Most Diverse Orderbook

MSC SeasideWith the largest and most diversified orderbook in the cruise industry, Fincantieri has always pursued a strategy of diversification in all the main fields of shipbuilding with high added value, Luigi Matarazzo, senior executive vice president of newbuildings, told Cruise Industry News.

“On one hand, this allows for an effective risk diversification, on the other hand, this allows us to achieve significant economies of scale on key resources, while at the same time maintaining high operational flexibility,” he added.

“A good example of this is the cooperation between Fincantieri and Vard compensating for the downturn of the offshore market with cruise ship building. We cooperate on the development of small cruise vessels. At the same time, the Romanian yards of Vard, in Tulca and Brailla, build blocks and float sections to our Italian yards, thus increasing the overall manufacturing capability of the group.”

China and France

Fincantieri is also working with China State Shipbuilding Corporation and Carnival Corporation to build ships in China for the Chinese market. Working on the engineering and production aspects, Matarazzo said that delivery dates would be announced once this process has been completed. Plans call for two ships plus four options to be built at Shanghai Waigaoqiao Shipbuilding Co.

Meanwhile, Fincantieri is working to create what it calls a cruise ship industrial park in the Boashan district of Shanghai. This could potentially facilitate an Italian industrial supply chain into Chinese shipbuilding.

Fincantieri’s bid for STX France was also on the table at press time, with a three-party ownership structure being discussed by the Italian and French governments, including Fincantieri, STX France and the French Naval Group.

Matarazzo noted that a potential partnership with STX France would create a truly global leadser in all high-tech shipbuilding sectors. He said the two companies would be able to serve all clients and end markets, generating value not only for shareholders, but also for employees and subcontractors.

‘DNA’

Matarazzo explained how Fincantieri was formed in 1984 by merging different Italian yards into one company. “Therefore, the integration between yards has been part of our DNA.

“We are set up with headquarters in Trieste responsible for sales, purchasing and project management for the yards of the cruise ship business unit. The yards share standards and can be considered and managed as a single integrated production system.

“For example, a yard can build a large floating section, which can be completed in another yard, thus increasing our overall manufacturing capacity and shortening the construction time. Critical resources, such as foremen, skilled workers, technicians and subcontractors, can also be employed where most needed. Thus, our yard in Palermo contributed to the building of the Majestic Princess, which was completed and delivered in Monfalcone. And our yard in Castellammare has teamed up with Sestri for Costa ships.”

In-House

Another aspect of the company’s strategy has been to bring more of the high value added activities in-house. “We need to keep control of the technologies which are essential to the performance of our final product,” Matarazzo explained. “We also need to control the resources and expertise that are critical for the shipbuilding process, especially during a period when a heavy workload is putting pressure on suppliers and subcontractors. In addition, the development of in-house activities enables us to have competencies and highly skilled professionals in our company.

“But none of our in-house companies work on an exclusive basis, they must compete with other specialized suppliers,” he added.

Fincantieri is also partnering with companies to develop technologies. A partnership with GE Power is aimed at developing a better way of controlling and reducing ships’ emissions. An agreement with Mapei is focused on improving the characteristics of materials, such as resins, coatings and special compounds, in order to shorten installation times, reduce weight and improve sound insulation.

While a project with ENI covering the natural gas transport chain is mostly relevant for the offshore sector, the cruise industry is also interested in the development of an LNG distribution chain, Matarazzo noted.

Future Proof

A shipbuilder has to build for the future, he said. The challenge is to ensure that ships that are designed and ordered now have state of the art technologies when they are delivered in six years’ time. That also means that a builder must be familiar with alternative fuels such as LNG, as well as fuel cells, and meet fuel consumption and emissions targets set by shipowners and regulatory bodies.

For Fincantieri, what Matarazzo called pioneering research and development is carried out by CETENA, a specialized research center within the group. It is funded with about 100 million euros annually and involves some 1,000 people.

In addition, the company is working with universities and research institutions, while promoting research and development among its suppliers and subcontractors.

“We can also take advantage of ‘technological cross-fertilization’ as we have access to technologies and know-how from our different business units, covering merchant, naval and offshore shipbuilding,” he added.

34-Ship Orderbook

Fincantieri (with Vard) has a combined orderbook of 34 cruise ships, including three big prototypes.

“We are working on prototypes for Virgin, MSC and Norwegian,” Matarazzo said. “Other designs, such as for Costa Asia, are substantial evolutions of well proven platforms. I must also underline that sister ships are constantly evolving, being updated with the latest technologies.

“Our product range spans from small expedition vessels to luxury ships and very large, contemporary market ships. Within each market segment we are able to propose configurations tuned to the individual needs of each customer.

“We must also consider that our manufacturing system, consisting of many yards of different sizes and characteristics, is intrinsically flexible and can provide the most appropriate manufacturing approach for each size and type of vessel.”

Excerpt from Cruise Industry News Quarterly Magazine: Fall 2017

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Cruise Ship Orderbook

123 Ships | 273,824 Berths | $70 Billion | View

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