Finstaship

Source: Exec Digital UK

Date :11/15/2007 5:08:32 AM

A focus on efficiency

Esko Mustamaki, Finstaship’s President, talks openly about how the company continues to develop its operations, implementing efficiency measures that will lay a platform for future success

Finstaship is a specialised shipping company offering icebreaking services, offshore services, fairway and marine construction, ferry traffic and ship management services. A global success, both Finnish and international customers can depend on Finstaship’s expertise when carrying out demanding offshore operations that require special skills and powerful vessels.

“The world-famous Botnica, Nordica and Fennica, which are unique multipurpose icebreaking vessels, are well-equipped and suited to demanding offshore tasks,” says Esko Mustamaki, President of Finstaship. “They also ensure the smooth operation of Finnish shipping, while our ferry services help passengers reach their destination.”

Breaking the ice

Finland’s ports and surrounding areas freeze each year, to varying extents, and to ensure international trade continues without interruption, Finstaship offers a comprehensive icebreaking service. These services form a large part of the company’s operations.

In its current form, icebreaking along the Finnish coastline dates back to 1890. Finstaship, with the world’s greatest icebreaking expertise and a wealth of experience, carries on these traditions with an extremely powerful fleet.

“Our fleet comprises three multipurpose icebreakers and five conventional icebreakers,” explains Esko. “Our icebreaking capability is a combination of modern vessels and experienced professionals.

“Finland’s icebreaking services industry was opened up to competition in 2006, but there are still some challenges to overcome. The market is not as developed as we would like. Despite these difficulties, competition in the field is sure to appear. The fact remains though that we are still currently the only shipping enterprise to provide comprehensive icebreaking services in Finnish waters with its own icebreakers. But this will change.”

Finstaship’s icebreaking services are extensive and include assistance, towing, securing vessel traffic safety, and traffic control for vessels proceeding in icy conditions. Other essential support services include co-operation with port authorities, charterers, the VTS (Vehicle Traffic Service) and pilots. The northern region of the Baltic Sea is the main market area for this sector of Finstaship’s services.

Great performer

This year is Finstaship’s fourth year as a state-owned enterprise after it was demerged from the Finnish Maritime Administration (FMA) in 2004. “We are developing all of our services in order to meet the challenges of the market,” comments Esko. “We are improving all the time, and are financially sound.” Indeed, Finstaship’s contract portfolio at the end of 2006 was approximately €100 million and it is continuing to strengthen its position within primary markets, while discovering new areas of business for a brighter future. “Our long term goal is to become better at what we do,” he adds.

Finstaship’s turnover continues to rise; however, profitability has not developed accordingly. As a result, the company has sharpened the focus of its “Full ahead for 2007!” development programme, the aim of which is to significantly improve cost-efficiency. “By reducing cost we improve profitability,” Esko states. Furthermore, the long-term goals of the scheme include achieving the same level of personnel costs as for Finnish vessels operating in foreign traffic, which is a challenge for Finstaship: “Reducing numbers is difficult, as our crew is first class.

However, we believe we could do better and are focused on becoming more efficient.”

Although the company is currently reducing its crew, the future will bring with it a need to find new, competent and highly skilled personnel.

The market across Europe is aging and the offshore industry is not seen as a desirable destination for the younger generation of today. Therefore, work will need to be done to find people and make the industry more attractive in order to ensure this vital sector continues to run effectively. Esko is aware of this issue and is keen for the company to set out plans to overcome this challenge in the coming years: “We have only just started the “Full ahead for 2007” campaign, but we are aware that we are in an aging industry and will look to address that in the future.”

Finstaship is performing well, especially compared to previous years. The company’s visionary approach and flexibility, as well as a booming offshore sector are seen as contributory factors in this. “I must admit the offshore sector is very strong, with endless opportunity, and our multipurpose vessels have been able to capitalise on that. Without this trend however, our performance would have been very different and I suppose in that respect we have been fortunate,” explains Esko.

Last year, Finstaship entered into a three year contract with Shell that further strengthened its position and reputation as arctic navigators.

It has engaged two multipurpose icebreakers, Finstaship’s Fennica as well as Trans Viking Icebreaking & Offshore AS’ Tor Viking, which is part of Shell’s project on the Alaskan northern coastline.

As a result of the ice conditions in the region, it is considered one of the most difficult areas to navigate in the world, so powerful vessels will be needed. “Our vessels are some of only vessels in the world capable of performing the tasks Shell wants. We believe that this unique combination of offshore and icebreaking services will prove popular and are excited by this market, which we think will be a growth area in the next five to six years.”

Visionaries

In the long term, Finstaship is ambitious to upgrade its fleet, replacing its less powerful and aging members. The company is hoping to add a number of new multipurpose vessels to its portfolio; however, such grand schemes take much planning, especially when you examine the current state of the shipbuilding industry. “We have to plan very carefully,” says Esko. “The shipbuilding sector is experiencing problems in the form of overcrowded order books – we all know that. Therefore any new commission will not be ready until 2012, so we must tread carefully.

“I would particularly like to replace our conventional icebreakers,” he continues. “The vessels are only used during a relatively short period, in some cases only a couple of weeks, so I would like to replace these with ships capable of operating in the offshore sector for the rest of the season. That’s the long term goal.”

With thoughts on what is almost certainly an exciting future, he concludes: “We will achieve considerable success in the future if we stick to our objectives. Watch this space!

“Finstaship’s offshore activities are set to rise over the next few years, especially overseas. We are therefore considering setting up an independent offshore company in the future. Although there many ambitious plans, Finstaship will still continue to provide an even better quality of service.”