Energy Voice | Kongsberg ideal custodian for peerless Ulstein brand

On July 6, Rolls-Royce Holdings said it would sell its loss-making commercial marine business to Norway’s Kongsberg Gruppen for £500 million.

Thus ended virtually 20 years of UK ownership of what was fundamentally a Norwegian business centred on the famous Ulstein brand and employing around 3,600 people across the Nordic region.

There had been rumours for a number of years that, having acquired Ulstein Holding through its takeover of Vickers in 1999, Rolls-Royce was not particularly committed to its Scandinavian maritime possessions and that it was only a matter of time before it was sold off.

That its ownership lasted two decades is a tribute to the British group, which is a world leader in aviation technology. During its Ulstein tenure, it was similarly placed with ship design, construction and ship technologies.

There are few energy support and construction ships afloat today that aren’t Norwegian-designed and don’t have Scandinavian equipment aboard, including sophisticated ship management systems, often manufactured by Kongsberg, the new custodian of the Rolls-Royce marine business, a large part of which was heritage Ulstein.

The acquisition by Rolls-Royce came less than a year after Vickers took over Ulstein.

At the time of its Ulstein transaction, Vickers’s marine-engineering division included Swedish-based Kamewa Group, which was the group’s core manufacturer of marine-propulsion systems, including engines, propellers and other related parts.

Vickers said Ulstein’s expertise in developing the design and supply of integrated marine systems would complement the company’s existing operations.

On completion of the acquisition, Vickers then sold the Ulstein shipbuilding division to the former shareholders of Ulstein for about £10m. It went on to develop the now famous X-Bow family of ships.

The shipbuilding division consisted of Ulstein Verft, Ulstein Elektro, Ulstein Flextransport, Castor, several real estate companies and a shipping company, Ulstein Shipping IV, which owned a

Paul Buysse, chief executive of Vickers at that time, said in an interview that Ulstein was the most attractive of 21 potential acquisition targets identified in a recent study.

“This transaction will enable us to transform our position in marine engineering in terms of scale, market penetration and the extent of systems integration that we are offering to customers,” he said.

In the book published to mark the 90th anniversary of the Ulstein family’s corporate adventures it is recorded that Mr Buysse described the takeover as “marriage in heaven”.

Reality was that Vickers really only wanted Ulstein Propeller, which it would integrate with Kamewa.

An aside, Vickers was also the parent company of the Brown Brothers group, which produced marine steering gear and stabilisers.

A few weeks after the deal, Vickers fell to Rolls-Royce in a £576m deal for its marine engineering businesses.


Ulstein started off in 1917 in Ulsteinvik on the west coast of Norway as a fishing boat repair yard, first concentrating on mechanical engineering work as the fishing industry mechanised, and later moving into shipbuilding.

Rolls-Royce was founded a decade earlier, and had its origins in F H Royce’s Manchester electrical business that began in 1884.

Vickers goes back to the start of the British steel age in the 1820s, and became a force in building surface warships, merchant vessels, submarines, aircraft and more.

Kamewa in Sweden started out as a railway repair workshop in 1849. It moved through shipbuilding and water turbines to develop controllable pitch propellers and waterjets.

When the search for offshore oil and gas began in the North Sea, traditional Gulf of Mexico support vessels were found wanting in seaworthiness.

Ulstein recognised that its experience of designing seaworthy fishing boats and other vessels gave it the background needed to provide the growing offshore oil industry with vessels that could do the job in tough conditions.

The result was the famous UT 704 and UT 705 anchor-handlers and supply boats that are such a familiar sight in ports like Aberdeen, Peterhead and Lerwick.

Various competing designs included vessels built by Aberdeen’s long defunct Hall Russell Shipyard. But the Norwegians quickly prevailed and dominated the offshore support vessel construction industry that grew up around the North Sea’s rim.

A long series of other successful designs was developed under the UT (Ulstein Trading) label, and from this grew a major business, not only building support vessels at the company’s own two shipyards in Ulsteinvik but also supplying design and equipment that could be built at other shipyards.

As this concept developed, companies such as Liaaen Engineering were bought and new products introduced.

Also, Ulstein acquired the design firm Nordvestconsult (NVC) which specialised in ships such as ropax ferries and fishing vessels.

In 1997, the transition was made from a family-owned company to one listed on the Oslo Stock Exchange, paving the way for major upheaval. The surrender to Vickers was followed in short order by Rolls-Royce swallowing the UK competitor.

The result was that Rolls-Royce went into the 21st century as a world-leading designer of specialised steel vessels and manufacturer of marine equipment and systems spanning both the naval and commercial worlds.

It had also acquired a distinguished marine heritage traceable through companies that had been bought up by Vickers and Ulstein at various times, in parallel with its own mainly naval engine background.

Supply of designs and complete equipment systems for offshore vessels became a major business, with the continued development of the UT design concept and related NVC.

More than 800 vessels of UT design have now been built at shipyards around the world, while a major part of the business has been centred on providing integrated equipment systems for third-party designs, including engines and propulsion systems, controls and automation, deck machinery, steering gear and dynamic positioning systems.

Whilst the majority of offshore support vessel orders have for some years been placed with Far East yards, the design and engineering is ubiquitously Scandinavian even if, for virtually two decades, the leading house brand Ulstein was UK-owned.

Happily for Norway, the Ulstein shipyards business continued to prosper during the long boom in offshore vessel construction, and actively diversified into building and converting other types of ships when the oil price collapsed, including gaining a strong foothold in offshore renewables tonnage.

After the UT and NVC designs went to Vickers and then to Rolls-Royce, Ulstein was allowed to design vessels to build at its shipyards, then, after a quarantine period, sell designs for others to build. This was the genesis of the bull-nosed X-bow family of which more than 100 have been built and are hugely respected as sea boats. Many of these have specified Rolls-Royce equipment and systems, particularly power, propulsion manoeuvring and deck machinery.

This spirit of competition and co-operation appeared to spur innovation, regardless of ownership.

A hundred years of continued development is a considerable achievement for a company in a market as cyclical as shipping and the Norwegians have had to become highly adept at reinventing their presence in the industry.

That the heritage Ulstein business, via Vickers and Rolls-Royce, should survive as long as it has and be returned to Norwegian ownership is a tribute to Scandinavian nous.

That its new owner will be Kongsberg is also highly significant. It is a survivor with roots buried deep in the defence industry but also in silver extraction in the 1600s around the town of Kongsberg.

It is also right at the cutting edge of maritime industries and developed the pioneering Hugin autonomous underwater vehicle. It is a world leader in ship management technologies, underwater positioning systems, simulators, autonomous fish farm management systems and much more.

It is probably the logical owner/partner for Rolls-Royce’s marine business, given its large heritage Ulstein content. Together they are in a class of their own. Moreover, the deal has the blessing of the Norwegian government. After all, it holds 50.001% of Kongsberg.

As for the UK, quite simply, there is nothing to match their combined capabilities. The Brits are even more comprehensively outclassed, now that Rolls-Royce has thrown in the towel with Ulstein and passed its marine interests baton to the Norwegians.


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