News of Ongoing Negotiations

I was just about ready to release this article about my March 31st visit to Rauma Marine Constructions, a shipyard located on Finland’s West Coast, when this story broke overnight in Helsingin Sanomat, Finland’s newspaper of record:

In English (machine translated via Google):

Rauma shipyard is negotiating with the US Coast Guard about the construction of several icebreakers, three sources familiar with the matter say.

According to the preliminary plan, the shipyard would initially be ready to build 3–5 medium-sized icebreakers. The value of the five orders would be approximately 2.5 billion euros. If the order were to be implemented, it would have a significant employment impact in the Finnish maritime industry.

However, the negotiations do not mean that the order is anywhere near certain. The US Coast Guard has inquired from several shipyards about their readiness to build medium-sized icebreakers in 36 months.

In addition, Rauma shipyard has explored the possibility of building three large icebreakers for the United States. The value of an order for three large vessels would apparently be greater than that of five medium-sized ones.

This doesn’t mean that Davie’s Helsinki Shipyard is out of the running:

Another key issue is the Helsinki shipyard. It is quite possible that the United States would eventually order icebreakers from Helsinki as well.

In the backdrop of all this is the RFI that the U.S. Coast Guard issued one week ago (I wrote about it here) looking for ready-to-build designs for the Arctic Security Cutter. It seems as if that is part of a different effort, the RFI focused on existing vessels or production-ready vessel designs. Nothing in this article puts such a limit on the deal.

Introducing Rauma Marine Constructions

Until today, articles about icebreaker construction in Finland have mainly focused on Davie’s Helsinki Shipyard, which will take part in the construction of a Polar icebreaker for Canada. Rauma is a larger shipyard with a long history of building ice-capable ships and ships for the Finnish Navy. Today we will take a close look at its capabilities, which will help to explain why it could be a good fit for a U.S. deal.

Shipbuilding in Rauma dates back to the 16th century, with modern shipbuilding beginning after the second world war in order to build ships for the Soviet Union as war reparations. The shipyard facilities have changed hands many times throughout history. RMC itself was established in 2014 after STX Finland closed its Rauma Shipyard. It is owned by investors including the Finnish State Industrial Investment Company.

Rauma Marine Constructions (RMC) Facilities

RMC Facilities:

• 280m x 85m dry dock (919ft x 279 ft)

• 2 outfitting quays (240m, 220m) (787 ft, 722 ft)

• 26,000 m3 multi-purpose build hall (186 m long, 44 m wide, 32 m tall) built to securely build warships. (918,181 ft3: 610 ft long, 144 ft wide, 105 ft tall)

• steel production (15,000 tons/year)

• Heavy-lift barge, hardened launch ramp, and associated heavy lift machinery for launching vessels from the multi-purpose hall.

On March 31st, I had the chance to visit RMC for the second time. My first visit, in 2020, was before the multi-purpose construction hall was completed. It was good to see the new facilities, but also the work going on in various parts of the shipyard.

RMC was working two projects during my visit. First, work was ongoing on the first two of four planned corvettes for the Finnish Navy. Assembly of the first two hulls in ongoing in the multi-purpose hall. You can see the first vessel is nearly ready for launch:

Blocks for the second vessel were already being placed in the construction hall for assembly while in the nearby fabrication building, other blocks for the second vessel were being built.

RMC was also outfitting the Spirit of Tasmania V, the second of two high-speed ferries it built for TT-line.

RMC and Icebreakers

Many icebreakers have been built in Rauma over the years, including the multi-purpose icebreakers Nordica, Fennica, and Botnica. Nordica and Fennica are operated by the Finnish state-owned company Arctia; you can read more about them here. Botnica was later purchased by the port of Tallinn. The last Polar Class vessel built in Rauma was the S.A. Agulhas II, a PC5 polar supply and research vessel built for South Africa and delivered in 2012.

RMC itself came into existence in 2014, but as Mika Laurilehto of RMC points out here, a large portion of RMC’s work force worked for the Rauma yards when those icebreakers were built. Additionally, RMC has been building ice-capable vessels- such as the Finnish Navy Corvettes and the 1A super ice class ferry Aurora Botnia. Recently, just to test their ability to work with thick steel, their steel production facility produced this test piece:

This is 33mm (1.3 inch), 500 MPA steel, 3D bent, with stiffeners. Although only a small piece, it demonstrates that RMC retains the ability to work with the types of steel required for high Polar Class vessels.

In the background, you can see RMC’s steel production facility. As noted above, RMC maintains its own steel production facility and can produce up to 15,000 tons per year. Helsinki Shipyard shut down its own steel production in 2003 and now must rely on other facilities to produce the ‘blocks.’ It is possible for the two yards to work together, with block construction occurring at RMC for a ship being built in Helsinki. RMC has a larger footprint than Helsinki shipyard and can run several production lines at the same time (such as the TT Line ferries for Tasmania and the Finnish Navy’s Corvettes).

Similar to Helsinki, RMC says they can build an icebreaker for the U.S. Coast Guard within three years of contract signing. The first step would be a letter of intent followed by about six months of concept design in which the shipyard, design firm, and U.S. Coast Guard would work to define the requirements and create the concept design. At the end of that approximate six-month period, RMC would sign a build contract. Three years later, the U.S. Coast Guard would have one (or more) icebreakers delivered. With the launch of the first corvette approaching, RMC leadership tells me that if the U.S. acts now, it has the resources to begin work this summer.

Thoughts and Comments

I cannot confirm the news reported by Helsingin Sanomat. Although I discussed with RMC leadership how such a process would generally work, we did not discuss specifics. The reported cost- five medium-sized icebreakers for approximately 2.5 billion Euro- does seem more in line with historic Finnish pricing.

If a deal were to be done in Finland, a deal that involved large quantities of vessels, I could easily see both Helsinki Shipyard and RMC being involved. As it was noted to me- by executives from both Davie’s Helsinki Shipyard and RMC- there are plenty of orders coming. Finland just signed a deal with Aker Arctic to design its next icebreaker, and Sweden has a tender offer out to build one. Estonia is also in the planning stages. For both Finland and Sweden, this is just the start of a process to recapitalize their older vessels. With Davie also planning an investment in a U.S. shipyard, the coming orders should create work for all of the skilled shipyards.

It’s certainly getting interesting.

I’ve seen nothing (yet) in English, and the HS article is behind a paywall. You can find some details (in Finnish) in this article by YLE, Finland’s state broadcaster.

I wish you all a Blessed Easter and an enjoyable weekend. More to follow, I’m sure. Be sure to subscribe so you don’t miss important updates and analysis.

All the best,

PGR

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