritime industry as an important sub-sector in the Top Sector Water. As such, we have been able to take key steps and can finally begin to start working on the many challenging projects we envision. But at the same time we live in very uncertain times which for the foreseeable future will stay with us, only changing for the better if and when Europe gets its act together.”

Top Sector Water

As mentioned, the Dutch government appointed the maritime industry as one of the most important for the Netherlands. Heinis comments: “It feels like the Top Sector policy really got kick-started this year. We as an association, as well as the companies we represent, have put a lot of time and effort into this. I believe this is the way forward and it has already reaped its rewards in my opinion, regarding for instance export financing. I know the government is open to supporting and guaranteeing our industry. Of course some projects are still waiting to take shape, but all the right signals are there. The traffic light has just jumped to green, now let’s see where it leads. Human capital has had new life breathed into it, thanks to the Top Sector policy. I think each maritime industry had their own way of tackling the personnel issue, now we approach this collectively. This is a positive additive of the Top Sector Water. There is definitely more cooperation. We are, after all, fishing in the same pond, so why not do it together? We hope this leads to more students choosing to work in the maritime industry.”

More personnel for the maritime industry

Human capital is also a point of interest for the KVNR, as Netelenbos states: “We have seen an increase in the amount of students in the shipping industry. We think this has a lot to do with the campaigns we have started. From primary school, children are introduced to the maritime industry. From the age of 14 and 16 they can sail along with several vessels. Other than that, our industry can guarantee a job or internship when a student finishes school, which is also very good. If you choose this industry, you have chosen well. So perhaps this year can be seen through pessimistic eyes, but there have been successful projects and the outlook for the future is good and that is okay.”

Governmental influence

Getting people interested in the maritime industry is a key point for 2013, keeping them safe is also high on the priory list Netelenbos has. “The Dutch government has not undertaken enough to guarantee Dutch-flagged ships have sufficient methods to safeguard their vessels. According to Dutch law, vessels cannot have private security personnel on board, which means the Dutch must enlist military personnel. This not only means more costs, but makes the Netherlands somewhat unbecoming as flag state. Many other European countries offer the possibility of private security personnel on board. It stands out that the Netherlands is a step behind, which is something I feel we cannot afford”, comments Netelenbos. The government can also assist in helping the industry meet regulations, such as the new NOx emission norm and the ballast water treatment. Cooperation, it seems, is key.

The right sentiment

Cooperating during hard times is the way forward. Many trade associations are feeling the power of joint approach, such as within the Top Sector Water. Heinis: “Innovation is also a word I would use to describe 2012, mainly for the cooperation between the maritime industries and the government. We as a dredging association do not have a business-to-business approach, we are very dependant on the government. Change will not happen overnight and we need to be patient.” Cooperation has not only sprouted between industries and government, but between industries as well. Netelenbos: “It can be as simple as getting people together. Our association is housed at the Willemswerf office in Rotterdam, alongside other Dutch maritime organisations such as the Dutch Shipbuilding Association, the Dutch Maritime Network, the IRO and Holland Marine Equipment. It makes the process of cooperative strategies and interest easier to manage and maintain. The Dutch maritime industry finds itself in a unique position, so it is good we have plenty of time to see each other, interact and decide what to do accordingly. I believe it will be best for the industry as well.” Van Dooremalen feels the same way, stating that the joint approach by cooperation throughout the maritime chain is what makes strategies and innovation stronger.

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What has 2012 brought?

Perhaps it was not the year that all expected, but sometimes difficult years can bring new ideas and stimulate innovation. Nefzi: “I have seen companies within the yachting industry become more aware of what they are doing and how they are selling and perhaps structuring both elements to more process-based awareness, but I also see we are starting to emerge from this deep valley, we can see light at the end of the tunnel. We will not yet be seeing the luxury of 2007 or 2008, but we are going in the right direction. Innovation and durability are key elements that we must use to distinguish ourselves from our competitors overseas. So, the crisis was certainly not wanted, but has caused a positive shift. People have become more flexible and are willing to. When anything was possible, people would act as such. Now people must think carefully about what they are doing. In the end this means you will get more value, economically as well as innovatively, out of your end product. Next to that, the Dutch are very good at cooperating, more so than we see overseas.”

