Offshore Patrol Vessels – SEA 1180 PHASE 1: CIVMEC SUPPLIES FIRST OPV STEEL TO ASC SHIPBUILDING

Offshore Patrol Vessels SEA 1180 PHASE 1:  CIVMEC SUPPLIES FIRST OPV STEEL TO ASC SHIPBUILDING   Geoff Slocombe  //  Henderson, West Australia APDR had a face-to-face interview at Henderson on 26 September with Civmec’s entrepreneurial executive chairman, Jim Fitzgerald, just seven days before Prime Minister Scott Morrison visited their Henderson facility and was photographed cutting OPV steel. APDR established with confidence Civmec will supply cut to profile and formed steel on schedule for the first OPV. APDR’s first question at the interview was “What is the current status of supplying steel for the first OPV construction to start in November 2018 at Osborne?”  Jim Fitzgerald immediately replied “We have already had steel delivered from Bluescope for forming, and we are currently preparing it here now.”  The small piece of profiled steel Prime Minister Morrison was photographed holding at Civmec on 3rd October was cut from this first delivery. A Defence spokesperson has confirmed to APDR that: “The SEA 1180 project is currently on schedule and on budget. Construction of the first Offshore Patrol Vessel (OPV) is on track to commence mid-November 2018 at the Osborne Naval Shipyard in South Australia. Keel laying for OPV 1 is scheduled to occur in February 2019.” For those who are not familiar with Civmec, it is an integrated multi-disciplinary heavy engineering and construction provider to the metals and minerals, oil and gas, infrastructure, water and energy, as well as marine and defence markets. As an example of its capabilities, Civmec was contracted to provide and erect all the steelwork package along with supply and installation of precast concrete components for the new Optus sports stadium in Perth. This is a multi-purpose venue, completed in 2017 and officially opened in February 2018, which seats 60,000 people in AFL mode. It also hosts cricket, rugby league and union, football (soccer) and entertainment events. Headquartered in Henderson WA on their 200,000 square metre block at the Australian Marine Complex, Civmec has regional offices in Broome (Western Australia), Darwin (Northern Territory), Newcastle and Sydney (New South Wales), and Gladstone (Queensland). Civmec’s current order book is in excess of $800 million. Jim Fitzgerald told the author “When it came down to the OPVs, we had all the skills and all the tools at Henderson, so we felt confident we could do a good job.” CIVMEC AND THEIR NAVAL SHIPBUILDING CAPABILITY APDR has been reporting on Civmec’s increasing focus on naval shipbuilding and sustainment since the author met dynamic and charming Jim Fitzgerald at the 2015 Submarine Conference in Adelaide. In 2016 we learned that Civmec had welded a section of submarine pressure hull to demonstrate their ability to take part in Australia’s Future Submarine program. The pressure hull section now stands proudly outside Civmec’s head office as a testament to the welding skills exhibited by expert personnel in their workshops. Jim Fitzgerald told the author during the recent interview that: “A lot of our office staff can play two roles, both here and out at projects all round Australia. What we learned during the oil and gas boom, all the apprentices we took on and all their welding skills they acquired, was that it made welding the submarine pressure hull possible – it was nothing to us – as we are working to those standards every day.” In 2016 Civmec acquired Forgacs, a Newcastle company which had been contracted in 2009 to build blocks for Australia’s Hobart Class destroyers, and from 2002 providing hull modules for ANZAC class frigates. Forgacs had acquired Carrington Slipways in 1997, where in 1980 HMAS Tobruk was built and launched. APDR had maintained regular contact with ex-RAN Commodore Mike Deeks CSC, who had been managing director since 2015 of Forgacs Marine and Defence before, in April 2018, the WA Government announced Commodore Deeks as its next London-based Agent General. Today Forgacs Marine and Defence is integrated into Civmec and stands ready to deliver naval vessel build, maintenance and support. The company offers ship construction for export. They have the knowledge and capability to deliver vessels such as ferries, fishing vessels, landing craft and barges, supply boats, tugs and work boats, patrol boats, commercial and leisure craft. At Henderson, the new ship assembly hall is under construction. The 53,000 square metre (gross floor area), 70-metre high, purpose-built facility will be one of the largest single undercover modularisation, repair and maintenance facilities in Australia. It will be able to house complete Air Warfare Destroyers, frigates and offshore patrol vessels, for construction or maintenance. It introduces a national shipbuilding capacity substantially greater than anything that currently exists. The facility will significantly enable Western Australian participation in the Federal Government’s extensive naval shipbuilding and sustainment program. Designed to be one of the most efficient and innovative in the world, the new facility will be a significant piece of industrial infrastructure, adding a new world-class resource to the Australian maritime landscape. Civmec’s Jim Fitzgerald has said: “At times like this, it’s important to stop and reflect on the company’s achievements. I would like to take this opportunity to thank everyone who has contributed to the company for their support and encouragement which has helped to get us to this significant moment. This facility will create employment for numerous generations to come. It will be a hub for training and innovation and will be a home-grown leader in the future of modern heavy engineering. It’s a facility that West Australians, and indeed all Australians, can be proud of.” THE OPV CONTRACT WITH LUERSSEN Luerssen Australia awarded Civmec a contract in April 2018 to supply and process steel for all 12 OPVs, based on the company’s Darussalam-class offshore patrol vessels for Brunei. ASC Shipbuilding – which is about to be acquired by BAE Systems – will build the first two vessels at Osborne before Civmec in 2020 commences fabrication and construction activities for the following ten vessels. Consolidation of the ten vessels will be undertaken in Civmec’s new world-class shipbuilding facility, which is currently under construction. During his recent visit Prime Minister Morrison was photographed bolting together some of this building’s structural steel. Luerssen Australia currently have a small team of staff on site at