Optimism and Growth

Pictured with John Wood is Arun Raman, Group Chief Finance Officer at Harland & Wolff.

Harland & Wolff has been on a journey over the past two years. Its Group CEO, John Wood, talks to Emma Deighan about the business’ Northern Ireland activity, including plans to safeguard UK gas supplies and being an instrumental vessel for our transition from natural gas to hydrogen.

In 2021, Harland & Wol , which formerly traded under the name InfraStrata, strengthened its acquisition prowess by adding another shipyard and two fabrication sites to its existing portfolio.

It’s a move that sees it become an even bigger player in five key markets in the UK: defence, cruise and ferry, commercial, renewables, and energy, holding 52% of the total UK marine fabrication footprint.

The company’s role here has been prominent since it acquired the Harland & Wolff shipyard in Belfast back in 2019 and in recent months, its proposed underground gas storage project, located in Islandmagee, was awarded a Marine Construction Licence, giving it the green light to proceed towards construction.

That means the company is now poised to bring even more jobs to NI and put the province in focus for more than just shipbuilding under the Harland & Wolff banner.

Reflecting on the past three years, John begins: “I think it’s been a unique time. Back when we last spoke in 2020, there was a calm before the storm across a number of different markets but now they’re starting to bounce back from Covid.”

He describes the business’ activity over the past few years as an “upgrade and reactivation stage” and he’s in high spirits as he anticipates a buoyancy around the shipyard business when the government unveils its highly anticipated National Shipbuilding Strategy refresh.

The strategy is being released in a bid to “galvanise and promote the UK’s shipbuilding enterprise”.

“We have confidence that the shipbuilding and fabrication business will deliver substantial value to all our

stakeholders as we enter this exciting new stage of building our multiyear backlog of projects,” John continues.

He says the firm’s takeover of Harland & Wolff has breathed new life into NI’s reputation for shipbuilding, “putting Belfast back on the map again”.

Its Belfast yard is one of two shipbuilding yards in the company’s foursite portfolio. As one of Europe’s largest heavy engineering facilities, Harland & Wolff (Belfast) boasts deep-water access, two of Europe’s largest drydocks, ample quayside and vast fabrication halls. Whilst, as a result of the acquisition of Harland & Wolff (Appledore) in August 2020, the company has been able to capitalise on opportunities at both ends of the ship-repair and shipbuilding markets.

In February 2021, the company acquired the assets of two Scottish-based yards along the east and west coasts. Now known as Harland & Wolff (Methil) and Harland & Wolff (Arnish), these facilities focus on fabrication work within the renewable, energy and defence sectors.

Harland & Wolff has the brawn to offer ferry and shipping firms everything from fabrication and construction, repair and maintenance, and technical services to conversion and decommissioning.

“All the yards are fairly busy and in Belfast, we welcomed one of the largest vessels yet – the Dorset Spirit – last year,” says John.

That ship arrived from Canada measuring over 279 metres in length, making it the first time since the acquisition of the assets that a vessel of this size entered the building dock.

“That was the first LNG tanker to dock in a UK shipyard. Recently we had three cruise ships sat alongside each other in the shipyard. It’s a really busy season with the ferry work too and it’s also the first time the cruise line Carnival has been in the UK.

“The drydock in Belfast is now full for the first half of the year and we’re looking at a strong second half. There’s real momentum,” he continues.

Despite an uplift in shipbuilding and revamps, the industry is still burdened by material cost rises, with steel in particular jumping from £800 per ton to almost £1400 per ton, John reveals.

“You have to take every challenge and work through it,” John asserts. “You have to keep your business model flexible, and the quotation must reflect those costs.”

Flexibility is the backbone of Harland & Wolff’s business model and with five markets covered, including the fastevolving renewable and energy divisions, plenty of opportunities lie ahead.

One of its most exciting projects is the Islandmagee Energy gas storage project, which will initially unlock seven muchneeded gas storage caverns, John says.

Islandmagee Energy is a wholly owned subsidiary of Harland & Wolff Group Holdings plc.

Once constructed and fully operational, these gas caverns will hold around 500 million cubic metres of natural gas and provide security of supply during peak demand for up to 60 days for Northern Ireland.

The UK has one of Europe’s lowest gas storage capacities at just 1% of its annual demand in storage, leaving it much less resilient to supply issues than other European countries which hold as much as 20-30% of annual demand in storage. When fully developed, the Islandmagee gas storage project will hold over 25% of the UK’s storage capacity.

“When you look at the extraordinary increased volatility in the cost of gas, this facility will give the country the ability to flex. It will mean not having to buy on the spot market.

“Instead, we can use the storage and help prevent things like the risk of power outages. There are no other facilities like this in the UK,” John says.

At present, the scheme is facing challenges from opposing groups including No Gas Caverns and Friends of the Earth Northern Ireland which have jointly launched legal proceedings against Northern Ireland’s Department of Agriculture, Environment and Rural Affairs (DAERA) over plans.

“This project went through planning many years ago and I believe that was the stage to protest, to object to the planning. This is a project needed by Northern Ireland. It is needed for the economy, it is needed to create jobs, it is needed for the transition to net zero and it will add value every day to residents,” John says.

He adds the gas storage facility has the capacity to create 400 direct jobs and 1,600 indirect jobs during the construction phase with 60 direct and 180 roles during its proposed 40 years of operation and it has the potential to play a role in our conversion to greener energy.

“The project is a real transition project, and we see it transitioning to hydrogen over the next decade.”

Add the latter employment potential to Harland & Wolff shipyard’s existing 200 staff and an influx of apprentices, the business has scope to be a growing employer here.

“We’re continuing to ramp up our apprenticeship intake. We now have 31 on the course, with an age range from 17 to 38. It’s been a great success and offers on-the-job training, one-to-one mentoring and really allows them to get stuck in,” John explains.

“We are hoping to get up to 100 new apprentices next year.”

It’s not bad going given the business’ NI arm has only really experienced four months of clear trading since John’s firm took hold of the reins.

“On 5 December 2019, we got the keys. We’re now a couple of years on from that and we’ve really only had four months of Covid-free trading. The pandemic has certainly been a struggle, but we’re now beginning to deliver economic value back into the communities we work in. We’re very optimistic.”

“We have confidence that the shipbuilding and fabrication business will deliver substantial value to all our stakeholders as we enter this exciting new stage of building our multiyear backlog of projects.”