Crossing over to cruise
The harsh climate of Norway’s north-western coast forms the backdrop of a maritime tradition marked by resilience and determination to succeed. Ulstein Group, a third-generation, family-owned marine company, knows why being small means being successful.
In November 2017, the expedition cruise operator Lindblad Expeditions Holdings signed an agreement with Norwegian shipbuilder utilizing Ulstein’s iconic X-BOW®. Ulstein Verft is to build a leading-edge polar expedition ship to be delivered in 2020, with an option for two additional vessels. The new ship will be built with DNV GL class. What makes this project remarkable is the fact that Ulstein has been known as a builder of offshore support vessels and is a newcomer to the cruise sector. Two similar projects, including a battery-powered hybrid ferry for Color Line and another expedition cruise ship for SunStone TBN, are likewise in the early stages.
“Ulstein is well known as a company that has designed and built some very sophisticated ships,” says Helge Hermundsgård, Business Development Manager at DNV GL. “Ulstein designs always stand out a little. For example, they invented the X-BOW, which reduces slamming, enhances comfort on board and improves fuel efﬁciency.” The obvious reason for an offshore vessel specialist to venture into the cruise sector is the sustained bust of the oil and gas business. But there is more behind it, says Tore Ulstein, Chairman of the Board, Deputy CEO and Chief Market & Innovation Ofﬁcer of Ulstein Group. “To understand the philosophy of our family business, which just celebrated its 100th anniversary, it is worth taking a look at its history.”
Driven by innovation
It all began with Martin Ulstein, today’s owners’ grandfather who was both a ﬁsherman and a shipwright. “In those days, men used to go ﬁshing during the ﬁshing season and work in the repair yard during the off-season. So they had the experience of both – braving the harsh ocean environment, and maintaining and improving their ships. Our grandfather wanted to develop something of his own and challenge the ways things were done, so he started his own company building ﬁshing boats in 1917.”
In the 1950s, when the demand for car ferries emerged, Ulstein built their ﬁrst steel ships. Eventually trawlers and ships for the oil and gas ﬁelds followed, and more recently, offshore support vessels for wind farms. “With all this experience as our foundation, we realized we were in a great position to move into the cruise industry, in particular, the smaller expedition-type vessels. These ships must provide a very stable and comfortable working platform for regions like Antarctica where the weather conditions are extremely harsh.” Regions where reliability and stability are key. “Our experience with DP3 vessels becomes important when we sit together with DNV GL, our trusted partner of many years, to develop safe-return-to-port concepts,” says Tore Ulstein. “These considerations are also relevant when we design the hull lines for expedition ships. Our X-BOW reduces up to ten per cent of involuntary speed loss in waves so the ship can maintain a higher transit speed. All this is useful when we cross over into cruise where those properties are greatly valued.” The new expedition vessel will be Lindblad’s ﬁrst ship to feature Ulstein’s signature X-BOW.
The expanding cruise sector offers Ulstein a great opportunity to challenge existing designs and practices. “But we also challenge ourselves – the way we work and design ships,” Tore Ulstein notes. “Innovation means making them more efﬁcient, smarter, and greener, not only with regard to propulsion or power generation and distribution systems, but also in terms of the hull form, which has a signiﬁcant inﬂuence on the environmental impact.”
Entering the cruise segment meant a paradigm change for Ulstein Group. But, says the Deputy CEO, “no matter what ship type we build, our perspective is always holistic: we need to understand what the customer needs. What is new about building cruise ships is the aspect of the passenger experience: cruise operators focus on what generates income for them. Based on our expertise we provide a maritime platform that is robust, effective, safe and efﬁcient. As for the hotel, the cabins, the features, the logistics, etc., we partner up with designers and architects who know what is needed in this business.” Learning rapidly has always been a top priority at our company, says Ulstein. “We come from a very engineeringdriven environment, and we are working hard to understand the business case of our clients – how these platforms can be improved to support a new and exciting passenger experience.”
Unconventional business model
For a relatively small shipbuilding company like Ulstein Verft, differentiation in the market is key. Ship design is where Ulstein really excels. “We sell design solutions, equipment packages and support to other yards worldwide. We build prototypes here in Norway and use this practical experience to support our partner yards internationally. We train their teams in Ulsteinvik so they can build advanced vessels, for instance, in China. This transfer of knowledge enables our partner yards to implement our designs and solutions. And since we are a small yard, the big yards we work with don’t consider us a threat.” Well over 60 Ulsteindesigned vessels have been built in China, Dubai, Brazil, Singapore and Europe over the years.
Another unique selling proposition is that the company is involved in all processes from the concept through to the operation of a new ship. “Because we are engaged in the entire value chain, we can take a holistic view on shipbuilding. This comprehensive, integrated know-how coupling all stages of the process is our advantage,” Ulstein assures.
As a vendor of technology and knowledge, Ulstein Group must always think ahead. “We are not afraid that our know-how will end up in the wrong hands. My father used to say: ‘If you use the money you earn on accelerating your own development and being proactive, you will become stronger.’ Of course we have to be smart about the way we distribute our knowledge, and we avoid imparting all of it to a single party. We transfer our knowledge to become stronger and closer to our customers.”
Ulstein does not want to become a slave to its own capacity and be under constant pressure to acquire new business, he adds. Rather than expanding their own shipbuilding capacity, the company drives its design and development capability to feed it to the partner yards abroad. “We are building up a virtual shipbuilding group without incurring the risks.”
What draws owners to Ulstein, says DNV GL’s Helge Hermundsgård, is the company’s commitment to on-time delivery, very high quality and workmanship standards, and innovative ingenuity. Tore Ulstein adds: “Owners like to come to us because we are a small player. It means they will get more attention.” With this in mind, Ulstein Group’s Deputy CEO sees plenty of reason to feel conﬁdent about his company’s future.