Southern African Shipyards

Managing directorof Southern African Shipyards (SAS) Louis Gontier has a burning ambition. He is determined to take Africa’s leading commercial and naval shipbuilder from a regional to a global platform.

Based in the Port of Durban, Africa’s busiest port, the shipyard has passed through many phases of evolution—it once focused on luxury yachts—and now concentrates on vessels up to 100 metres in length, particularly large Voith Schneider tugs and otherharbour tugs. “We have the capability to tackle bigger projects, but we are restricted on our launching facilities,” Gontier explains.

The company was taken over by a consortium of investors in 2006 having been closed for three years—a move made possible by a loan from the South African government. One of the biggest challenges in returning the company to profitability has been recruiting and training the master shipbuilders who underpin the enterprise. South Africa’s shipbuilding industry is undergoing a renaissance after a number of low-key years—now, SAS is playing a major role in rejuvenating the industry. The yard directly employs or contracts up to 400 personnel including highly skilled craftsmen and is taking a leading role in training the next generation of shipbuilders.

“We have undergone many growing pains with regard to staffing the industry. Training is an enormous priority for us and fundamental to the future of the South African shipbuilding industry. We started a full apprenticeship programme about eighteen months ago, but there are no short cuts possible—it can take five to seven years to make a master shipbuilder,” he says.

The shipyard has been in existence for a number of years, but Gontier believes his team has succeeded in breathing new life and energy into the business, in keeping with the new face of South Africa. Black Empowerment is taken very seriously and the yard is fully compliant with all of South Africa’s labour legislation. “We see ourselves as a young and dynamic company that has developed the skills and knowledge to take on complex, out-of-the-ordinary projects that other shipyards may not feel able to tackle,” he explains.

There are, he believes, several important differentiators that set SAS apart from its competitors. “We not only produce a top quality, high end vessel, but we are also extremely flexible in our approach to customisation. Of course we build from a standard platform, but the actual layout of the vessel—for example,different equipment combinations and the number of crew it can carry—depends totally on the client specification,” he says.

“Unlike many other yards which compete only on price, we have no interest in compelling our customers to take a standard design or making them pay the earth if they want to deviate from the standard. We are very happy to adapt a specific design to meet the precise needs of each customer and we go much further than most other shipyards to ensure that our clients get a vessel that exactly suits their requirements.”

Gontier points out that there are a number of different procurement strategies when it comes to making this type of investment, bearing in mind that a typical vessel can cost in the region of $18 million to build. “We believe that total lifetime cost is much more important than the initial purchase cost, but there are many different approaches. Often, it is a question of achieving a balance between maintenance costs and reliability. Others will opt to renew a vessel after five to seven years, meaning there are no maintenance costs at all.”

However, he believes that the influx of cheap, low quality tugs from China has highlighted the importance of quality standards. “If a vessel is built in China, it will generally be necessary to start an immediate maintenance programme which means it cannot be in constant service. Our tugs, on the other hand, should be virtually maintenance-free for the first five to seven years and they will also be extremely reliable,” he says.  

When maintenance is finally needed, the yard boasts a state-of-the-art repair facility offering the full portfolio of services, from rudder and underwater hull repairs to electrical and hydraulic revisions. “In the future, we see ship repair and maintenance as very important to our growth. In common with all shipbuilders, that is where the opportunity to make money lies.”

Reliability is particularly important to the oil and gas industry—just one of the sectors SAS aims to target through its repair services. If critical supplies cannot be moved to an offshore platform because of equipment failure, the resulting downtime can quickly lead to losses that run into thousands of dollars a day.

Approximately four tugs a year leave the shipyard at present, but there is the capacity to work around the clock; and the yard can also accommodate a dual build programme. However, Gontier has his sights firmly set on new ventures further afield. The company is in talks with potential partners in countries as far away as Finland and he also believes there is a bigger opportunity on the African continent.

“Take West Africa and Angola, for example,” he continues. “There is a major market for offshore vessels from these countries because of their growing energy sector. It is an opportunity that we hope to tap into by sharing our expertise through partnerships with other shipyards where the industry is less well developed.”

Gontier believes that expanding along the African coast by partnering with embryonic enterprises is a win-win proposition for any country that seriously believes it can develop a national shipbuilding capability. “We have a deep and profound knowledge base. The operation we have created in Durban since taking over the company could be seen as a highly successful blueprint to replicate elsewhere. We have proved that our way of working has something valuable to offer,” he concludes.

Editorial research by Vincent Kielty