Interview with Richard Keulen, Director Naval Sales Support, Damen Schelde Naval Shipbuilding (DSNS).
ESD: Now that the Dutch Government has identified a number of projects to modernise the Royal Netherlands Navy (RNLN) fleet, your company has moved into the spotlight. DSNS is also a strong European player. Could you give us some insight into DSNS’ situation today?
DSNS: Since the Dutch fleet is ageing, we are now seeing programmes to replace frigates, MCM vessels (MCM – Mine Counter Measures) and submarines. There is also a programme for a new logistic supply vessel to be commissioned in 2023.
First, let’s have a look at the Dutch Naval Cluster which is a group of companies around a so-called OEM (Original Equipment Manufacturer) capability and which is well established in Europe. Essentially, the Netherlands has a full-fledged industry cluster that can develop complex ships from a clean sheet of paper up to the very ends of operation, maintenance and midlife updating.
DSNS constitutes the OEM capability of that cluster. Formerly called Royal Schelde, DSNS has built ships for the RNLN since the 1870s. It is a very old company, and in the last decades we have developed very successful launching customer projects; we have initiated innovative projects for the RNLN offering room for improvement, new developments, future-oriented weapons and sensors and so forth. This allows us to turn these novelties into successful export items which in return strengthen and maintain our naval cluster.
In 2000, Royal Schelde was taken over by the Damen Shipyards Group which is the largest shipbuilder in the Netherlands and a global player, with more than 12,000 employees at 35 facilities worldwide. Damen Shipyards Group has a wide portfolio, ranging from more civilian-based security solutions like OPVs (Offshore Patrol Vessels) to tug boats, pilot vessels and cruise vessels. By acquiring DSNS, Damen added an entire naval portfolio to its capabilities, ranging from military OPVs, high speed patrol vessels to full-fledged air defence frigates, amphibious units and supply ships. DSNS is responsible for development, engineering, building, integration and delivery of naval ships to its navy customers. All in all, we can offer the entire naval portfolio, ranging from the lower end like water police vessels all the way up to heavy combatants. In addition, we have strong Dutch partners like RH Marine, a partner we engage often with in platform automation. We also contract other European partners, e.g. for effectors. But basically, in the Netherlands we have all the expertise needed to develop complex naval projects. This is why the cluster is of strategic importance for the Netherlands.
Currently, we are involved in a Dutch programme which is an addition to the Joint Support Ship. The Netherlands has a worldwide operating blue ocean fleet, heavy frigates, heavy amphibs, and two replenishment ships. Due to budget cuts and retiring of vessels, we ended up for a very short time with no logistic support vessels at all and the joint support ship HNLMS KAREL DOORMAN, the latest unit provided to the RNLN, now executes replenishment at sea tasks.
The KAREL DOORMAN has three main functions: underway replenishment, strategic transport and supporting amphibious or littoral operations. Thus, she has various tasks and cannot be restricted to replenishment. As in many other countries, the budget of the Dutch MoD has grown, which is why an additional dedicated support ship can be commissioned, and we are now proposing an engineering solution and a design for that ship to the MoD; we will be contracted to build that ship, HNLMS DEN HELDER.
ESD: The Netherlands has embarked on an important cooperation programme with Belgium for frigates and MCMV. What is the current status and what constitutes the basis for this cooperative effort?
DSNS: The cooperation between Belgium and the Netherlands is a good example of how medium-sized nations in Europe can successfully cooperate in procurement. I think this cooperation is worth being noticed in Europe because it is lean, efficient and focused on identical requirements. The Netherlands and Belgium have signed a joint collective agreement on the provision of frigates and MCMVs with a joint Letter of Intent and two MoUs. This very close and strategic cooperation pattern is called “Belgisch-Nederlandse samenwerking” (Belgian-Dutch cooperation – BENESAM). It has been in existence for more than forty years and reaches into every vein of our navies. But it does not only mean identical material; we have the same M frigates, also built by Damen, we have the same
MCMVs, and we also share training, logistics, operation and apprentice training. For example, the knowledge base of Dutch and Belgian MCM forces is brought together at the Eguermin Mine Action School (Ecole de Guerre des Mines) in Ostend, Belgium. This is also where Belgium’s NATO Centre of Excellence for MCM is.
Now both nations have decided to replace their MCMVs and frigates. Belgium is in charge of the MCMV project, while the Netherlands is responsible for the frigate programme of both nations. It will start shortly after the MCM programme and the delivery of the units will commence at about the same time. We expect further steps in the months ahead.
The frigate programme provides for the joint replacement of the four M Class frigates by two frigates for Belgium and two for the Netherlands. As an OEM in the Netherlands, we are able to offer all types of high-end frigates and work directly with the Dutch Naval Cluster and the customer to arrive at a so-called project definition. Once in the lead, we will go for an engineering solution in close cooperation with the Dutch Defence Materiel Organisation as the customer. This will enable us to build these four ships.
As expressed in the Letter of Intent and the Memoranda of Understanding, Belgium will follow the Netherlands. This model of a launching customer project is vital for us as it provides both future-proof and innovative solutions to our domestic customer, the Royal Netherlands Navy, but it also offers us the means to turn these innovations into export lines. As a private company we survive by exporting our products; we do not get government support like some of our competitors. This is why we need to have the best project when it comes to lean production, efficient pricing and other contractual issues. Such export lines frequently tend to develop from such launching customer projects. There are several examples, one being the air-defence and command frigate of the DE ZEVEN PROVINCIËN Class developed under a similar launching customer set up. Once provided to the Navy, we were able to turn that high-end ship into a lighter export family of ships, the so-called SIGMA series.
Now we are about to deliver the tenth SIGMA series ship, this time to Mexico. Based on that launching customer idea, we have been able to export to a number of navies without the support of the Government. This is how our Naval Cluster survives and this is why this set-up is so important to us.
