Pomerania, true to its heritage as a bustling port city and important member of the Hanseatic league, has a rich and diversified maritime economy and is fast emerging as a global competence hub for the offshore sector. Though it has no natural oil or gas fields, Pomerania is a valued supplier of equipment and services for the global offshore industry. The Baltic Sea offers also an extremely profitable resource of the future: wind. Offshore wind farms are the ‘new offshore’ developing in Pomerania alongside the traditional offshore oil and gas industry.
The old and new offshore
After a period of wind-down in the 90s and early 2000, when the whole Polish maritime industry was shrinking, the industry is now clearly catching wind in its sails. The number of people employed in the sector in 2018 was one of the highest in the 21st century with close to 37,5 thousand employees, this along with a huge demand for special purpose ships and highly specialised engineering services is fuelling the growth of the ‘new offshore’ sector.
“Our biggest strength is that we have survived, even though there were ups and downs in the maritime sector in the last couple of years”, says Jerzy Czuczman , the Chairman of the newly established Polish Maritime Technology Forum. “If you look at the current turnover of the sector, it’s steadily growing. The latest statistical data show that 2018 was the best year ever registered in the history of the sector. And despite the volatile situation in the market, we are still on the upward curve.”
He distinguishes three distinctive areas of the Polish maritime technology sector. “First are companies supervised by the Polish administration, the second one is Remontowa Holding – the largest shipbuilding capital group in Poland – and all the rest, including CRIST shipyard, the biggest new building yard, are private companies that together contribute to over 70% of the total sector’s income.”
This big private segment has had very limited or no representation until recently – until the Polish Maritime Technology Forum was established, bringing together close to fifty members as of now. “Among our members there are seven shipbuilding yards, ten design offices, supporting members, such as the Pomeranian Special Economic Zone, Polish Register of Shipping, as well as universities, educational centres and maritime media”, Mr Czuczman says. “We also have a number of system and equipment providers specialised in the field within the areas of automation, electric control, or hydraulics control or drive and interior outfitting. It’s probably the fastest growing professional institution in Poland”, he proudly adds.
Wind from the Baltic
While Europe is no longer producing typical cargo ships (as this production has moved to the Far East, China and Korea), Poland has found its new place in the European supply chain for specialised niche products. 2018 saw a substantial increase in the number of orders for various specialised offshore vessels, such as arctic expedition or fishing vessels and is implementing innovative solutions at the junction of forefront space and maritime technologies.
“Here in Gdynia, you can see big steel sections ready to be shipped. These huge sections, weighing tonnes go mainly to Germany, France and Finland, where mega cruisers are produced at an average price of one billion EUR per cruiser, with a total of over 60 billion EUR worth of orders for cruisers in Europe”, explains Jerzy Czuczman. “These floating cities cannot be produced in one location only.”
Components for such cruisers and other specialised vessels are built in the local shipyards – GSG Towers, Mostostal, Vistal, CRIST, Nauta or Remontowa. These are among the largest European producers of maritime and offshore equipment supplying to clients in the Nordics, Germany, France, Belgium and beyond the European Union.
“Prospects for construction of new drilling platforms and expansion of the existing ones are shaky”, says Marek Bąk, Business Development Director at Mostostal Pomorze. “But there are new opportunities in the offshore wind sector. Poland is one of the European tigers, let’s not shy away from this term, and should seize the opportunity”, he comments.
Mostostal Pomorze SA is a leading supplier for the major engineering and construction contractors in the global petrochemical and oil-processing industry, but has now added offshore projects to their portfolio, primarily for the Scandinavian market. Mr Bąk is sure that the wind energy is not a passing fad. The European Union has proven to be very serious about the Green Deal and eliminating CO2 from the atmosphere, and the renewable energy sector will continue to be a huge business opportunity.
Mostostal is not the only company betting on and preparing for these opportunities, as Europe is setting itself ambitious goals of moving away from conventional energy to achieve zero greenhouse gas emission by 2050. Other traditional offshore sector suppliers are also adjusting their offer to match the future green energy market.
As the ongoing crisis in the market for extraction of crude oil and natural gas started in 2016, there has been a significant decline in the world orders for vessels servicing this sector. But the development of hydro and wind energy technologies have created opportunities for shipyards like CRIST to enter new markets.
