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The international online conference “Russia – Finland: Prospects and Development of International Cooperation in the Field of Shipbuilding” was held on May 26.

06/14/2021

The international online conference “Russia – Finland: Prospects and Development of International Cooperation in the Field of Shipbuilding” was held on May 26.

The event was held by the organiser of the NEVA International Exhibition with the assistance of the Ministry of Industry and Trade of the Russian Federation (Minpromtorg Russia), the Trade Representation of the Russian Federation in Finland, the St. Petersburg Export Support Centre and the Finnish Maritime Association. The conference was facilitated by the linguistic-support partner EGO Translating SB.

Among the experts invited to speak at the event were Russia’s trade representative in Finland, representatives of industry associations and members of the scientific community, as well as shipbuilders and equipment manufacturers from the two countries. Conference participants learned about the latest innovative advancements made by Russian and Finnish developers and had the opportunity to share their experience with their fellow colleagues.

Finland ranks 14th in Russia’s trade turnover and is one of the country’s major partners in terms of icebreaker-building and Arctic development. Against the backdrop of the general decline in world trade prompted by the COVID-19 pandemic, the trade turnover of Russia and Finland dropped by 26 % in 2020 compared to 2019, dipping to USD 10 bln. Russian exports to Finland contracted by 29 % to USD 7.1 bln, while Russian imports from Finland slid by almost 17 % to USD 2.9 bln. Exports of ships, boats and floating structures collapsed by 93 % (from USD 26.4 to 1.9 mln), as imports shrank by 49 % from USD 20.7 to 10.6 mln.
In value terms, however, the Russian shipbuilding market rose by 67 % in 2020 to the level of RUB 230 bln. The total tonnage of the country’s newly-commissioned fleet saw significant growth (of 59 %, to 542K tons). For the second year in a row, the total value of commercial vessels exceeded that of national defence procurements – RUB 126 bln (55 %) versus

RUB 103 bln (45 %), respectively. Icebreakers accounted for over 40 % of the total value of newly-commissioned ships. In particular, the Baltic Shipyard – part of the United Shipbuilding Corporation – completed construction of the lead nuclear-powered icebreaker “Arktika”
(60 MW), while Admiralty Shipyards (also part of USC) delivered the diesel-electric icebreaker “Viktor Chernomyrdin” (25 MW) to Rosmorport. The Zvezda Shipbuilding Complex delivered the Aframax lead tanker “Vladimir Monomakh” (114K tons deadweight) to Rosnefteflot.

In terms of newly-commissioned vessels, commercial shipbuilding is currently led by dry-cargo ships, barges and special service-fleet vessels. By 2030, large-tonnage shipbuilding and shipbuilding for the commercial fishing and icebreaking fleets are expected to emerge as particularly promising fields. Minpromtorg’s long-range plan through 2035 calls for the construction of more than 1,000 different types of vessels.
Meanwhile, cooperation with Finland is progressing well.

In January 2021, the Finnish company Wartsilä won a contract for the delivery of radio and navigation systems for 10 ice-breaking tankers being built for the carriage of liquid natural gas within the scope of the Arctic LNG 2 project. The LNG tankers will shuttle between the Yamal Peninsula and the main ports of the European Union. Installation of the equipment is slated for 2022-2024.

On 1st February 2021, the Finnish Agency for Development of the Kotka-Hamina Region – Cursor Oy, in conjunction with the operator of the Vyborg Seaport – Port Logistic LLC and the sole cruise-/ferry-service operator at St. Petersburg’s marine terminals – Passenger Port of St. Petersburg “Marine Facade” began implementing a project envisioning the organisation of a new cruise service operating along the Kotka – Vyborg – St. Petersburg route. The project will provide shipbuilders with an additional opportunity – and the impetus – to come up with cutting-edge cruise-liners with a focus on passenger comfort.

The Finnish company Nordec Nautic is planning to start cooperating with Russia’s leading yacht dealer – Smart Yachts. By leveraging this partnership, Nordec Nautic intends to expand its product range in the preowned motorboat, cabin-cruiser and yacht category while attracting new customers from Russia.
The Russian-made aluminium VBoats have emerged among the top-three most sought-after brands on the Finnish small-watercraft market. Since last year, Finland has seen a surge in motorboat sales. In 2020, sales of this type of watercraft increased by 33 %, while growth in the first quarter of this year has already reached 30 %. In addition, the sales volume of spare parts and components for such boats has climbed by almost 50 %. Finnish distributors are interested in the purchase and further sale of higher-end boats, representing an excellent opportunity for Russian manufacturers to boost their exports.