Booming business

Now, here comes an industry that can rejoice: the offshore industry. Sander Vergroesen, managing director at IRO, the Association of Dutch Suppliers in the Oil and Gas Industry, says: “Internationally speaking the Dutch are key players. With our 425 members we have a very diverse group who can assist in all facets of the offshore, renewable and oil and gas industries. From pipe laying to transport, the Netherlands offers the complete package. A lot is necessary to make it possible for the oil and gas operators to explore the oil and gas fields. Furthermore we see that upcoming nations like India, China, but also Mexico, Brazil and Australia need our expertise and equipment to make their planned operations possible. The thing is, these nations need the money they can make with the production of oil and gas for the growth and development of their domestic economies. Our growth has been more than satisfactory. Growth can also be seen in the various products, now more and more we are looking to gas, for example LNG, to become a major future source. This also requires new and clever ways of thinking and winning products.”

Easy? Think again

Thinking that the offshore industry is easy, is deceiving. Vergroesen: “You see, the easy kind of winning of oil and gas cannot really be done any more. We need to delve deeper. Deep is now around 3,000 metres. We are now looking tot travel to 5,000 metres and in the future perhaps 10,000 metres. The deep water reserves in Brazil, Mexico and Australia are real untapped resources and the Dutch are leading in developing the innovations necessary to reach them. All in all, we can look back on a very busy, dynamic and eventful year with more international allure than ever before. Next to that we hope to go to the Arctic some time soon, but this will also require a lot of innovation. Let us not forget the North Sea, where we are also very active as a Dutch industry especially regarding renewable energy. Fossil fuels are of course still leading, but there are more demands for renewable energy and we are currently also working on wind farm parks. This type of energy offshore requires its own innovation and is very different for wind farm parks onshore. The Dutch have a solid reputation abroad and this is very positive.”

The new year

So, now we can start to think of the new year. What will it bring? What can be expected?  Nefzi: “Next year will be relatively similar to this past year. The crisis is still with us, although we should not focus on this. Customers are getting tired of hearing about a bad economy. Let’s use the knowledge over 2012 and make 2013 more successful. Revenue has been made and will hopefully translate into a positive year for the  yachting industry. Yachting is about enjoying the water, experiencing new things and revelling in the freedom sailing can offer. Though much has changed, these goals still apply. The value of the Dutch yachting industry and the export it offers in growing markets is amazing. That is the binding factor for the whole maritime industry, the Dutch excellence. Let us honour this, together.”

Moderately positive

“All the shipyards are working hard to get more orders and this will also count for 2013. Though it seems tough, I rarely hear much negative talk. Of course there are issues, due to competition some companies are under strain to change portfolios and prices, worldwide there is still a large overcapacity putting prices even further under pressure. But there is hope and truthfully the Netherlands has steered clear of major dramas. The niche industries are doing well indeed; dredging, offshore and superyachts are all Dutch industries that maintain their strong positions based on excellent and unique knowledge and supported by a stable government policy. So, you see, it is not all bad news. Next year we will see much of the same and it will take a while to climb out of this economic situation. Luckily we have the Top Sector Water. Did you know, 65% of all our products are sent abroad? This means we have a huge export network. We really must focus on this and therefore the expected upcoming improvements in our export finance an guarantee facilities in order to make our country ‘first in class’ are essential. For such a small country we are doing very well”, states Van Dooremalen on his view of 2013. The dredging industry also voices its outlook.

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Heinis: “Moderately positive.” He feels there is enough work nationally as well as internationally, but there will be less than the industry has become accustomed to. “We should not expect too much of the next year. The Maasvlakte has given us ample job opportunities, but we don’t yet know what next year will bring. The danger lies in the fact that projects are postponed due to costs. It is something we have to be careful with, as some projects might effect our business. Ports need to remain accessible. You cannot postpone every project. It will be interesting to see what next year brings us. You need to invest to get somewhere, we just need to keep that in mind. So, we as dredging industry association are positive, though you need to remain realistic. Let us not mope around!”

WMN -8-16 3Looking forward to 2013

Vergroesen: “We expect to see the same year if not better in 2013. Our competitiveness strives us to be better every day and every year. The offshore industry is based on strategic and well-thought-out plans, so by making the right choices you can reap the reward. It is all about strategic investments. Important is that our industry grows nationally as well as internationally. We want to be there from the start and experience the growth other country has the potential for. We are really looking forward to next year!”

Wherever we may find ourselves next year, to know the Dutch maritime industry stands strong, together, is to know that all challenges will be met and faced. All we can hope is the best for the new year.

Rebecca McFedries

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