Like many other Finnish shipyards and companies with project operations in Finland, Rauma Marine Constructions has had to face some difficult realities. The pandemic forced the shipyard to close down for weeks and prevented workers from coming in from abroad. The pandemic also disrupted global logistics by causing supply chain issues and delays. On the other hand, due to the war in Ukraine, inflation is soaring.
Rauma shipyard has agreed on ship orders at a fixed price. Construction work spans several years. Our current agreements have been made before any of the events of the past few years. It is evident that the orders are now becoming unprofitable with all the delays and cost overruns.
The Finnish government has understood the strategic importance of the shipyard and is ready to ensure that shipbuilding expertise remains in Finland. The government has supported the continuation of the shipyard’s operations significantly by granting it an equity subordinated loan.
Rauma shipyard has also taken a long look in the mirror. The company was once re-established on the ruins of the unlucky STX Finland. We have chosen to base our operations on a strong commitment to our network of subcontractors. The shipyard focuses on core competencies: project management, building the ships’ hull and assembly work. RMC works with a comprehensive network of subcontractors – our network partners.
Furthermore, major changes have been made in the shipyard’s management team. Mika Heiskanen, who has earned his qualifications in Turku shipyard’s management, has been appointed as the new CEO. The new Chairman of the Board Stig Gustavson is a notable figure in the Finnish industry sector with decades of experience at the helm of industrial companies.
“The financial performance of Rauma shipyard for this year will not be an easy read. The new management team is faced with a difficult task: they must turn the ship around and steer it in a direction where the shipyard can make a profit. Although RMC’s strategy has been proven correct, its execution – or “float-out” as we say in shipbuilding – is still widely incomplete”, Gustavson says.
RMC’s new management must begin their work from a challenging starting point. The Board of Directors has set up a six-month plan during which the company must show clear indicators of the new direction.
The board has created a framework for development. According to the outline, the construction of military and other government vessels will be assigned to RMC Defence, a subsidiary of RMC. A CEO will be appointed for RMC Defence. The board will continue to emphasise the strengthening of procurement and developing partner networks. The board also requires that the company’s organisational structure and allocation of financial responsibilities are clarified and implemented.
“The transformation process has begun, and it will be monitored closely. A thorough evaluation will be conducted after six months, in late March 2023. The board is fully assured that CEO Heiskanen will commit to his task on a 24/7 basis”, Gustavson says.