Turbulent times for Damen Naval: Director CS&I Richard Keulen explains

Defence and naval construction have been in the news frequently in recent months. And Damen Naval has had its share of media attention too. In this interview, Director of Corporate Strategy & Innovation Richard Keulen explains the significance of all this news and what is on the horizon for Damen Naval.

War is being waged in Ukraine and Gaza. Russia and China pose an increasing threat to Europe. And US presidential candidate Donald Trump has warned that if re-elected he will refuse to defend NATO countries that do not abide by agreements made on defence spending. With this in mind, many countries, especially those in the EU, are increasing their defence budgets.

“In the past decades, there was almost nothing in the news about our armed forces and we as Damen Naval had to look for good and valued customers in countries like Indonesia, Mexico and Nigeria,” Richard says. “Now we see Europe making moves with regards to investments in defence. For the first time in years, the Netherlands also wants to realise new-build projects for the restoration of its Royal Navy fleet, and they want to realise them as quickly as possible. Across the board for the Dutch Ministry of Defence, there are some 200 projects, larger and smaller, in the pipeline for the entire armed forces. These include everything from new tanks to communication systems and IT solutions, and from gas masks and uniforms to new frigates.”

So now that more money is being freed up, there is also room to realise major equipment programmes. “For this, the Ministry of Defence very deliberately decides on European collaborations: Scania trucks from Sweden, helicopters from France, light vehicles from Germany,” Richard explains. And the first major naval project is being undertaken within the Netherlands itself: the Anti-Submarine Warfare Frigates (ASWF) for both the Royal Netherlands and Belgian Navies. “That is a unique contract. Never before have two NATO member states jointly commissioned an identically complex frigate.”

The ASWF project has had a long preliminary process and Damen Naval became involved only at a later stage. Richard sees that new projects are under more time pressure now that the Ministry of Defence needs to strengthen itself quickly in an increasingly insecure world. This leads to Damen Naval, as a naval builder, being involved in projects at an earlier stage, which is a potential advantage for both the client and Damen Naval. “The Ministry of Defence has indicated that they are looking for strategic cooperation for these kinds of large projects and Damen Naval is fortunately already in the spotlight because of the CSS and ASWF projects. Both projects have had a steep learning curve, so both parties now see the value of working together on these kinds of upcoming projects as early as possible.”

Following the publication of the A-briefs, COMMIT and Damen Naval signed a letter of intent in May to act jointly on future naval construction projects at the earliest possible stage. Richard: “We desperately need each other’s technical knowledge and production management capabilities. By working together at an earlier stage, you can benefit from shared knowledge and teams.”

June was the month of the submarine dossier. On 3 June was the debate on the award of the order to the French Naval Group and out of that came a number of important motions for the Dutch maritime manufacturing industry. The motion to postpone the decision on the submarine award until the new cabinet was in place unfortunately did not get a majority. But other motions brought better news. The Lower House supported the proposal not to put an upcoming order for new surface ships out to tender, but to award it directly to the Dutch naval construction sector including Damen. Further motions received support calling for the “acceleration of maritime projects with attention to the economic importance of Zeeland” and for the “recalibration of the Dutch defence industry.”

The submarine dossier also highlighted one of the major problems in naval shipbuilding: the uneven playing field, not only globally, but precisely also within the EU, between commercial companies like Damen and those receiving state aid. “A new world order is emerging with more and assertive competitors; and we see Turkish, Chinese, Korean, and Russian shipbuilders offering their ships for export and being seen as acceptable partners in many countries due to the lower prices offered. This new competition is a big challenge for us,” Richard explains. “There is also an uneven playing field within Europe. But in that situation, we do commit to cooperation, such as in Germany, where in F126 we amply include German partners and suppliers.”

The uneven playing field is one of the reasons why Damen Naval very consciously chose Customer Intimacy as one of its guiding principles during the Time for Change restructuring process. “We focus primarily on the Dutch customer, from which cooperation with EU and NATO customers can emerge. This is already underway with the German and Belgian clients,” Richard says. “Vlissingen is the cradle of Dutch naval construction, and we welcome the close cooperation with the Ministry of Defence for upcoming projects.”

Richard concludes with the advice to above all keep following the media. “So much is being written about us at the moment that it is almost impossible to keep up. But we will inform you about the most important things via Intranet and announcements. Above all, keep reading the papers from time to time and if you have any questions, you can always ask.”