A Quest to Improve Efficiencies
 
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A Quest to Improve Efficiencies

      7/20/2003

A Quest to Improve Efficiencies

Kvaerner Philadelphia Shipyard christened its first containership ship on July 12, 2003. The day marked a historic milestone - the first ship to be built in Philadelphia in 34 years, and the first of its kind to be built in the United States since 1992. The M.V. Manukai, which means "bird of the sea," is the first of two for Matson Navigation Company. A thorough review carried out in connection with the commissioning of the ship has revealed higher costs and lower productivity than previously expected. Delivery of the ship has been delayed for about one month, and the costs are estimated to be around NOK 200 million higher than previously reported.

At the same time the yard has increased its cost estimate for the other two containerships under construction by an equivalent amount. Increased costs on the three ships implies that Kvaerner Philadelphia's operating results in the second quarter of 2003 will be weakened by an amount just above NOK 400 million. Aker Kvaerner acknowledged that the substantial commitment made to turn Kvaerner Philadelphia into an efficient and commercial yard has not so far given the desired results. In an effort to accelerate the improvement, Kvaerner Philadelphia will now further strengthen its capability in project management, procurement and construction management.

The first two containerships from Kvaerner Philadelphia have been bought by Matson Navigation Company. In agreement with the customer, the first vessel will be delivered in the beginning of August, approximately one month later than originally agreed. The second will be completed in the second quarter of 2004.

Mr. Tore Langballe, Aker Kvaerner
 

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