A new approach to collaboration

Text Irma Capiten    Photos Jussi Vierimaa

Growth in the marine industry
through a new model of collaboration

Case

Rauma Marine Constructions Oy is a demonstration of the power of local and international will, expertise and collaboration. Continuing the operations of the Rauma shipyard, the company has a new approach to collaboration with a network of its partners.

Case

Rauma Marine Constructions Oy is a demonstration of the power of local and international will, expertise and collaboration. Continuing the operations of the Rauma shipyard, the company has a new approach to collaboration with a network of its partners.

A Friday afternoon in autumn finds a bustle of activity at the 50-hectare shipyard at Rauma’s industrial port where Rauma Marine Constructions Oy’s (RMC) one hundred-plus employees are busy working on an island for Dubai, servicing Arctia Oy’s icebreaker, and building vessels that, for now, cannot be disclosed because of customer agreements.

Today the sun is shining in the clear blue sky, but three years ago a much gloomier climate prevailed. The previous operator at the site, the South Korean-owned STX Finland, announced that it was closing the shipyard. Rauma’s 600-year-long culture of shipbuilding was about to come to an end. The City of Rauma made an initial push to save the shipyard by acquiring the entire shipyard area from STX Finland in March 2014. The idea for the operation came from Rauma residents Aarno Mannonen and Ari Salmi. Mannonen had been managing director of the shipyard for years. Heikki Pöntynen, a third-generation Rauma-based shipbuilder with international maritime management experience, was appointed as CEO of the company. Today the confidence in the future is strong at the same location. The Finnish-owned RMC employs as many as 400 people at times, 50 of them are its own employees.

“Rauma is the world’s best prototype shipyard, and we can build highly specialised vessels here. Delivery reliability and staying on schedule are also among the strengths of the Rauma brand,” Heikki Pöntynen notes.

RMC-Pontynen-UK

“The marine industry should not be viewed as individual players, but as a value chain, an ecosystem that works in harmony. Our goal is to shift from the ‘we and you’ model to doing things together,” emphasises RMC President and CEO Heikki Pöntynen.

The round-table model  

Pöntynen has introduced a new business model to the Rauma shipyard. He has knowingly alienated RMC from the subcontractor chain-type of thinking, which is the sector’s traditional way of operating.

“I don’t even use the word subcontracting; I prefer talking about partners. It’s important to find partners who understand our values and who are committed to the same things we are.”

What this means in practice is that early on in the process, even before the call for bids is put together, Pöntynen invites the project’s different parties to the same ‘round table’.

“For example, the Mols-Linien deal got going when we invited the main partners – the engineering office, the electricity contractor, the cabin supplier, and the engine professionals – to the same room. Contrary to the subcontractor model, the totality of the project and the price were discussed and agreed on together.”

As the project advanced, the different parties met at regular intervals.

“It’s important to get the group to be proactive and to talk together, not just through us. The shipyard has a project centre in which the key people from the different companies work together. In a way, the partners form the shipyard’s own project department.”

Marine industry as a value chain

Pöntynen talks a lot about value chains, which are closely related with the partnership model approach.

“They are the next development step. The value chain in our sector extends from training to the end user, and in the background there are research facilities and applied research. For example, Norway has long traditions with a functioning value chain, where clusters and operators, builders and banks operate in excellent symbiosis. In Finland, operations are still fragmented.”

RMC’s goal is to work in closer collaboration with the different parties. This way, Pöntynen believes, Finland could become number one in the world in the Arctic industry, for example.

“The marine industry should not be viewed as individual players, but as a value chain, an ecosystem that works in harmony. Our goal is to shift from the ‘we and you’ model to doing things together. That, I believe, is our future.”

RMC-UK

Rauma’s shipbuilding heritage goes back hundreds of years. Over the past 70 years, the shipyard has launched 1,500 vessels.

Artificial islands and naval vessels

RMC has signed – and is negotiating – significant contracts, the biggest of which include a letter of intent with the Finnish Defence Forces for four vessels capable of operating in ice conditions, a 158-meter-long passenger-car vessel for the Danish Mols-Linien, and artificial islands for the United Arab Emirates. Behind the big orders is Rauma’s long-standing good reputation as a shipbuilder, a reputation that some 1,500 vessels have carried around the globe over the past 70 years.

One interesting project, a leisure terrace for Dubai, has already been completed.

“Last winter the leisure terrace was transported by sea in seven sections and docked adjacent to the luxury hotel Burj Al Arab. When it left our shipyard, it was -30 °C here and +40 °C at its destination. The 10,000-square-meter floating terrace features a sandy beach that weighs one million kilos and some restaurants,” Pöntynen says.

“We are currently working on artificial islands, and next spring we’ll start building the Mols-Linien ferry.”

Multi-year order backlog

In the shipbuilding sector, contracts result in construction projects that last years and require a lot of financing because of the industry practice whereby the bulk of the payment for the order is paid when the ship is delivered. That is why RMC’s ownership base was expanded late last year, when Taaleri, Finda and Finnish Industry Investment came aboard.

The order backlog now extends to 2018, and realisation of the Finnish Defence Forces’ letter of intent would extend it to 2024. The employment impact of the orders is over one thousand man-years. The shipyard is of major significance to the City of Rauma and to all of Finland.

“Its importance to the national economy can be compared to the paper industry’s, according to a soon to be published study by the Ministry of Economic Affairs and Employment.”

Heikki Pöntynen

Rauma Marine Constructions Oy