Finnish Firm Bucks Shipbuilding Slump

Selling icebreakers to the communists and luxury cruise liners to the capitalists, Finland’s Wartsila group is a money maker in the crisis-ridden world of shipbuilders.

While most shipyards in Europe and Asia suffer from a lack of demand, the Wartsila group has a packed order book, comprising 21 ships worth $1 billion at the end of last year.

Wartsila is making money because it is one of the world’s leading designers and suppliers of special vessels, mainly icebreakers and luxury cruise liners.

Highlights in 1984 included delivering the sleek Royal Princess, a 45,000-ton luxury liner, to the British P&O; line, and a $300 million Soviet order for two nuclear-powered super icebreakers that will keep Wartsila shipwrights busy until the end of the decade.

“It was the biggest single order ever for a Finnish company,” a Wartsila spokesman said of the Soviet order.

The two icebreakers will each be propelled by a 52,000-horsepower nuclear plant, company officials said.

The Finns, once billed as the “Japanese of Europe” for the success of their industries, have a reputation for building some of the best icebreakers in the world.

Ambitious R&D; Program

Because Finland is the only country in the world with all her harbors ice-bound during winter months, 150-year-old Wartsila’s icebreakers are the result of long experience.

But without ambitious research and development of concepts for building icebreakers, privately owned Wartsila would not have d its edge in the face of cut-throat competition in the international shipbuilding industry, the officials said. “We have been able to create new solutions to satisfy our customers by investing heavily in research and development,” said Tankmar Horn, head of Wartsila group, which claims to be the only shipyard to combine research with actual construction of icebreakers.

Inaugurated in 1983, Wartsila’s Arctic research center has 100 employees who spend their days around a 196-foot test basin in the Finnish capital studying the behavior of ice and icebreaker models.

Up to 46-foot models can be tested in the ice-covered basin, said to be the second largest such facility in the world.

For all its experience and research, however, Wartsila will feel the crisis in international shipbuilding. But while some foreign competitors have announced massive layoffs, minor cuts may take place at Wartsila later this year, a spokesman said.

‘Retain Market Standing’

Wartsila’s shipbuilders are facing a decline in the number of deliveries in 1985, but production volume is expected to rise slightly in 1986.

The shipbuilding division employs half of the 18,000 workers in the Wartsila group.

The 1984 annual report predicted the shipbuilding division “will retain its market standing and thus maintain profitability at a satisfactory level in the next few years.”

Apart from shipbuilding, Wartsila includes such different branches as Diesel engine division and Consumer Goods division, which has made the company a household name in Finland.

The group’s net sales, mostly exports, $960 million last year, a rise of 15% from 1983. The shipbuilding division alone chalked up net sales of $584 million, an 8.4% increase from the year before.