Henderson, but this number will grow as they take responsibility for the fit-out of materials and systems that they are supplying. In May 2018 the Board of Directors of Civmec Limited and its subsidiaries, advised that together with Luerssen Australia they had agreed to form a new company called Australian Maritime Shipbuilding and Export Group (AMSEG), which will combine Civmec’s steel manufacturing capability and infrastructure with the shipbuilding and design expertise of Luerssen, to develop a new world class sovereign shipbuilding capability, based in Henderson, Western Australia. Initially the intention is that AMSEG will serve as a subcontractor to Luerssen Australia in the delivery of the SEA1180 OPV program. The terms and conditions of the existing contract that Civmec has already been awarded for work on the OPV program will remain the same but AMSEG will manage other scopes of work not already awarded. The outcome of the formation of AMSEG will be that Civmec will ultimately perform a larger scope of work on the OPV program. Using the SEA1180 contract as a catalyst, AMSEG will invest in skills and transfer of knowledge to local subcontractors and suppliers, contributing to building a competitive Australian shipbuilding industry and supply chain that can export to the global naval market. The new company has established a highly experienced management team, being chaired by former Chief of the Royal Australian Navy and former chairman of major shipbuilder ASC Shipbuilding, Vice Admiral (ret) Chris Ritchie. Jim Fitzgerald has said: “This is a huge step forward for Australia’s shipbuilding industry. It is an exciting development that will fully underpin the development of the new state-of-the-art shipbuilding facility at Civmec’s Henderson headquarters.” AMSEG is 49% owned by Civmec and 51% owned by Luerssen Australia. The OPV work program will be very important to Civmec’s Henderson operations for years to come. During the Prime Minister’s October visit Pat Tallon, Civmec’s CEO, said: “We are extremely pleased to be involved in the OPV program. Today represents an important step in our long-term commitment to further support the establishment of a competitive Australian shipbuilding industry and supply chain that can export to the global market.” EXPORT PROSPECTS FOR AUSTRALIAN OPVS? During APDR’s interview, discussion turned to future naval shipbuilding work for Civmec. Jim Fitzgerald said that they will continue to bid for other naval or civil shipbuilding projects while constructing the OPVs. Specifically, when asked about export opportunities for the Australian OPVs he explained “Luerssen are in the market all the time so they are the ones who will find the export opportunities.” Other companies with a keen interest in the Australian OPV program include Saab who are supplying the Situational Awareness System (based around the 9LV combat system) for the vessels and L3 Communications Australia is supplying the integrated communications and navigation suite, together with Penske who are supplying the diesel engines. Luerssen Australia are close to the final stages of negotiations for the suppliers of the weapon system, which will almost certainly be a 40mm Bofors 57 MK3 self-protection gun, plus .50 Machine Guns. The OPVs will also be able to host a range of unmanned vehicles for air, surface and sub-surface roles.   In the same way that the Royal Brunei Navy have four Luerssen OPV 80s, Chile and Colombia have also acquired seven vessels between them. It seems to APDR that there will be export opportunities for these OPVs, but whether or not they will all be constructed in Australia is uncertain. Possibly just the lead vessel for each order, before construction moves to the new customer’s own shipyards?  QUALITY CONTROL When Civmec started originally, they set up a database, and required everyone who subsequently joined them to became familiar on how to work with it. Jim Fitzgerald told APDR: “Everything with this project is to be done to government specifications. We have to supply the materials with full traceability so when we hand over materials we can give full details of the source, when it was cut, who worked on it, right down to the time of day when the operation was conducted. “We have our Civtrac system, a Civmec-developed, web-based fully integrated business management system. Civtrac manages all aspects of project delivery including document control, project reporting and quality compliance. It allows for “live” project data to be recorded and communicated. Civtrac is used to provide our customers with opportunities to improve the outcome of their project, via a remote login where they can see the project’s progress and tracking in real-time. “We manage every aspect of the project lifecycle with data captured throughout all phases of project delivery from fabrication to on-site installation providing our customers with transparency across their entire project from material control to delivery, increased productivity through multi-disciplinary service offering, and the implementation of innovative, best practice solutions. “This information is easily measured and utilised for the benefit of the project. Civtrac also allows for material traceability, reports on current procedures along with manufacturing data reports, ensuring all elements of project quality deliverables are met.”  THE NEXT STEPS As the interview neared its end, the discussion turned to the duration of the OPV consolidation at Henderson, which will launch OPVs there until 2030.  APDR asked “Is there any prospect of a ‘Valley of Death’ as experienced at Osborne as the air warfare destroyer was winding down.” His response was: “In business you are always worried about that. The difference here is that we have businesses covering a number of market sectors. If one is down, quite often another one will be up, rather like the cylinders in a car. I have never seen all sectors down in our business. We expect that if shipbuilding does quieten down, for whatever reason, there will still be work for our people in other sectors of our business.” Asked if Luerssen had brought any of their overseas prospects to visit Civmec, Jim Fitzgerald replied “No we haven’t, and we don’t want that. We are concentrating on getting each step with the OPV project absolutely right, before there is any question of reference selling to Luerssen’s prospective OPV customers.” APDR’s conclusion from this interview with Jim Fitzgerald and other sources is that the OPV project is in good hands, particularly as far as Civmec is concerned. We will continue to report on their progress.