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Øyvind E. Haga Director, Innovation Norway Canada
Discover your business potential within the National Shipbuilding Strategy in Canada Øyvind E. Haga Director, Innovation Norway Canada p
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Key drivers in the shipbuilding industry in Canada
Mid 90’s and two decades ahead - no federal orders for ships Shipyards closing or converting to general industry Erosion of shipbuilding capacity – also affecting ability to procure, plan and budget Delays of a much needed renewal of coastguard and navy fleet To understand the opportunities for Norwegian suppliers in Canada, we must understand the shipbuilding history in Canada For almost two decades there were no federal orders of new ships in Canada to the navy or coastguard As a result Two major effects of this was that several shipyards closed and others converted into more general industry and the shipbuilding capacity eroded, both physical capacity but also competence in procurement, planning, budgeting and technology In addition, the age of the fleet in the Canadian navy and coastguard rose. Many vessels are taken out of service and not being replaced, other 40+ and 50+ years old vessels are keopt in operations in an expensive and little efficient way The Canadian Government had to act on both these challenges, and the National Shipbuilding Strategy has gained a wide support across political blocks .
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National Shipbuilding Procurement Strategy
After almost 2 decades of inactivity, Federal Government launched new process to procure ships Royal Canadian Navy Canadian Coast Guard From 2000, no planned procurement proceeded to contract Government budgeting process Difficulties in agreeing on requirements Budget vs shipyard costs Design issues Government restarted the Mid Shore Patrol Vessel program 3 times. Contract resulted from 3rd go around
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The National Shipbuilding Strategy – what is it
Combat vessel Arctic/Offshore Patrol Ships AOPS Canadian Surface Combatant Non-combat vessel packages Offshore Oceanographic Science Vessel Offshore Fisheries Science Vessel Polar Icebreaker Joint Support Ship Three parts Large ships – two (three) selected yards Small ships – open for competition Repair, maintenance and refit The strategy is a multi departmental approach established in close partnership with key marine industry stakeholders With a year horizon and a total aquisition value of over CAD 38 billions A large portion of the program consist of the CSC – Canadian Surface Combatant Lockheed Martin Canada awareded the design contract and being built at Irving Shipyard in Halifax, Nova Scotia Recently announced (but not shown) moving forward is also the ordering 18 vessels for the coastguard with a cost of 15,7 bill CAD (= 100 mrd NOK) But the program is not only about large ships. Also the government will proceed through a competitive process with the design of a new class of smaller ships, the Mid-Shore Multi-Mission Ship, which will complement the work of the large fleet in shallow areas and deliver mid-shore science activities. Ongoing and planned acquisitions In 2018 a total of CAD 247 mill was awarded to the large shipyards, CAD 92 mill to new small ships and CAD 1,4 billion in new or amended repair, refit and maintenance contracts But it is estimated that only a smaller portion of this will consist of Canadian designed, developed and built (ref: ACADA CSC Data Base Report –Final page 6)
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Planned aquisitions
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Arctic Offshore Patrol Ships
Status: First of class-HMCS Harry DeWolfe. Ship floated out in 2018, with delivery and sea trials in Fitting out continues Construction underway on ships 2 and 3 Up to 18 vessels will in addition be adapted for the Coast Guard
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Offshore Fisheries Science Vessel
Status: Project behind schedule OFSV #1 –Sir John Franklin launched in Dec 17 Assembly of OFSV#2 well underway Module construction of OFSV#3 underway
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Offshore Oceanographic Science Vessel
Status: Contract for long lead items awarded in 2016 Build contract expected in 2019 Delivery will be delayed until after completion of first JSS
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Joint Support Ships Status: Design and engineering contract awarded
Delivery of 1stship scheduled for Seaspan authorized to begin construction of some modules in 2018
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Polar Icebreaker Status: Contract design phase completed
Expect design engineering contract in 2019 Build contract scheduled for 2021 Ship to be completed in 2023, but schedule now under review due to JSS changes
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Canadian Surface Combatant
Status: Oct 2018, Government announced that Lockheed Martin Canada with BAE Type 26 design selected as preferred bidder Contract announced 8 February 19 Once project definition phase completed, a construction contract will be awarded. Possibly by late Government will try to compress this phase to minimize possibility of build gap at ISI Delivery of first ship planned for 2025
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Opportunities for Norwegian suppliers
Technology gaps. Studies show that as little as 15 % of the technology can be purchased locally Technical, quality, schedule and budget issues revealed Open for business policy, but still focus on Canadian content Local partners and networks available
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Technology gaps identified 1/4
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Technology gaps identified 2/4
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Technology gaps identified 3/4
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Technology gaps identified 4/4
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Doing business in Atlantic Canada
Irving Shipbuilding and Lockheed Martin will have very large ITB obligations under the programs Three potential paths for Norwegian companies: Establish subsidiary in Atlantic Canada. Very simple process but requires investment Establish relationship with existing company in Atlantic Canada and transfer technology through a Joint Venture or partnership Bid directly to ISI and/or LMC.
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Industrial and Technological Benefits packages developed to ensure procurements going forward are better leveraged to create jobs and economic growth in Canada.
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Challenges Structure and speed in procurement processes is different from what we know from Norway The business ecosystem in Canada, despite many similarities, is different than the Norwegian. Need to learn trends and key drivers to be able to navigate and fully succeed Local presence is strongly recommended. Canada prefer to buy from Canada if they can
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Innovation Norway planned activities
Next steps Innovation Norway planned activities November 2019 meeting program meeting key players in the sector at Maritime Arctic Security and Safety conference Fall 2020 – Norwegian pavilion at DEFSEC, Halifax - the largest maritime defence show/conference in Canada (tentative) 2020 – Global Growth – a market introduction program for Norwegian SME’s (tentative)
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