Initially, CRIST focused on the construction and repair of ships, steel structures, fishing vessels and hulls of ro-ro vessels. Purchasing land from the former Gdynia Shipyard in 2009 opened a new chapter for the company. Well-equipped production area of over 28 hectares makes it now possible to process up to 50 thousand tons of steel per year. The yard has vast production resources, including a dry dock for final assembly of floating objects, as well as a gantry crane, capable of lifting some of the heaviest loads in the world and one of the largest on the coast of the Baltic Sea.
“From our perspective, the development of the offshore sector in Pomerania is closely related to the offshore wind energy development program in the coming years,” says Tomasz Wrzask, PR & Marketing Manager at CRIST S.A.. “Polish companies can already provide components worth 40-50% of the total investment. In a few years, up to 80-90% of components can be produced in Poland, and most of them in either Pomerania or West Pomerania.”
Let’s just take a look at the Heavy Lift Jack-Up vessels, like INNOVATION or VOLE AU VENT (ex. Vidar) – state-of-the-art and technically sophisticated ships dedicated for building and servicing offshore wind farms. Built for foreign clients at CRIST in Gdynia, designed by StoGda Ship Design & Engineering from Gdańsk, they are examples of a successful symbiotic collaboration between companies in the region. Much of the local production for the offshore sector is the fruit of such collaborative efforts between producers and designers.
“We are a design valley for various maritime projects for the whole Europe and beyond. There are over 1500 engineers working for design offices in Poland on international projects for all over Europe”, says Jerzy Czuczman. What he means is unique for the sector here, is the designers’ close ties to the local shipyards, which makes them well versed in production realities and valuable partners for the industry.
“The local design offices, production plants and shipyards are collaborating on a variety of projects for the offshore sector”, says Tomasz Świątkowski, Chairman of the Board at StoGda. “They are all well-established and have a strong position on the European market. I cannot imagine companies with such potential like StoGda and others in the region, not taking part in the development of the Polish offshore wind farms.”
With a combined 25 years of experience, StoGda’s portfolio now includes a wide array of offshore projects, ranging from wave power plants, tidal power plants, fish farms, drilling platforms, jack-up vessels up to the eight-legged barge whose job was to build a sea motorway along the coast of La Reunion island. At the same time, the company is modernizing and adapting the existing jack-up vessels for work on the emerging wind farms, while it is also preparing new design concepts for the construction of offshore wind farms in Poland.
On the design and research front, there are more companies that are also diversifying their portfolio as they are eyeing new opportunities in offshore wind.
A research and design centre with over 45 years of experience in maritime technologies, CTO now concentrates on services dedicated to the offshore sector. Design of floating units or ocean engineering structures require a lot of specialist analyses and simulations to ensure safety in all weather conditions at sea. This includes numerical analysis and experimental model tests. CTO offers this and a wide spectrum of other services for offshore facilities, such as platforms, wind turbines, offshore vessels and wind farm installation units.
Baltec Marine is also listening to the market. They started off as an interior outfitting company for the mega cruise ships, gradually entering new waters and greener technologies, such as installation of ballast water or exhaust purification systems, quickly becoming one of the leading companies on the market with a portfolio of nearly 250 such projects on approximately 120 units. As they faced a growing demand for offshore services, they diversified their offer and are now preparing for their first installations of exhaust scrubbers on drilling platforms and systems for catalytic reduction of nitrogen oxides on servicing ships, says Baltec Marine’s Sales Manager, Piotr Zabrocki.
If relevant regulations are adopted in the coming years, we’ll see new opportunities opening up for the Pomeranian companies in the offshore sector. The development potential is huge, but without support from foreign investors it may not be fully realised.
Janusz Kutkowski from SEACON Engineering, another design office located in Gdańsk, agrees. “We see favourable winds for the offshore wind power in Pomerania”, he says. The company specializes in detailed engineering design of various types of vessels and is now getting ready to extend their offer in the near future to include vessels dedicated for the offshore sector, such as ships servicing wind farms and oil platforms, or cable laying vessels. “Looking at the prospects, we see many opportunities for growth in the offshore sector in Pomerania. In my opinion, this is mainly thanks to the highly qualified specialists who are able to meet the challenges of today’s market.”
“Poland is an exciting market for the offshore wind industry”, Tomasz Wrzask is also confident about the prospects. “Foreign investors can expect dynamic development over the next five to seven years,” he predicts.
It’s definitely worth keeping an eye on the Pomerania’s new and traditional offshore sector, as the region builds on its historic DNA and pushes boundaries like never before.
If you want to know more about investment opportunities in Pomerania’s offshore sector, contact us at Invest in Pomerania. We are a regional promotional agency that helps investors at every stage of their projects.