Ronny Orvik, Ulstein Group
Release Date: 0000-00-00
You undertook the direction of the regional operations in August 2009. What have been the main changes in the company since you started and what do you see as the main achievements over the course of the year?Before I started in these offices in Rio de Janeiro, I was working for Ulstein in Norway and focusing on the market in Brazil. The Brazilian market was therefore not new to me, and I was working on the same projects from Norway as we secured a few month after our expansion in Brazil. That said, what surprised me a little was the scope and dynamism of the market, as well as the scale of the opportunities available to us. I knew that there were a lot of opportunities in Brazil for Ulstein, but it was only when I moved here, that I realized the wide array of projects available. Through hard work and a strong focus on Brazil, we succeeded in securing our biggest contracts ever in Brazil in December last year. We got contracts for six vessels which will be built at local yards – two ULSTEIN PX106 and two ULSTEIN PX105 – for Companhia Brasileira de Offshore (CBO) and to be built at Alianca Shipyard and two ULSTEIN P801 OSRV vessels to DSND Consub (Siem Consub) and to be built at ETP Yard. Previously we have also sold two ULSTEIN P106 to CBO that was built at Alianca and that today are sailing on long term contracts for Petrobras.
Do you believe that Ulstein would have been able to secure these contracts from Norway without having established itself in Brazil?
Of course it would have been possible, but it would have made things more difficult. It is difficult to sit in Norway and fully understand the market down here. One of the advantages of having offices in Rio de Janeiro is to be closer to our customers and thereby improving communication and response time. We need of course to cooperate closely with our offices in Norway as they fully support us, but we also need to be present in the markets where our customers are. Before opening our local offices, Ulstein had an agent in Brazil, who now is a part of our local marketing and sales team.
You are the Regional Director for the Americas. What do the “Americas” include for Ulstein, and why are your activities headed from Brazil?
For us, the “Americas” in terms of sales, represents the entire continent, including North, Central and South America, but most of our activities are in Brazil due to this being the biggest market for us. However, the office in Rio de Janeiro covers the entire Americas market for sales of design and equipment packages, but marine service is, at least for now, limited to Brazil.
What are your plans in terms of investments over the coming years, and how will you put in practice your CEO’s ambition to “strengthen Ulstein’s position in Brazil”?
Our CEO has been clear in saying that one of our main focuses is to strengthen our position in Brazil, also in terms of service and spare parts sales. We are doing this by expanding the position that Ulstein Belga Marine has today, which was acquired by Ulstein in 2005 and which today offer service and sales within communication and electronics. We want to grow bigger and be able to provide a more varied service to ship-owners in Brazil and we are also in the process of acquiring larger premises. These premises will be suited for our planned expansion within marine services and local content support and we plan to move in early 2011. This represents a big investment for Ulstein, but we believe in Brazil and fully trust that it will have a great return in the long run.
When we met with Norskan and Lauritzen Offshore Services, they were talking about the local content laws in Brazil, and highlighting that they were basically Brazilian companies with foreign capital, and that is was the most efficient way to do business in Brazil. Which steps have you taken to become a Brazilian company and how long will it take to see Norway as merely “the historical roots” of Ulstein Brasil?
Today we have two companies in Brazil: Ulstein Belga Marine and Ulstein South America. Both fully Brazilian, but where the ownership happens to be Norwegian. We consider ourselves 100% Brazilian, but with our marine roots from Norway. It is very important to have the freedom to adjust to the local market demands through local companies, but it is also an advantage to have the financial backing and access to a pool of key competence from our Norwegian companies. We find that combination to be a very good solution for us since we then are able to utilize our strengths in Norway to help us grow in Brazil.
We also talked with them about the lack of qualified human resources and the need to lobby for more training in the industry. What are you doing in order to answer this challenge?
