More opportunities for North offshore industry

Mar 13 2007 By Dr Tony Trapp, The Journal

Swan Hunter's closure is more bad news for North-East shipbuilding, but marine engineering can still thrive, argues Dr Tony Trapp.

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Dr Tony Trapp, managing director of Riding Mill-based The Engineering Business, set up the company, with three other Newcastle University engineering graduates 10 years ago.

The company first specialised in the design and build of equipment for the submarine telecommunications industry, principally to lay cables on the seabed. Initially it prospered, riding on the back of the huge demand for band width generated by the world's booming IT and telecommunications industries.

This, in turn, fuelled the demand for more and more miles of fibre-optic cables to be laid on the world's sea beds.

However, when the dot.com bubble burst in 2001, it was soon realised that there was a massive overcapacity of cable and The Engineering Business was left with contracts to supply equipment for new-build cable laying ships which nobody wanted.

The business survived these challenging times, but with a determination that, in future, it would never again be so dependent on one market, but would operate in at least three.

Now the £16m annual turnover company, which employs over 100 people, works in offshore renewables, oil and gas and marine defence.

It has been so successful in these areas that Dr Trapp is convinced that if the North-East fully exploited these markets, it could bring a new and exciting lease of life for the shipyards and engineering facilities of the Tyne and Tees.

"Offshore wind energy has huge potential," says Dr Trapp. "Even though the wind is intermittent, there's an unlimited amount of it, and it could potentially make a significant contribution to our energy needs." Last year The Engineering Business designed and built the Beatrice Offshore Wind Turbine Installation System (BOWTIS) to install the first 5-megawatt turbine at the Beatrice Offshore Windfarm Demonstrator Project in the North Sea.

The company also designs and builds equipment to lay equipment on the seabed for the oil and gas industry, whether that be rigid pipes, flexible pipes or cables. It recently completed a 3,000-tonne capacity carousel system for laying cable for a project offshore Norway.

In its third area of business, its biggest marine defence contract has been the development of the Portable Launch and Recovery System (PLARS) for Rolls Royce. This is a ship-mounted system, to launch and recover the rescue submarine, forming a key part of the new Nato Submarine Rescue System.

"What we have done has probably never been done before," says Dr Trapp. "We have designed and built a 110-tonne system, which is all air transportable, can be broken down into units and can be reassembled on a vessel within 18 hours."

It was a big challenge, but one which The Engineering Business met and Dr Trapp believes the North-East's offshore industry as a whole is capable of meeting.

"The North-East offshore industry can do much better. We have a huge maritime history, a great reputation and some excellent human resources in both practical skills and knowledge. Complementing this, we also have a first-class supply chain and good riverside resources," he says.

"It is so refreshing to report on a real success story for the manufacturing industry in the region," says Tony McPhillips, head of the employment group at Robert Muckle.

The law firm has worked closely with The Engineering Business for a number of years, and has seen the company move from strength to strength.

"The Engineering Business is a great example of how a business can succeed in the face of fierce competition through a combination of astute management and maximising its workforce's skills," adds Tony McPhillips. "There is no doubt we still have the skills base in the region to compete with anybody, and that success breeds success. We need to encourage our people to stay in the region, even if this means diversifying into other areas as The Engineering Business has done."

Dr Trapp points to the economic benefits a successful offshore engineering business such as his own can bring. It employs over 100 people - largely highly-qualified and well-paid engineers - and it has a big multiplier effect, giving work to about 50 sub-contractors and placing orders for about £12m worth of equipment every year, 60% of which is sourced in the region.

"This is one of the fastest growing sectors in the North-East and there is far more work than we alone can do," says Dr Trapp. "With global worries about a shortage of oil, there's a huge growth in subsea work and a vibrant market. In places such as Rotterdam and Stavanger, mothballed yards are now being re-opened and upgraded to exploit this market.

"There is also the prospect of the Government placing orders for new aircraft carriers for the Royal Navy which will mean a lot of demand for marine engineering work. All this must be taken into account when looking at the remaining Tyne yards and deciding whether to build blocks of apartments on them.

"Why are qualified people from the North-East going to Holland to work and why is it that we are taking on people who have been born in Northumberland but have had to go out of the region to find work?"