David Margasan: North European Quality of Ship Repairing Coming to Mediterranean

By , 17 Jan 2019, 13:17 PM Business
David Margasan David Margasan Porto Montenegro

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The new repair shipyard for super and mega yachts of the renowned Dutch shipbuilding company Damen and Porto Montenegro consortium in Bijela, could start providing their first services to customers by the end of this year. In the first three years of the new company's business, which is still run under the working name of Montenegro Yacht Services (MYS), more than 20 million euros will be invested, and Bijela will, if everything is realized according to plan, become a credible and competitive alternative to the so-called renowned service centers and overhaul yachting yards in France, Spain and the west coast of Italy.

This was said in an exclusive interview with "Vijesti" - the first one given to the Montenegrin media, by the executive director of Adriatic Marinas - Porto Montenegro (PM) David Margasan.

The Government and the Damen-PM consortium finally signed a 30-year concession contract for the economic development of the shipyard Bijela. The Dutch and PM have leased 198,294 square meters of land and 281,077 square meters of aquatorium. For this, MYS will pay an annual fixed concession fee of 123,303 euros and a variable fee of 5% of EBITDA (income fewer expenses without depreciation costs) of up to 5 million, i.e. 3 % for EBITDA new company exceeding 5 million euros. The plan is that in the first year of operation, the new shipyard will repair 14 super yachts (ships longer than 25 meters), while in the fifth year of operations, the number of yachts repaired will be 109. With 35 workers in the first year of operation, the MYS will grow to 300 - 400 employees in its fifth year, and the former shipyard for cargo ships in Bijela, will be transformed into a sophisticated technology center similar to the specialized yacht repair yards in northern Europe, capable of providing all types of the most complex refit and conversion works on super and mega yachts between 25 and 125 meters. The agreed prerequisite for the commencement of the work of MYS, which has already acquired about 2.65 million euros worth of facilities and equipment of the former Adriatic Shipyard Bijela (JBB), is that the French company Vlago, which was engaged by the Government, by March 2020 completes the environmental remediation of that area, which implies removing about 150 thousand tons of grit and contaminated soil from Bijela.

"The concession contract gives us the right to, if there is a possibility, MYS even before the completion of the remedy, can begin to work. Therefore, we intend to start with the organization of the entire system, hiring first workers and preparing to start certain types of overhaul services that can be carried on ships anchored in Bijela, without bringing them on the land from the sea, at the end of this year. So, we think that by the end of the year, we will be working on larger yachts that would be anchored at the main Jetty of the shipyard on its west side, on the part where previously the floating docks of JBB were located. The plan is to simultaneously offer to lift from the sea and service of small yachts that can be lifted on the coast by mobile cranes. It all depends on the ability to provide customers with the highest possible level of quality because a good reputation and its preservation are crucial for Damen.

When can you expect the arrival of a new floating dock?

"The floating dock will arrive in Bijela in the first half of next year. This is a brand new floating dock that Damen will build and for which the design is finished, and the purchase of building materials began. Namely, since the MYS will function in such a way that the yacht that is lifted from the sea will be brought to the docks, and then from the dock, by the special transporters on wheels, shifted to the operational shore or to the workshops, the new floating dock must have a very sophisticated ballasting system to maintain its stability and stability in the raised yachts at sensitive moments of changing load and stability while the yacht is "dragging" from the dock to the shore and vice versa. Currently, there is only one such the so-called load out recovery dock in the world and is located in Qatar. In addition, our dock will also have internal tanks for the collection of water and material from the underwater dial of raised yachts, when they are washed with water under high pressure, in order to remove scrubs of the algae and shells, in order to keep all these materials on the docks and not in the sea, so it would be treated in the right way in accordance with the strict environmental standards applied by the MYS.

We have already planned the position at which the floating dock can be temporarily located and used until the remediation of the shipyard's premises is completed. In the meantime, the necessary construction works will be carried out to put the dock on its permanent position, as well as strengthen the operational shore and the plateau within the shipyard so that they can withstand the heavy load of "walking" on them by the transporter, with the ships of hundreds of tons weight. The new dock will have the lifting capacity of 3,000 tons and will be a modular construction, which means it will be subsequently extended, by simply adding new sections, so it can be extended up to a total length of 150 meters and increased in its power of lifting to 7,000 tons. Later, the shipbuilding capacities will be completed by building new travel lifts.

 An animation of the future look of the shipyard in Bijela - Damen

In the business plan, MYS will concentrate on overhauling yachts of steel and aluminium, over 30 meters in length. Does this mean that you eliminate the possibility of overhauling small yachts made of composite materials and wood and deny yourself of a good part of the market because precisely such yachts are now prevalent in Montenegro?

"Yachts below 30 meters are not our main target market for the future development of the MYS. We did not, however, exclude the possibility of overhauling smaller fiberglass or wooden boats as specialists-subcontractors can do it at moments when we have free capacity. There are more and more large yachts made of fiberglass, even up to 40 meters long, built in the world, so there is no reason why they would not work on such wooden boats or ships. However, after all, it is not a large market and a revenue generator, so the economic base and the main part of the MYS business will be larger yachts of steel and aluminum. As the main source of work, at least initially, we count on yachts that reside in Porto Montenegro, as well as other marinas in Montenegro because marinas are built in Lustica Bay and Portonovi. Also, having in mind the competition in the West Mediterranean and the Adriatic coast of Italy, and the number of mega and super yachts that are currently floating in the Mediterranean, we count on some 375 larger yachts from all over the Mediterranean as potential clients of the MYS. Only Amel’s superyachts in the Mediterranean are now about 50, and since they are the Damen brand, it is logical to expect them to use the services in the warranty period or maintenance and overhaul during the non-warranty period in the only Damen shipyard in the region - in Bijela. We will be a repair hub for Amel’s yachts in the Mediterranean."