Yes, this can be a problem, but this may be a more pressing issue for the ship-owners with the need to find crew for their ships than for us. However, what we can do to help and make it easier to attract staff is to help increase standards of living on the ships through more comfortable accommodation and reliability of operations. We can use the ULSTEIN X-BOW® hull shape as an example for this: The hull shape eliminates bow impact, thereby reducing noise and vibration which increase crew comfort. Another advantage is the increased living area due to the larger volume displacement in the foreship. This increased space gives the ship owner the possibility to improve the onboard living standards which may enable ship owners to attract the best crew. Further, the ULSTEIN X-BOW® is also an environmentally friendly ship design with qualities like higher transit speed and less loss of speed in waves, resulting in reduced power consumption and consequently improving fuel consumption. This together with Ulstein’s staple for reliability and quality can help in attracting good crew for the vessels. The situation in Brazil regarding crewing is a little similar to Norway where many ship-owners are focused on having high quality and standards on their vessels in order to attract the best possible crew and to be able to offer reliable service to their clients.
How you have adapted the group’s mission to “turn vision into reality” in Brazil?
We usually turn visions into reality together with ship owners as part of a team effort and a good example of this is the first ULSTEIN X-BOW® vessel now under construction in Brazil. Together with the ship owner, CBO, we were able to offer Petrobras a design that met all their requirements in a modern and innovative ship that also is environmental friendly due to lower fuel consumption and the use of the latest technology. The ship, which is of the ULSTEIN PX106 design, is a very modern ship design and the main factor for achieving such innovation in this project was teamwork together with our customer, CBO. We have experienced that if we understand our customer’s needs and ambitions, we can better help turn their vision into reality and at competitive prices. And in order to understand our customer’s needs, we need to be present in the local market.
Another example is our OSRV vessel, the ULSTEIN P801 which Siem Consub is currently building two of in Brazil. This vessel is the first of its kind for Ulstein and a result of close cooperation with the ship owner that had clear visions of what they wanted to achieve. Together we turned their vision into reality and when completed, the two vessels will be chartered to Petrobras on long term contracts.
In 2008 President Lula launched PROMEF to modernize the country’s fleet, clearly stating that while foreign yards were encouraged to bid, domestic yards are preferred builders. In such a context, how do you manage to establish strong relationships with local ship builders, owners and shipyards to nurture demand?
Until today we have been mostly offering yard support service, which means that when we sell our packages for new building projects, we also offer additional support which is based on our own experience. This experience is gained from over 90 years of being involved in ship building and we also have our own shipyard in Norway that can help in all relevant disciplines and support shipyards on their way to become fully independent to build our designs.
Petrobras will invest $224bn over the coming 4 years, 53% of which will be in E&P, which has created a rush for investment in terms of services (Seismic, Support vessels, FPSOs etc). Where do you see most of your demand coming from, and what have you identified as the niches with most potential for Ulstein Brazil?
Many of our segments will have good chances to grow in Brazil as a result of these investments, i.e. offshore vessels including PSV, AHTS and seismic, heavy offshore vessels such as pipe pay, heavy lift and and drillships, short sea shipping vessels, power and communication equipment and aftermarket service. All of these segments are relevant, but only time will tell which segment is to be the strongest for us.
Ulstein has developed environmental friendly solutions and has eco-friendly operations. To what extent would you say that this plays a role when tendering in Brazil, and how important do you see “green developments” become in ship design industry in Brazil?
We believe that the future is green and has also developed a method for analyzing the environmental footprint of different vessel configurations. Further and in our experience, Brazil does not only think or talk about the environment, but actively influence the future path of the industry with the protection of the environment in mind. An example of this is our contracts with Siem Consub which are oil spill and rescue vessels which Petrobras will charter and actively use to minimize the impact on the environment should an oil spill occur. Petrobras is in our opinion very forward thinking and innovative when specifying the type of vessels they need and not at all afraid of using new technology to reduce the negative impact on the environment. In fact, Brazil has proven to be extremely open to environmentally friendly solutions, and
Ulstein is delighted to see this trend reinforced in the local market since this is fully in line with the visions of our company: to develop innovative solution to support our clients without harming the environment. The ULSTEIN X-BOW Ship design is an example of that mind set.
