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Harland & Wolff’s new Spanish owner, Navantia, will invest £100mn to reactivate the UK shipbuilder and deliver a key Royal Navy contract while pushing for new orders that will “determine the future of the company”.
Donato Martínez, Navantia’s director of strategy, said on Wednesday the state-owned group aimed to triple H&W’s workforce and invest a further £100mn-£200mn in the coming years, a measure of its long-term commitment to the bankrupt company best known for building the Titanic.
Navantia this week took over H&W’s four shipyards — in Belfast, Appledore in England and two in Scotland — after pushing the UK government to improve the terms of its £1.6bn contract to build three Fleet Solid Support vessels for the Royal Navy.
Neither Navantia nor the UK government said how big the increase was, with Jonathan Reynolds, the UK’s business secretary, insisting only the “absolute minimum of changes to the contract to ensure its continued delivery” were agreed.
“We have not finalised the amendment to the FSS contract [with the UK Ministry of Defence], which is required because obviously the original plan cannot be met with the situation [at H&W],” Martínez told the Financial Times after a ceremony in Belfast to mark the new ownership. He expected that to happen in the next month.
Martínez said he was already eyeing future Royal Navy orders. “Yes, [we can make a profit on FSS], I think we have the basis and the investment,” he said. “The challenge now is to run as fast as we can.”
He added that Navantia would put in the first £100mn of capex over two years across the four yards, with the bulk being spent in Belfast. Work on an expanded and automated fabrication hall in Belfast has been paralysed since July, when the company’s financial crisis came to a head and a restructuring expert was brought in to find a buyer.
Martínez said that investment would be followed by “a second lap . . . in five years’ time” of £100mn to £200mn. “There is a long-term commitment.”
H&W has 1,015 staff including 560 in Belfast, which has not built a ship since 2003. Martínez said H&W, which was taken over by Navantia UK but has no plans to drop the famous name, needs 1,500 workers.
While the initial focus is on the FSS contract — which industry figures believe is now at least a year behind schedule — Navantia has its sights on Royal Navy’s multi-role support ships (MRSS).
Martínez said: “The MRSS is a programme that is really important to capture. It’s going to determine the future of the company . . . We are focused to get as many contracts as possible, including MRSS . . . We are determined to get them.”
The FSS ships, which Martínez said would have some design changes, are due to be built in parts in Navantia’s yard in Cádiz in southern Spain and at Appledore before being assembled and launched in Belfast. Construction had been due to begin in 2025; Martínez said Appledore would begin cutting steel for the project this year.
The UK government has hailed Navantia’s rescue of H&W as a boost for the UK shipbuilding industry but some suppliers fear they will be squeezed out and that some work will move to Spain, where Navantia has spare capacity.
Martínez confirmed Navantia, which has spent more than £20mn since October paying salaries and keeping the yards open, would not pay debts outstanding to contractors for past work but hoped for good relations, noting “we need them as much as they need us”.
He said Navantia aimed to seek a partner to “co-invest’ in Methil, one of the Scottish yards, which will focus on offshore wind projects.
Despite H&W’s choppy history, Martínez was undaunted by the challenge ahead given Spain’s centuries-old maritime tradition.
“We’ve been doing this business for only 400 years,” he said. “I don’t see any reason not to keep doing [it] for another 400 . . . We are very stubborn.”