 Will the new shipyard, except for yachts, be available for any other type of vessel - perhaps for the overhaul of Montenegrin Army naval vessels or vessels of the Government institutions in Montenegro?

 I am confident that MYS will be delighted with the opportunity to, for example, finish or repair the School Naval ship “Jadran” by the Montenegrin Army, because the beauty and significance of this ship is at the same time an excellent point in the reference list of each ship rebuilder. That's why we would always find places and time and enthusiasm to repair "Jadran". However, from the very beginning of this project, we have taken the stand that MYS will not be a "hybrid" shipyard that will repair cargo, warships or any other boats, except yachts. It will solely be a shipyard for yacht repair and conversion because only in this way can we guarantee the highest level of quality of our services for yacht owners.

"How do you think that Damen and its existing cooperators around the world will influence the development and capabilities of the new shipyard in Bijela?

"We believe that the main value of the new project in Bijela is reputation and quality, which in the world is called by the name Damen. Their globally recognized skills in the domain of construction, build and overhaul of all types of boats, and especially mega and super yachts through their brand Amels, one of the three strongest in the field of yachting in the world, make Damen's arrival in Bijela not only great news for Porto Montenegro but also Montenegro as a whole. That is, it opens a whole new set of possibilities for the progress and development of the Montenegrin economy, the revitalization of the activities of the ship repair, which has a great tradition in the Boka Bay, and the expansion of clusters of Montenegrin companies that in the future would, if the extremely stringent quality conditions, prices and deadline required by Damen are to be met,, could have their products and services included in the chain of MYS subcontractors. We want people to talk about the Adriatic in the future as the new Riviera (Cote d'Azur in France and part of the Tyrrhenian coast of Italy - prim.aut.) as a main point of yachting. Things in the industry are already slowly moving from the Western Mediterranean eastward, and Montenegro and Croatia, above all, are becoming more and more interesting as destinations for yacht berths, i.e cruise. With the partners from Croatia, Serbia, Slovenia and Montenegro, we have already launched the Adriatic Yachting Association of AYA with the aim of enhancing the yachting service in the region through a better connection of the prominent companies, working jointly, supporting partner companies and becoming a lobbyist in the Mediterranean. There is no reason why the Adriatic at some time in terms of yachting will not become equal to the Riviera. A very important step in this process is the increase in the global world about the technical capabilities of the Adriatic region in the field of overhaul of mega and super yachts, through Damen's arrival in this region and through the project in Bijela."

In the Business Plan, you state that MYS should be a credible alternative to ICOMIA's super-yacht repair service from the Western Mediterranean, but also to a much closer and "dangerous" competition on the Adriatic coast of Italy, such as the ISA in Ancona. How do you intend to achieve it?

"Against the competition, we will fight with quality, respect of deadlines and available budget, and reasonable prices as well as, of course, the reputation Damen enjoys around the world. From the engineering and technological point of view, MYS does not deal with overhaul yachting yards in the Western Mediterranean, but with those in northern Europe - the Netherlands and Germany, which are world leaders in that domain. Our goal is to bring the North European quality benchmarks in the Mediterranean through MYS, and with a partner such as Damen, we can achieve this. Their shipyards are located all over the world, and they managed to create an appropriate work ethic and attitude in the business, even in countries where there was not much of these such as Vietnam or Romania. I am 100 percent confident that Damen will do the same here in Montenegro because it only does not make sense that Damen operates a shipyard or a facility that does not provide services to the highest standards and the highest level of quality. Although people are joking here, including your premiere, with the alleged Montenegrin laziness as workers, my experiences are quite different - I personally saw that, when given the right opportunities, the local people are very valuable and happy to be able to express themselves in the right occasion.

I do not see the reason why this would not be the case, especially because the people working in the technical and shipbuilding industries generally have a different psychology and access to work, especially if they come from the domain of the industry that has been working for military needs, as it was often the case on the territory of former Yugoslavia. The level of discipline and work ethics for such companies is such that you can not often find it in classical civilian companies, and here, fortunately, we still have a lot of such people who used to work for example, in Arsenal in Tivat. They and workers of the former Bijela shipyard with global training programs in their shipyards around the world, offered by Damen and its subcontractors, will certainly be able to meet the needs and requirements of MYS. The main and most frequently mentioned topic I hear when I talk to Damen partners about MYS is training of the staff, and I am sure that we will succeed in doing so with people who are still here and have those skills, as with people from Montenegro - from Arsenal or JBB who have gone abroad to work in Singapore, Dubai, to Northern Europe and who will want to return and do the job in their own country. To begin with, they will, of course, work with some foreign experts who will be employed by Damen, but as the skill level of domestic engineers and masters grows, this attitude will slowly change in favor of domicile workforce."

Can MYS contribute more to the progress of the Montenegrin economy and the development of the capacity of domestic, now almost non-existent industries?

"Damen will lead the shipyard, and they are the ones who will evaluate what and how is the best way to make this company meet the basic and key criteria according to which Damen operates - high quality, fair prices and good planning, i.e. strictly fulfilling the deadlines. The goal for them and us is that, when a new shipyard is opened, it provides absolutely the highest quality yacht repair services throughout the Adriatic region. There must be no compromise on the short run, as this could cause irreparable long-term damage to the whole venture. It is undoubtedly that the new shipyard, however, will want to cooperate with local subcontractors and suppliers wherever possible, because it is simpler and cheaper, but it is for local suppliers and service providers to bring their offer, materials and services to the required level of quality so that they could work with Damen. All who can do it, are more than welcome."

Text by Sinisa Lukovic, on January 16th 2019, read more at Boka news

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