Ferry exports to EU via US

Europe Business Review, March, 2000

Australian fast-ferry technology exported to Europe from the United States - that is one prospect of a bold overseas venture by Austal Ships.

The Fremantle-based exporter of high-tech ferries is investing in the US to get around protectionist American laws which discriminate against foreign built ships.

Austal, the world's largest builder of high-speed ferries, has signed a joint venture agreement to manufacture in the US with Bender Shipbuilding of Mobile, Alabama, as its partner. The majority equity will be held by the Australian company in a 70/30 ratio. Austal's initial investment will be around A$10 million.

Currently US laws (primarily the Jones Act and the Passenger Vessel Services Act) generally prohibit foreign-built vessels from operating on American domestic routes.

Over 3600 vessels are active in the US passenger vessel industry, carrying nearly 200 million passengers each year. The potential US market for Austal is huge, and ferry exports from the US to EU also look viable.

"Austal's lead in technology, design and production of high-performance aluminium vessels will revolutionise building of lightweight, high-speed ships in the US," says Austal chairman John Rothwell.

Austal is the largest builder of aluminium-hull vessels in the world, with a range extending from 24-metre fast ferries to massive vehicle and people carriers beyond 100 metres.

Typically, Austal's top vehicle-passenger ferries are some 20 metres longer than a jumbo jet and can carry 1000 passengers and 200 cars at highway speeds.

The main product range will be built at the Austal-Bender yard in the US. Austal aims for a significant share of the US passenger ferry market by offering its sophisticated Australian-designed vessels now barred from the US.

Austal is also seeking opportunities to supply the US Defence Department which wants fast freighters but is prevented by US law from importing them.

In addition to US orders, opportunities to export to EU, and Asia, will be sought. Training of American personnel in specialised skills will take place at Austal's Western Australian shipyard.

Established in 1988, Austal Ships has built or has on order over 75 vessels for Europe and Asia.

Austal's product range includes vehicle-passenger ferries, cruise vessels, offshore support and patrol craft. Its Oceanfast division builds luxury motor yachts.

Bender, in operation for 75 years, is a reputable US builder of high-quality, small conventional craft.

The use of fast, lightweight freighters is being investigated by the US Department of Defence which needs cargo and personnel-carrying vessels able to travel at 40 knots or more in coastal and ocean waters. Austal has a long record of building such craft.

Austal listed on the Australian Stock Exchange in 1998 and now employs over 1600 people at its WA shipyards. It posted a record turnover in 1998-99 of $207 million and has a strong order book through 2000.

Austal's subsidiary, Oceanfast, received the two most prestigious awards at the 1999 International Superyacht Society Awards in Fort Lauderdale, US, for its uniquely-powered, 55-metre, mega-yacht "Thunder", (twin diesels and a gas turbine engine).

MV "Thunder" (see Europe Business Review, October 1999) was designed by Jon Bannenberg, the London-based Australian creator of luxury vessels for Oceanfast and other super-yacht builders in Germany, Italy and Britain.

Oceanfast is currently building in Fremantle a 55-metre motor yacht of aluminium and composite materials for a European buyer for delivery in July 2000. The client may bring it from Fremantle to Sydney as his base during the Olympics there in September.

Austal's rival, Incat of Tasmania - between them the two Australian companies dominate the world fast-ferry market - recently made another major delivery in Europe.

Ordered by the leading ferry operator in Spain's Canary Islands, the $50 million "Bentayga Express" was constructed in Hobart for service between Santa Cruz de Tenerife and Agaete, on the island of Gran Canaria.

The "Bentayga Express" can carry 900 passengers and 260 cars at speeds up to 40 knots (65 kmph). It joins another Incat 96-metre catamaran already on the inter-island route, the "Bonanza Express".

The Spanish ferry operator, Olsen SA, plans to introduce a third Incat 96-metre vessel into Canary Island service later in 2000.

Death of a magic horse

Norway is investigating the tragic sinking of an Australian-built ferry - but there is no suggestion that the vessel itself was at fault.

Austal Ships of Fremantle, which delivered the 42-metre catamaran "Sleipner" [*] to the HSD Line last August, has been monitoring events since the ferry went down in the North Sea on the night of 26 November last with the loss of 16 lives.

The ferry ran aground and sank in a winter gale on the 120 nautical-mile route between Stavanger and Bergen on the rugged south-west coast of Norway while carrying 77 passengers and 8 crew. The location is 350 kms west of the capital, Oslo. The ferry was capable of carrying 358 passengers.