UK-based engineering company Rolls-Royce said it would launch a strategic review of available options for its Commercial Maritime division, which are likely to include finding a new owner for the business.
Rolls-Royce is working on the further reshuffling of its business structure and plans to reduce its five operating units to three core businesses based around Civil Aerospace, Defence and Power Systems.
“As part of this exercise, we plan to consolidate our Naval Marine and Nuclear Submarines operations within our existing Defence business, and Civil Nuclear operations within our Power Systems business,” the company said.
The move is being pursued as Rolls-Royce aims to slash costs and simplify its operation, especially taking into account the rough times its marine business had to endure following the downturn in the offshore oil and gas industry.
“This is the right time to be evaluating the strategic options for our Commercial Marine operation. The team there has responded admirably to a significant downturn in the offshore oil and gas market to reduce its cost base. At the same time, we have carved out an industry-leading position in ship intelligence and autonomous shipping and it is only right that we consider whether its future may be better served under new ownership,” Chief Executive Warren East said.
Since 2015 the company’s marine business divested non-core businesses and reduced the number of sites from 27 to 15 – an overall reduction in footprint of 40 percent. It reduced its workforce by 30 pct to 4,200, with the majority now based in the Nordic region.
At the same time, the business has been investing in new facilities and new technologies, especially in the fields of ship intelligence and autonomous vessels, culminating in June 2017 with the successful demonstration, in Copenhagen harbour, of the world’s first remotely operated commercial vessel.
Regardless of the outcome of this strategic review, Rolls-Royce will retain the marine operations which supply complex power and propulsion systems to naval customers, including the Royal Navy and US Navy.
During the first quarter of 2018, the naval operations will become part of an enlarged defence business named Rolls-Royce Defence, comprising the current Defence Aerospace business and its nuclear submarines operation. The company added it would retain engine business serving marine customers within Power Systems.