Harland & Wolff signed the manufacturing subcontract in relation to the £1.6 billion FSS warship programme

Harland & Wolff has signed a manufacturing subcontract with Navantia UK for the £1.6 billion FSS warship programme.

The subcontract stipulates that Harland & Wolff will be responsible for delivering works worth £700-800 million over the seven-year period from 2023-2031.

The company will fabricate various blocks including mega blocks and procure equipment to be installed on each vessel in Belfast. Appledore will fabricate the bow sections for all three vessels, which will be consolidated, fully integrated, and commissioned in Belfast before proceeding to sea trials.

Full-scale fabrication will begin in 2025 with the delivery of the vessels by 2032. The Belfast and Appledore facilities will benefit from a £77 million capital investment program in the next 24 months, including upgrades to technologically advanced robotic and autonomous equipment.

Harland & Wolff will also target a significant number of floating offshore wind projects following planned investments and upgrades to its sites. The company will be measured on its social value contribution through the program, which will involve deepening and strengthening the UK supply chain, taking on graduates and apprentices, and technology transfer from Navantia to Harland & Wolff.

At the peak of the program, Harland & Wolff will provide employment to over 1,200 personnel, including over 100 graduates and apprentices, generating substantial social value across the UK.

The newly signed subcontract represents a significant and historic step change for Harland and Wolff, elevating the company’s capabilities and positioning it as an important participant in the global shipbuilding industry. The company will be able to capitalize on multi-billion-pound opportunities for fabrication and heavy engineering across the defence, renewables, and commercial maritime markets, thanks to its modern shipyards and track record post-FSS.

With planned investments and upgrades to its facilities, Harland & Wolff will also target floating offshore wind projects between 2024 and 2030. The partnership with Navantia will provide invaluable technology transfer over the next seven years. Pre-planning applications have already been submitted, and demolition works will soon begin in Belfast, with the new facility set to be operational within two years.

The National Shipbuilding Strategy has been implemented by the UK government to improve productivity, reduce waste, and promote the transition to Net Zero in UK shipbuilding and fabrication. Harland & Wolff is aligned with this strategy and has been collaborating with various stakeholders to maximize investments in the shipyard while also meeting project deadlines and budgets.

The recapitalization plan for the company will be partially funded through direct investment in the project, as well as through production savings made possible by new equipment and machinery. An estimated £32m will be financed through a combination of long-term leasehold improvements, medium-term asset finance, and a proposed debt facility with Astra, which is expected to be completed by the end of Q1 2023.

Harland & Wolff is also exploring other funding opportunities, including grants for new technology and carbon reduction, to optimize the group’s capital stack over the next twelve months. The company will continue to collaborate with its partners in Team Resolute, Navantia, and BMT on future phases of the programme and other opportunities both in the UK and globally. Additional updates will be provided as any of these opportunities progress.

During the duration of the program, Harland & Wolff’s contribution to social value will be assessed. This evaluation will involve enhancing the UK supply chain, recruiting graduates and apprentices to cultivate the next generation of shipbuilders, and transferring critical technology from Navantia to Harland & Wolff.

At the program’s peak, Harland & Wolff will employ more than 1,200 personnel, with 900 in Belfast and 300 in Appledore. The company will also take on over 100 graduates and apprentices in Belfast and Appledore, creating considerable social value throughout the UK. In addition to providing a significant revenue for the next seven years, the program will enable the company to establish a positive and long-lasting legacy in communities throughout the UK.

John Wood, Harland & Wolff’s Group Chief Executive Officer, has stated:

“I am thrilled that we have officially signed the subcontract with Navantia. This is a significant project that will generate substantial revenue for the company over the next seven years. With the addition of this program, we are now much closer to our goal of achieving £1bn of a contracted backlog of work by the end of 2023. This will enable us to make long-term decisions and continue investing in our facilities to ensure that we remain at the forefront of cutting-edge marine fabrication facilities in the UK.

We can now begin working on the program, with the initial focus on completing the recapitalization plan over the next two years to prepare for the start of production in 2025. As the final strategic element in the carrier strike force, I am looking forward to working closely with our partners in Team Resolute in the years to come to deliver these state-of-the-art vessels to the Royal Navy crews on time and within budget.”

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