So, when it comes to the M frigate, we are looking at four frigates in total. A so-called “A-letter”, a report from our Government to Parliament gives the rough outline of these frigates; they are multi-purpose frigates with a focus on anti-submarine warfare (ASW). They should also feature new forms of propulsion and new weapon systems like high-energy weapons. We expect the specific requirements to come out in the next six to nine months.
ESD: What about submarines?
DSNS: When it comes to submarines, the Netherlands has four unique WALRUS class boats in service. It is important to understand why we are in this programme. The WALRUS class is an ocean-going submarine design, and the four boats will undergo an extensive midlife update in the Netherlands. The WALRUS submarine is designed to support expeditionary operations which are important within the NATO framework. In fact, they might become even more important in the near future. Up until recently, we thought that maritime developments were more headed toward the littorals, but now developments in Russia, China, and India lead us back to the blue water domain. This is why the expeditionary aspect is still important. Secondly, because of that midlife update we have retained considerable submarine expertise; I would say that 80% of the expertise is still in the Netherlands.
And finally, as with the frigates, the submarine project will be designed as a launching customer project to allow for the generation of export potential.
Are we competing with Norway and Germany? I think they are just another ball game. For good reasons, these two nations have focused the operational concept of their cooperation on submarines with a more littoral alignment. According to our market analysis, we consider it necessary to offer a more expedition-oriented alternative. This is why we work exclusively with SAAB Kockums from Sweden and for three reasons:
First, because of their COLLINS class programme for the RAN. SAAB Kockums has a similar expedition-oriented focus and knowledge of the operational concept of the Dutch submarine service; they have a larger submarine sailing around in Australia with blue-water tasking.
Secondly, it is very important for us to keep our OEM cluster alive. Our self-sustainable innovative cluster works very well; we are lean, we are quick and, given the limited budgets of our own navy, for example, we can provide in-budget solutions. If we want to maintain the capabilities, we need to find a balanced partner. Thus, we are looking to cooperate with a medium-sized nation that has a similar approach, and Sweden has an impressive OEM base; just look at its car production, or other military activities such as submarines, armoured vehicles, or even fighters. Sweden is a real engineering powerhouse. When it comes to size and relations, SAAB Kockums fits very well into the Dutch naval cluster, and they offer us deep and integrative cooperation. That’s why we will cooperate exclusively with SAAB Kockums; we will not only build the boat together but will also design it, engineer it, procure and manage it together – a real 50:50 deal.
SAAB Kockums will bring in the skills that we lack. At the moment, they are using this knowledge in support of two current programmes: Firstly, in the midlife update of the GOTLAND, which is a big de-risker and is really going well, and secondly, in the construction of the most modern diesel-electric submarine in Europe, the A-26.
As a team, we both can gather knowledge from these programmes in a risk-controlled manner: we are integrating the new developments into our own common design for the Netherlands MoD. That is why SAAB Kockums is a very important partner. We need development, we need intellectual property on knowledge and on design; this is how we can survive in exports.
And finally, SAAB Kockums as the designer and DSNS as the co-designer are complementary knowledge-wise when it comes to procurement, management, design and engineering. When it comes to building and operational project management and integration, we will act as the builder and SAAB will act as the co-builder. It is a perfectly balanced cooperation, with a lot of Dutch content, which allows us to develop the knowledge and the capability to sustain the boat over its entire lifecycle in the Netherlands. This strategic capability will make our Navy and the Defence Materiel Organisation completely independent. This is why cooperating with SAAB is so important and we hope we can explain this to the Dutch Government.
The Government is currently examining all offers in response to the so-called market monitoring and we expect it to decide in the coming months what to do next. Will they continue with all parties or select some? Much has been rumoured, but nothing is official.
ESD: At IndoDefence 2018, a tri service defence exposition in Jakarta, Indonesia, Damen presented the new 6,000 tonnes class OMEGA frigate design. What are the characteristics of this project?
DSNS: Generally, when looking at the OMEGA design, we see a growing demand for slightly larger frigates offering more modularity, more growth potential to add extra systems, for example, unmanned systems and which offer capabilities which might relate to new effectors like high-energy weapons, or new sensors, with a reduced radar cross-section, and so on. We feel that it is time for a larger concept that offers more opportunities to integrate the next generation of effectors, radars and technology. We see the demand from left and right, for example, from South America where some nations consider larger frigates than those they currently have in service. Many nations still operate the earlier 1980s and 1990s frigates which at that time did not exceed 3,000 tonnes. To improve seaworthiness, sustainability and other factors, many navies are now looking for larger platforms. So, this could be the solution.
ESD: The MKS180 is an important project for the German Navy. What is your share?
DSNS: Firstly, the German Government has called for an open European tender, and of course we can offer the German Government a future-proof frigate. As a trustworthy partner in Europe, we are responding to BAAINBw’s very extensive requirements profile in order to offer the German Ministry of Defence the optimal frigate, if required. This programme requires a maximum of German content and we achieve this in all areas of competence, as already mentioned. This is very important to understand, because some people reject our offer as a Dutch offer, although it is not. With Blohm&Voss, owned by Lürssen, we have a strong partner who has many suppliers in Germany, which allows us to realise this programme as a German programme. Our participation is actually quite limited. Not only is the entire construction carried out on the premises of Blohm&Voss, we also involve our German partners in the engineering, procurement, etc. We will carry out this project together and in genuine cooperation. That is very important! The project is as German as possible, as we fully understand that the extensive funds that Germany provides for the realisation of this project for the German Navy should also strengthen the German naval cluster. And that is convenient for us because that is how we operate.
ESD: Thank you for the interview.
The interview was conducted by Hans Uwe Mergener.