Q&A: Infrastrata CEO John Wood on the future of UK shipbuilding
Following the UK Prime Minister’s pledge to making the UK the foremost naval power in Europe, Harry Lye caught up with John Wood, CEO of Infrastrata, the owner of Harland & Wolff, about the future of UK shipbuilding, the Fleet Solid Support ship competition, and progress on modernising the historic shipyards.
The Prime Minister has put the Royal Navy and shipbuilding at the heart of new defence investment. How positive do you see that as being for the industry moving forward?
If you look at the Infrastrata strategy for acquiring Harland & Wolff in the first place, I think that was really all around the crisis that UK shipbuilding was in, and the resilience that we saw coming from that as we move forward.
We took the decision on this well over a year ago for our first yard, Harland & Wolff in Belfast, and then we subsequently followed that up with the Appledore shipyard in the summer.
If you look at the number of vessels that need to be acquired by UK government in the next ten years, we believe there are over 100 government vessels, either direct Ministry of Defence or government department vessels, that need to be purchased in the next ten years. We looked at the capability that's around the yards and we didn't believe there was enough capability. That's why we made that decision.
I think the fact that that the Prime Minister has now confirmed the batch two Type 26, the batch two Type 31, and the Fleet Solid Support (FSS) ship programme really makes this an exciting place to be in.
Don't forget, the Prime Minister came down to Appledore when we acquired the yard and walked around the site. I had the opportunity to discuss the future of defence shipbuilding, but also overall shipbuilding, because, I think the niche that we're looking to exploit is not the one of the big two primes that solely look to focus 100% on defence. We've actually got five markets that we focus on: defence, commercial, oil and gas, cruise and ferry and renewables.
We're really looking for a nice balanced portfolio over those five different markets. So that we're not 100% relying on defence, because obviously, you get the booms and troughs in that defence market, which really makes it difficult to keep a stable workforce on go at all times. When you look at the shipbuilding sector, I think it's buoyant. Look at the commercial shipbuilding sector; I think there are massive opportunities in that. That'll be springboarding off the back of some of the defence contracts that are coming round. I think it's a great place to be in at the moment.
// John Wood and Boris Johnson tour the Harland & Wolff shipyard in Appledore.
How confident are you in Infrastrata’s joint bid with Navantia for the FSS competition?
When you look at Fleet Solid Support, I think you need to look at it in the context of the announcement that has been made with the confirmation of batch two Type 31, batch two Type 26, and say where is the capacity in the UK for FSS?
The capacity is clearly in Harland & Wolff on the size of the just-short-of 100-acre site. We've got 30,000 square metres of undercover fabrication space and a 556-metre building dock. We could actually build all three vessels in the dock at the same time if we wanted to.
I think when you look at the space available, and the capacity available, Harland & Wolff would make a sensible choice and a considered approach to risk, splitting the projects up.
The Defence Secretary and First Sea Lord have both spoken of new multi-role research vessels. Is this another area where you think Infrastrata could see success?
When you look at the one letter of intent that we have on the table at the moment, it's actually for wind farm construction vessel, that's in the renewable sector. When you look at that type of vessel versus a survey vessel, they're very similar in nature.
Any type of vessel, we will be interested in and we will bid for. It's a case of making sure the work that's in the UK is split up amongst the yards in a sensible fashion so that the yards all do get a share of the work and the most practical method to deliver the projects with the lowest risk going forward.
There is a great shipbuilding future for the UK going forward. With Brexit having taken place, we believe the work remaining in the UK, as far as practical, would be a great sign going forward.
Can you give us an update on the state of works at the yards?
If you look at Belfast, we acquired that in December 2019, it's really about six months ahead of Appledore. Similar work is going on; we've got the 556-metre building dock and the 335-metre Belfast dock. We've had the dock gates out, completed some major steelwork and seal work on the dock gates and had them back in.
We've got the 30,000 square metre fabrication space there in Belfast and we've just installed a new robotic panel line there that really sets up that future shipbuilding capability. We're looking at FSS and the other vessels that are coming through.
When you look at where we are with Appledore; the dock gates have been out – they hadn't been out for 60-odd years and we put about 25 tonnes of steel into those dock gates. The first of those is now painted and being refitted, the other two are closely following behind it.
All the plant equipment is being upgraded and brought back into service. We're really looking at that yard to be back in operation on the new building side and the dry dock side – don't forget is one of the largest, small, undercover dry docks in the UK up to 120 metres and that really complements us. We've got the two biggest dry docks in the UK, and then we have got the largest undercover dry dock.
In Appledore, we've also got the slipway and that's gone through a full refurbishment programme. That will take vessels, barges and landing craft up to about 300 metres. We should have the first vessels up on that later this month.
It's all systems go, but clearly what’s coming into the yards and into the new build site is a priority. At this moment in time, we're still working hard to secure that first contract for both yards on the new build side.
It sounds like it is as much about modernising the yards as repairing them?
I think you've got two phases to it; the first phase that we started on was getting both of the yards up to a minimum standard that we were happy with, to operate in a safe and environmentally friendly manner.
When we look at moving forward, one thing we look at is how do we compete on the global stage? A lot of that has to do with the number of hours per ton for steel fabrication, anything we can do to reduce the hours per ton is something we're taking very seriously.
I think the panel line is a natural progression of where we need to be and having that plant equipment; a twin-headed robotic panel line cuts by a third the amount of time it would normally take to produce panels using the conventional method. It makes 100% business sense to invest in that.
This is the first time robotic equipment on that scale has been invested into Harland & Wolff in a long time. It's pleasing to see that arrive and now being installed.
Our of your five target markets, what share do you think defence will take over the next decade?
We think defence will be between 30 and 40% of the business going forward. The key thing is really not to be over-reliant on defence. If there's a pause in defence spending, we don't want to get caught with that and we want to maintain a stable workforce and the stability of what goes on through the yard.
The key thing at the moment, with the 120 government vessels over the next ten years, is really to use those vessels as a springboard into the commercial market, so we can play both markets against each other as we move forward.
When you look at a cruise vessel coming into dry dock, for example, and spending £60m in 30 days, and you look at the amount of time that defence vessels spend in dry dock, diminishing platform availability. It is really about also learning from some of the adjacent industries and bringing in some of that project planning and programming into the defence industry to bring it to the next level.
One of the projects I was involved in was the anti-ship missile defence upgrade on the Anzac frigates for the Australian Navy. We certainly brought learning from adjacent industries into that programme and substantially reduced the out of service time for the vessels. It's that type of thing that we bring to the table as we move forward.
// Main image: John Wood, CEO of Infrastrata, at Harland & Wolff shipyard in Appledore.