Ulstein’s X-BOW is going one step ahead by enhancing fuel efficiency, reducing speed loss and enhancing safety. What are the prospects for this technology in Brazil?
Our first ULSTEIN X-BOW® vessel in Brazil has an estimated delivery date of early 2011, but the most challenging X-BOW® vessel to sell was probably the first one. However, after Bourbon Offshore took delivery of the first ULSTEIN X-BOW®, which was built at our yard in Norway in 2006, the anchor handler Bourbon Orca of ULSTEIN AX104 design, the market saw that our X-BOW® design technology was working and this made things easier for the X-BOW® concept. The vessel was also awarded Ship of the year that year and since then many X-BOW® ships have been sold and built globally and now including Brazil. As a company, we have learned that using innovation and thinking green makes sense and we therefore hope to see many more ULSTEIN X-BOW® vessels sailing in Brazilian waters in the future since this is a market where many ship owners and operators share that view.
The X-BOW® was initially developed for offshore support vessels, but new markets are now being explored and we see that the X-BOW® can add significant value also on other type of ships such as drill ships, FPSO’s and tankers. Successful model testing for tankers and our deepwater drill ship design, the ULSTEIN XDS 3600, have also been completed showing us that the X-BOW® is versatile and very beneficial to vessels during transit, but also on vessels mainly operating in stationary conditions. This convinced us that the X-BOW® also will be beneficial to FPSO’s where slamming and poor motion behavior can be a challenge, in particular on older designs with the accommodation at the aft.
Do you believe that Brazil is receptive to innovative solutions, or is it hard for them to accept new technology?
Our perception is that this country loves new technology and innovation, at least when it comes to the offshore sector. Looking at Petrobras alone, they are very interested in new technology and seem to always be looking at how it can fit into their strategy. It is a very good country for innovation, which perfectly matches Ulstein’s philosophy since innovation is part of who we are and what we come from. Further, the use of innovation helps develop the sector towards a greener future.
Do you believe that it has to do with the young nature of the industry here, and the fact that they have to move very fast to catch up with the rest of the world anyway?
Maybe it does; maybe it is also linked to Brazils wish to preserve the environment. Brazil is a big country with a strong environmental focus and they want to take care of it and as a company, it is nice for us to be able to contribute to that vision.
Besides the environment, Brazil looks at social responsibility. When we spoke with Nelson Ney of Baker Hughes he noted that training locally is part of the social responsibility of any company operating here. In what ways do you feel Ulstein gives back – talking for example of your initiative with SOS Children Villages?
SOS Children Villages is one of the initiatives that we have undertaken in order to give back as much as we can and to thank Brazil for welcoming us into this market. Another thing that we have done is to build up our local companies using as much local employees and competence as possible. Further, we are also looking at ways to increase local content in our equipment packages that we deliver to Brazil which again will help in building up competence locally. We have a long term vision and strategy for Brazil where our philosophy is to create a Brazilian business, working for the Brazilian market, comprised of Brazilians.
As a Norwegian, what is it like to manage a “truly Brazilian” business?
I think it is important to remember that you manage people and in my opinion it does not matter if they are Norwegian, Brazilian, American or French. I have worked in many countries, and have understood that as long as you remember that you are managing people, you will be OK since there are little differences between them. You will always find cultural differences in how people like to do business, but in order to succeed in building a successful business, it is important to take the best from each culture and build on that rather than focusing on what is different and creating problems. Norway and Brazil is very different culturally, but this is not stopping us from finding good solutions. In fact, in many cases it is an advantage since we approach things from different angles which often lead to better solutions in the end.
If we look at the future, what kind of project would you want to secure in Brazil and where do you want the company to be in five years time?
A dream project would be very good for both Ulstein and the ship owner and it would be sustainable with no negative impact on the environment.
Within five years I would be extremely happy if Brazil was Ulstein’s biggest market. I know we have only sold eight vessels here so far, but we are aiming for a lot more by closely cooperating with Brazilian and international ship-owners that want to do business in Brazil.
| Company: | Ulstein Group |
| Position: | Regional Director Americas |
| Country: | Brazil |