Diversification is the key
Harland and Wolff's name will forever by synonymous with the ill-fated Titanic, but today they are forging a new reputation in the renewable energy sector as E&T discovers.
David McVeigh, born in 1970 and a native of Belfast, started with Harland and Wolff as a student apprentice and worked on a wide range of new-build projects including tankers, shuttle tankers, bulkers, semi-subs, naval vessels, floating production storage and offloading, and drill ships.
He eventually worked up to the position of project manager for the new-build construction of two RoRo ferries and became sales and marketing manager in 2003.
E&T: Harland and Wolff embarked on a major diversification strategy about five years ago allowing it to open up to new markets for its services and products. Can you outline why and tell us how it is going?
David McVeigh: Obviously we are still deeply involved in shipbuilding, just in a different way than we were in the past. We have an excellent engineering division and we are still doing ship design work.
We saw that it was getting more and more difficult, and also you were at the mercy of the vagaries of the market place. What we needed to do was to use our inherent capability to see what else is out there that matched... and to make sure that whenever one market was up and another one was down that we always had something to focus our attention on.
E&T: What proportion of your work currently comes from each sector?
DM: It's about one third renewables, a third marine and a third construction.
E&T: Is the renewables market more lucrative, or is it easier than repairing ships?
DM: Everything is easier than repairing ships! Ship repair is a tough business - high activity and very fast. Anybody who has had a lot of experience in the oil and gas industry will recognise the renewables industry. You don't wish to be condescending, but what they are going through - we have already been through. The wind guys for example are moving from onshore to offshore, and into deeper waters which is exactly the same path that the oil and gas guys tread and the same problems are going to come up, which the oil and gas guys have a solution to. That's why the best people can have an awful lot to offer to the offshore wind industry because they have a lot of the solutions. There is always going to be difficulties and differences but its a similar process.
The marine industry will have its difficulties and it's in the middle of those right now, but rather than think about what is my core market, think about the core skill and how they can be applied to other markets.
E&T: How do you see the future?
DM: I long to say that we're ahead of the curve and we are the smart ones trying to get into the renewables sector. An awful lot of it is what your gut instincts are, and there is a good dose of luck involved. We are no smarter than anybody else, we work hard just like everybody else, but the renewables sector for us will continue to be a major player.
The targets for 2020 and beyond are not moving - the commitments from the government are not moving - the money that has been made available is still there. You will see continued acceleration in the renewables sector and, I think, if we look back at ourselves - at our recent history, whether it is oil, gas or whatever - it's all been related to energy. There is always going to be that requirement.
For me, wind is still going to be big but I do believe the next big units we are going to see are in wave and tide. The offshore wind guys are now at the stage where they have proven units and they are just trying to make them more and more reliable. The figures associated with offshore wind are now pretty robust so people know what they are getting into when they are investing for the future. The wave and tide guys are a little behind that but they are working hard to try and bring their products to market.
I sincerely believe that is where there is going to be real growth, especially in Western Europe. We have everything that could and should make it work. We have a strong wind, wave and tide, and reasonably cold waters close to dense population centres which require the energy. We have the network and the infrastructure to receive the energy, and we have a heavy industrial base to make it happen. If we don't make it happen, we will end up paying somebody else to make it happen for us.