July 9, 2018 - Two maritime industry equipment and technology suppliers are merging operations after Rolls-Royce agreed to sell its Commercial Marine division to Kongsberg Gruppen for £500 million ($664.2 million).
The deal is partly a bid to advance Kongsberg's ambitions to build the world's first fully electric and autonomous containership by 2020, Port Technology reports.
The timing was right for an acquisition in the maritime sector despite short-term challenges, according to the webcast. As the shipping industry continues to globalize, it is "undergoing considerable technological and market driven changes," Kongsberg President and CEO Geir Håøy said in a statement.
Kongsberg is setting itself up to be a leader in equipment and technology sales to the new wave of vessels likely to be built for new compliance standards set to take effect in 2020.
In an effort to reduce global greenhouse gas emissions, the International Maritime Organization (IMO) will require all vessels to comply with a new limit on the amount of sulfur content on the fuel oil used on board a ship by January 1, 2020. As of that date, fuels used for vessels cannot exceed 0.5% mass-by-mass (m/m) sulfur content — a seventh of the current 3.5% m/m standard ships run on.
As a result, vessel owners and makers are looking for ways to make ships traverse the world more efficiently.
OOCL, for example, recently partnered with Microsoft Research Asia to integrate AI into its vessel routing systems. The carrier expects to save $10 million with the technology by avoiding unnecessary costs (such as fuel consumption) and disruption.
Rolls-Royce last year launched a similar pilot program with MOL to build "intelligence awareness" on a ferry ship traveling on congested routes. The test was a step toward the carrier's "ultimate goal of autonomous sailing," Kenta Arai, director at MOL, said in a statement at the time.
The increased efficiency will not help meet fuel standard compliance — only fuel (or electric alternatives) can do that — but ships equipped with new diesel engines may as well come with intelligent technology upgrades that can help offset other operational costs.
Kongsberg has been aggressively pursuing new ventures and partnerships that will help them meet the new expectations on the road to 2020.
In April, Kongsberg and Wilhelmsen started Massterly, a joint venture dedicated to autonomous shipping. The Rolls-Royce Commercial Marine sale adds a significant research and development component to its operations, as well as various existing clients and partnerships.
It also means once integrated, Kongsberg will already service roughly 30,000 vessels worldwide and have operations in at least 34 countries.
"Both companies hold leading positions within digitalization, ship intelligence and concepts for autonomy," said Håøy. "By bringing together this we are positioning us as a significant supplier of complete solutions for the future maritime industry."
Source: Supply Chain Dive