In today’s market environment, the most promising avenues for international partnership are production cooperation, best-practice sharing and the localisation of Finnish companies on the Russian market – particularly in light of the stricter localisation requirements being imposed on shipbuilding by the Government of the Russian Federation.

The mutual interest of Russia and Finland is being drawn by issues concerning the development of the Arctic and the advancement of icebreaker-building. Both countries boast profound expertise and an impressive track-record in these two fields. Their cooperation within the scope of the Arctic Council is moving forward.
“Our countries are strategic partners with significant potential for the ramping-up of cooperation in the shipbuilding of icebreakers, specialised icebreaking vessels and environmentally-friendly ships that run on natural gas, as well as in the production of emission-treatment systems and R&D in the field of Arctic shipbuilding,” remarked Sergei Sinelnikov, Russia’s Trade Representative in Finland. As an example of such productive cooperation, he cited the projects being implemented with the participation of the Helsinki Shipyard, which specialises in the construction of various types of ice-class vessels – icebreakers, supply ships, tankers, etc. In different years, projects have been successfully completed for Norilsk Nickel, Sovcomflot and other Russian customers. An innovative LNG-powered icebreaker (21 MW) was christened in 2016. In 2019, construction wrapped up on a tanker for the carriage of gas condensate for the Yamal LNG project. In 2019-2020, the Helsinki Shipyard won a contract for three ice-class expedition vessels – their construction is expected to conclude in 2021-2022.

A key role in bilateral cooperation is being played by Aker Arctic, an engineering centre specialising in the development and modelling of next-generation Arctic vessels. Since 2006, orders from Russian energy companies have resulted in the construction of over 40 various-purpose vessels based on Aker Arctic designs.
Aker Arctic’s Regional Manager in Russia, Alexey Dudal, discussed the most ambitious projects that have been implemented thus far. Together with Novatek and DMSE, the engineering centre developed a second-generation Arctic LNG tanker for year-round navigation of the Northern Sea Route. It stands out for its elevated speed navigating ice and its ability to operate in narrow channels in tandem with icebreakers, made possible by the unique shape of its hull.

In conjunction with Atomenergo, the centre pitched two concepts for a semi-submersible Arctic-transport vessel (the Arc5 and Arc7 class, with a cargo-carrying capacity of 70K tons) to Atomenergomash. The specially-designed hull allows for manoeuvrability in the narrow channels opened by 60-series icebreakers. The possibility of the vessel operating as an LNG-powered ship was considered separately. Special attention was paid to the ballasting system in order to ensure the vessel’s safe operation.

In light of extensive discussions concerning the prospects for container service through the Northern Sea Route, Aker Arctic developed a concept for a container-ship with a carrying capacity of 8,000 TEU featuring reduced fuel consumption and the satisfaction of all applicable environmental-protection regulations.

In 2020, a new design was unveiled for a removable self-propelled bow for operation in Lake Saimaa. It’s distinct from the other bows traditionally employed navigating the inland waterways of the Russian Federation and the United States precisely in that it’s self-propelled. It was designed by the Finnish company ILS, while Aker Arctic supplied two 600 MW shaft lines for the bow and ice-class bronze propellers for the push-tug.
Aker Arctic also pays special attention to the energy-efficiency of the vessels it designs, particularly given the heightened regulations governing the environmental-friendliness of marine navigation. To this end, it’s producing systems for the treatment of emissions, employing cutting-edge shipboard power plant technologies, optimising hull designs and testing a range of different fuels: nuclear power, LNG, methanol, ammonia, hydrogen and storage batteries – the choice depends on the infrastructure of the given basin and the particulars of the vessels’ future operation.

Moreover, the centre is pursuing the optimisation of ice navigation and developing special software that would enable the real-time analysis of ice charts and their correlation with a vessel’s icebreaking capability so as to improve upon the performance of Arctic operations.

