Davie Shipyard relaunched | PLANT
New ownership resuscitates storied, but once-troubled shipyard with high-end vessels.
oil and gas exploration
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The Lévis, Que. shipbuilder has diversified with the Cecon Pride, a super high-tech subsea construction vessel that will be used for offshore oil and gas exploration in Europe’s North Sea.
At the Davie shipyard, there is no sweeter sound than the crashing of a champagne bottle into the bow to inaugurate the launch of a new ship. But it has been a while since the storied Lévis, Que.-based shipbuilder has had any reason to break out the bubbly – years in fact.
On Oct. 19 the company had every reason to celebrate after years of struggles caused by ownership changes and massive layoffs, and eventual closure, which was a major blow to the small Quebec town where it’s based. Davie launched its 717th vessel on that overcast fall Saturday, the massive 130-metre long Cecon Pride.
The subsea multi-purpose construction ship, built for Norweigan offshore installation contractor Cecon ASA, is the first in a series of three ships Davie will construct to fulfil a contract that’s valued at $245 million.
Davie says the Cecon Pride is the largest ship build in Canada in more than 20 years and will be sailed in Europe’s often treacherous North Sea where it will be used for pipelaying, diving, well intervention and ROV support for the offshore oil and gas industry.
The ship is about 90% complete and will be delivered by February 2014 once sea trials are complete.
“It’s is the most complex ship ever built in Canada,” says Alex Vicefield, Davie’s new chairman and CEO of The Inocea Group (previously Zafiro Marine), a British firm that manages and operates a fleet of specialized offshore vessels in topside and subsea construction.
It’s also super high-tech – a good showing for the company’s first ship build since 1997 – and provides Davie with an example of the direction it wants to go as its new owners diversify the customer base.
“We want to be in oil and gas, exploration, defence and also the maintenance and repair side,” says Vicefield. “We’ve got the technology and ability to do that and the Cecon Pride is a very good example of the level of technology we’re able to produce – this company hasn’t just built ships in its lifetime, it has built dams and even nuclear power plants components.”
The ship, which will accommodate up to 100 crew members, uses diesel-electric power generation to feed six electric thrusters, while a special computer-controlled technology called dynamic positioning automatically maintains the vessel’s position using its propellers and thrusters, but without the use of anchors.
“It’s basically equipped with a 19 megawatt power plant. Power goes to six thrusters, similar to those of a jet engine, to keep it in place,” says Vicefield. “Its position is then linked to a series of reference systems such as GPS and sonar, which help the ship to accommodate a number of purposes on the oil and gas side for pipelaying, diving and mini submarine use.”
The ship’s dynamic positioning function also has three levels of redundancy, referred to as DP3, which Vicefield says is a critical onboard safety component. If an engine or two lose power, the others provide enough power to keep it in place. The technology is increasingly common onboard mobile offshore drilling units. And three cranes handle loads between 250 and 400 tonnes that are capable of intervention tasks in depths up to 3,000 metres.
A heli-deck mounted on the ship’s bow has a diameter of 22 square-metres and accommodates helicopters weighing up to 15 tonnes.
The shipyard, which is now operating under the title of Chantier Davie Canada Inc., is humming these days. It has recalled 750 workers since being acquired by Inocea and the potential of building vessels for the budding offshore oil and gas industry presents a significant opportunity for the once mothballed facility.
The yard is also building two car ferries for Sociéte des Traversiers du Quebec, a contract worth $120 million.
Trouble at Davie started all the way back in 1976 when it was sold by Canada Steamship Lines. Since then, it has been in and out of bankruptcy. By 2010, it was under creditor protection and ended operations, putting 1,600 people out of work.
In 2011, there was hope that a consortium involving SNC-Lavalin, Upper Lakes Group Inc. and South Korea’s Deawoo Shipbuilding & Marine Engineering would structure a bid to redevelop the yard to secure work constructing vessels for the Canadian Coast Guard and Canadian Forces. That work went to Halifax’s Irving Shipyards and Seaspan in Vancouver. The joint venture fell apart, leaving Upper Lakes to clean up the mess as sole owner. Inocea’s acquisition was approved by the Quebec government in November 2011.
Under the new ownership led by Vicefield, Davie has redirected its focus to complex projects, particularly in the oil and gas market. It’s also vying for a piece (if not all) of the federal government’s $2 billion shipbuilding program after missing out on the first round of contracts worth $33 billion.
“Davie has had its ups and downs, but it never failed on a project. It failed because it ran out of work,” says Vicefield, who says the company has been reorganized to ensure work is continuous across every sector the company covers. “We’ve addressed that issue by breaking the company up into divisions so we’re paying attention to different markets at all times.”
He’s also very aware of the importance and the history Davie brings to the community of Lévis, and the business potential it possesses.
“This is the largest shipyard in Canada by about four times. We have the highest capacity and the yard is located within a well-placed, large network of sub-contractors,” he says. “The people of Lévis are incredibly proud of the shipyard – you’d be hard pressed to walk down the street in Lévis and meet someone who doesn’t work at Davie or doesn’t know someone who works there.”
One of the first things Inocea did was restructure the way the yard worked. Vicefield says that was accomplished by implementing a modern, single-suite integrated shipyard management system.
“We’ve got all the best machinery – it’s all state of the art – but we needed to change the way Davie worked,” he says. “The software suite we’ve implemented allows us to do work in packages, instead of by disciplines, and we’ve seen fantastic progress since doing so.”
Work packages are issued to each division supervisor.
“It’s as simple as a worker walking through the gates and swiping his or her pass card – they’re given work packages for the day, which helps us to measure a project’s progress instead of focusing on man hours.”
Vicefield says reopening the Quebec shipyard made sense financially because (ironically) shipbuilding labour costs in Canada are much cheaper than in Europe, where most of the world’s 5,000 ships like the Cecon Pride are produced.
A tariff on imported vessels is also a competitive advantage for Canadian builders.
“When you build a ship, 60% of the cost goes to materials and the other 40% to labour. You’re buying from the same international suppliers. So where shipyards become competitive is on low labour rates, and Quebec is much lower than most yards in Europe,” he says, without discounting the quality of his workforce. He refers to the container ships built in Asia as ‘bathtubs.’
“US and Asian shipyards don’t compete with us when it comes to quality. They don’t build for international clients because there aren’t many there that can produce anything of substance.”
Vicefield says the company is eligible for provincial incentives on labour costs for new designs, which it hopes to leverage.
Davie also recently hired senior managers from the winners of the $33-billion shipbuilding contracts – Halifax’s Irving and Vancouver’s Seaspan – and Vicefield is cautiously optimistic the yard’s workforce will continue to grow to 1,500 by 2014. Up to another 500 jobs could be created if the shipbuilder wins any or all of the remaining federal contracts, which would require breaking out plenty of bubbly as Davie continues its high-tech voyage in calmer waters.
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This article appears in the Nov./Dec. 2013 edition of PLANT.