IHC cuts away home facilities

Despite 2013 figures showing a revenue of €985m (almost €100m up on the previous year) the company says it’s now been forced to slash European employment following the huge drop in the oil price which leaves its shipbuilding arm uncomfortably exposed. While an original ‘2020’ plan was in place to halve the number of Dutch slipways from four to two over the next five years, the whole agenda is now much more brutal as it’s being pushed forward to take place this year.

“IHC intends to terminate the employment of 487 of its employees. Simultaneously, a large percentage of the flexible workforce (a total of 1,127 employees), will be phased out. The aim is to achieve the targeted reduction by the end of 2015,” said the company.

The company described the situation as “challenging” and added: “IHC will have to realise substantial cost reductions and increase its competitiveness to ensure a stable and economically sound business in the future.”

So IHC intends to achieve this by moving toward cheaper overseas shipbuilding capacity, although whether it buys this or continues to rent it hasn’t decided yet.

CEO Bram Roelse has said in an interview with Dutch financial paper FD that while the oil price issues have forced these cost cutting changes, the company also needs to get physically closer to its largely non-European customer base and hinted that it will help the company comply with local content directives as “countries increasingly require local businesses be involved in the construction of a ship” he explained.

Ironically the departure of the huge slice of contractors, while not exactly unexpected, accompanies the finalisation of a specialist pipelay ship which Brazil couldn’t manage itself, despite similar directives. Sapura Esmeralda was the sixth and final vessel of the series and the only one to be built by OSX in Brazil while the rest, including the recently launched Sapura Rubi, were successfully built in IHC’s Netherlands yards. However, difficulties in the OSX yard meant it was transferred to Dutch IHC facilities where it’s nearing completion: now the PLSV is about to be transferred back to OSX Brazil for the final commissioning prior to Petrobras picking it up in 2016.

The redundancy news is hitting the local Dutch community hard, and though local businesses are mustering resources in order to re-employ the dislocated – albeit skilled – workforce, it won’t necessarily be that easy: “I am shocked by the scale of the measures and the enormous consequences for the employees from the six Drechtsteden municipalities and especially from Alblasserdam and Sliedrecht,” Dordrecht Mayor Arno Brok told press.

By Stevie Knight