“Finnish researchers are leading the pack in the development of technologies for the optimisation of a vessel’s route through ice,” underscored Petr Zvyagin, Head of the Research Laboratory. “Ice Engineering Research Fundamentals” at Peter the Great St. Petersburg Polytechnic University. “Our Finnish colleagues have progressed to the practical implementation of an existing model that charts a route factoring in multi-objective optimisation. The widest-possible range of criteria are being taken into consideration: time expenditures, distance and fuel consumption, as well as the risks of vessel damage and nipping. In 2016, Russian researchers applied this concept to ice routing. The cutting-edge advancement was executed at the Polytechnic University. It’s based on the principle of generating a spatiotemporal representation of the accessible part of a body of water using a three-dimensional graph. The result is the construction of Pareto-optimal routes. In this way, Finnish and Russian researchers have made significant progress in ice navigation. Moving forward, such models will also have to factor in the dynamics of ice formations. The prototype of the model was developed by Russian researchers.”

Professor Vladimir Tryaskin, Head of the Department for the Design and Technical Operation of Ships at St. Petersburg SMTU (State Marine Technical University), added that as the model is refined, it will be important to take the vessel’s structural integrity into account.

Pentti Kujala, Professor of Marine Technology at Aalto University, confirmed the significance of the joint research, adding that the insufficiency of satellite ice readings will cause dynamic instruments to become increasingly sought-after. For its part, Aalto University – established following the amalgamation of three technical colleges in 2010 – is actively engaged in the study of Arctic navigation and the pursuit of international cooperation; for example, it has already laid solid groundwork with Canada and Germany and is currently striving to work out a partnership with its Russian colleagues.

Mikko Niini, Chairman of the Finnish Maritime Association, also expressed interest in pursuing cooperation with Russian shipyards. He delivered an overview of shipbuilding in Finland and discussed major projects involving the construction of ice-class vessels, tankers and nuclear-powered icebreakers. He spoke in greater detail about the innovative solutions helping ships to navigate Arctic waters, and about the industry’s recent experience using new types of fuel, next-generation storage batteries and hybrid shipboard power plants that run on a combination of electricity and natural gas. The Association is interested in the latest Russian advancements and stands ready to expand its business ties.

Valentin Nakhodkin, Head of the Marketing and Sales Department at the United Shipbuilding Corporation (USC), also spoke in favour of the strengthening of cooperation with Finnish enterprises. USC is Russia’s largest shipbuilding company. It encompasses roughly 40 industry enterprises and organisations: the country’s major shipbuilding and ship-repair yards, as well as its leading design-and-engineering bureaus. The bulk of Russia’s domestic shipbuilding complex is currently consolidated within the scope of USC, and the corporation is open to working on new projects – including cooperation with its Finnish colleagues.

The session devoted to opportunities for export-import cooperation featured remarks by: Jevgeni Beljanin – Board Member at the Turku Repair Yard, Mika Laurilehto – Vice President for Sales at Rauma Marine Constructions, Vesa Klen – Sales Director at Craftmer, Dmitry Rootsi – General Director of Regent Baltica, Alexander Troitsky – General Director of Nonius Engineering, and Jevgeni Dubintsov-Weisman – Commercial Director at Vessel Propulsion Systems LLC.

The last session focused on a discussion of Russian-Finnish cooperation in the area of yachting and boatbuilding. Anastasia Kobzeva, Head of the RUSBOAT Centre for Russian Boatbuilders, called on her Finnish partners to pay close attention to opportunities for the localisation of production in Russia in light of its import-substitution strategy. Among the more export-oriented Russian products she highlighted hovercraft, hydrofoils and small aluminium-/steel-framed watercraft.

Jarkko Pajusalo, CEO of the Finnish Marine Industries Federation FINNBOAT, noted that Russia ranks among the top-10 countries where Finland exports its motorboats. The top-5 are as follows: Mexico, Poland, Great Britain, the USA and Sweden. In 2020, 853 motorboats totalling EUR 11 mln were exported to Russia, while 78 boats totalling EUR 800K were imported from Russia. The Association is banking on further growth in trade turnover.

Summarising the results of the event, conference moderator Prof. Kirill Rojdestvensky – Head of the International Cooperation Department at St. Petersburg SMTU (State Marine Technical University), gave the discussion high marks. It was an exceedingly interesting dialogue that advanced the strengthening of business ties and the charting of a course towards the expansion of further cooperation between Russia and Finland in the field of commercial shipbuilding.

The event was part of the programme of international marine online conferences held from November 2020 through May 2021 by NEVA-International Ltd, organiser of the NEVA Exhibition & Conference, in cooperation with industry alliances and associations and with the support of Minpromtorg Russia and the Ministry of Foreign Affairs of the Russian Federation.

A video recording of the conference and related materials can be found here.

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