July 8 - Royal Boskalis Westminster (Boskalis) is making good on its prediction in March and has announced that it will go ahead with plans to retire ships and make wholesale redundancies across the company.
The company, which owns Dockwise, says it has completed a fleet rationalisation study announced earlier this year, that was initiated in light of deteriorating market conditions and an expected prolonged period of low energy and commodity prices.
Based on the results of the study it has been decided to take 24 vessels out of service in the coming two years, which will result in the loss of approximately 650 jobs worldwide during this period.
Peter Berdowski, CEO Boskalis: "The market outlook for Boskalis has changed drastically as a result of continuing low energy and commodity prices. The volume of work in the market has fallen sharply and this is putting pressure on the utilisation rate of our vessels. Because we expect these market conditions to persist in the coming years it is essential that we adapt the size and composition of our fleet to this new reality. We are fully aware that this intended decision is drastic and that it will have a major social impact. While we will try to absorb the work force reduction through attrition and redeployment wherever possible, compulsory redundancies unfortunately look to be unavoidable. A reduction of the number of vessels and jobs is however necessary to ensure that Boskalis remains healthy going forward."
With the completion of the study the decision has been made to take 24 vessels out of service in the 2016-2018 period, ten within the Dredging division and 14 at the Offshore Energy division, including heavy transport vessels.
HLPFI understands that the fleet rationalisation will be implemented through the scrapping, sale and lay-up of vessels. The average age of the vessels earmarked for scrapping or sale is in excess of 30 years, says the company.
The company stated that the fleet rationalisation has no implications for Boskalis' strategy, which is aimed at benefitting from key macroeconomic factors that drive worldwide demand in its markets: expansion of the global economy, increase in energy consumption, global population growth and the challenges associated with climate change.
In March, Boskalis said it was expecting a substantially lower profit for 2016 amid increasing uncertainty in the market.