Damen: Little Giant
By focusing on small ships, niche markets and standardized construction, Damen has become a global giant.
(Article originally published in May/June 2020 edition.)
“We’re big in small ships,” Arnout Damen likes to say. The newly appointed CEO of the company founded by his grandfather and great-uncle nearly 100 years ago knows full well the responsibilities he’s inherited. He’s been groomed for the job for years under the tutelage of his father, Kommer, and others. What no one anticipated was a pandemic to come along a month after he took office in January.
“It’s not what I expected,” he admits.
He responded quickly and decisively, installing new safety protocols at the firm’s dozens of global facilities, bringing home employees from overseas where necessary and initiating work-from-home procedures. “We have a couple of thousand people working remotely and had to shut down some of our yards,” he says. “Otherwise, all our facilities are up and running and we’re delivering new vessels to clients every week.”
As an example, he cites the company’s newly introduced Electric Cutter Suction Dredger 650, a vessel with electric motors powering the dredge that makes possible zero-emissions dredging projects and hearkens back to the company’s formative years in the dredging business. The ship is the latest advance in Damen’s journey toward becoming the most sustainable shipbuilder in the world, both in the products it makes and how it makes them.
Electrification, and electric vessels, are one aspect of that journey and part of the company’s so-called “E-3” program – environmentally friendly, efficient in operation and economically viable. Other projects include seven fully electric ferries for the city of Copenhagen – the Damen Ferry 2306 E3, featuring a completely emission-free propulsion system – and an order from the port of Auckland, New Zealand for the world’s first fully electric ship-handling tug – the RSD-E Tug 2513 – with 70 tons of bollard pull.
"Our vision is to become the most sustainable and digital shipbuilder in the world,” says Damen. “To achieve this, the focus is on going ‘back to the core’ on standardization and series construction, the traits that have made Damen great and that are essential to make shipping greener and more connected.”
The Damen Standard
In 1927 the Damen brothers, Jan and Rien, officially opened their shipyard near the Merwede River in western Holland and registered their first sale – for 175 guilders – under the accounting entry, “build number 1.” From there it grew slowly and remained a small, yet prominent company for decades.
By 1964 the brothers had built 300 vessels and employed more than 40 workers including their sons, both of whom were named Kommer after their grandfather. Jan Damen’s son, Kommer Janszoon, today’s Chairman and Arnout’s father, had been at the company almost every day since he was a youngster and had a complete understanding of the organization and its dealings. He had graduated from a technical college and completed service in the Netherlands Royal Naval and was put in charge of the technical department.
While the company had a cadre of longstanding customers, Kommer wanted to cultivate new ones and hoped to achieve this by building standardized hulls to be kept in inventory and later sold to clients and modified to their specifications. Having inherited his father’s entrepreneurial genes, he foresaw the future and envisioned that standardization was the only way to compete globally.
It became known as “the Damen Standard.”
In 1968, after a partnership of 41 years but differing on the future direction of the company, Jan and Rien Damen parted ways. A year later young Kommer Damen, seeing an opportunity, secured a loan and bought his father’s equity for 300,000 guilders. He was 25 years old.
Damen had become a well-known and respected boatyard, especially in the Dutch dredging support and construction sectors, and Kommer immediately introduced the concept of modular construction for small boats and launches. The Damen Standard generated clear advantages – fast delivery times, reduced cost and proven designs. It was an immediate success, and in 1973 the company expanded to larger facilities in Gorinchem.
Gorinchem’s strategic position in the dredging industry led to increased demand for Damen-built workboats and auxiliary equipment. The workboats soon gained an excellent reputation in many foreign markets as well, and Kommer Damen saw the potential for export.
The Middle East was a hotbed of port construction and dredging at the time, and several large Dutch companies were hired to do some of the work. Damen’s prebuilt boats were in high demand because they could be built, outfitted and mobilized in just a few weeks. The “Pushy Cat” tug, equipped with Caterpillar engines, became wildly popular as did its successor “Multi Cats.” At the height of the Middle East construction boom the company had sold more than eighty boats in the region.
The steady growth continued as Damen took over numerous yards specializing in niche markets. This led to the establishment of partnerships and business cooperations with yards and vendors all over the world. The company today maintains an “in stock” inventory of prebuilt tugboats, workboats, combi-freighters, crane barges, dredgers, military and patrol vessels, pilot boats, and ferries and pushboats – to name just a few!
Kommer Damen had bet his entire wealth on standardization and keeping an inventory of vessel hulls, and it remains the backbone of the organization today. Since 1969, the company has built more than 6,500 vessels for clients in more than 100 countries. It operates 36 shipyards worldwide, has 12,000 employees and 54 companies worldwide, and annual turnover in excess of €2 billion – roughly one-third of it E.U.-based and the other two-thirds international.
“Where There’s Water, There’s Damen”
The company had become large enough that it needed to consider restructuring.
“We had a parent company and lots of small companies scattered all over the place,” says Arnout Damen. “Responsibilities and reporting lines were scattered too. We had to bring them back together and organize them better and establish clear lines of accountability.”
The process started months before he became CEO on January 1, and the new division structure was formally installed on that date. The company was reorganized into six divisions – Naval, Yachting, Workboats, Mid-Sized Vessels, supplemented by two divisions of mainly autonomously operating companies (Repair & Conversion and Maritime Ventures) – with a Managing Director responsible for each. It simplified and standardized the structure. It was the Damen Standard all over again, this time at the organizational level.
“It’s made my job a lot easier with fewer direct reports,” Damen says, “and that’s especially important now with the COVID-19 crisis and all its challenges.”
His focus now is “to keep the machine working, to keep everything floating and turning.”
The new structure is helping. The company has built a reputation for what it calls “servitization” – providing “cradle to grave” service based on lifecycle support services monitored through a global network of maintenance, repair and conversion facilities. It starts with financing assistance and includes a variety of maintenance arrangements and now digital connectivity.
Damen Digital unlocks critical data and information regarding vessel performance via onboard sensors, allowing quick response times and preventing potential problems. Damen’s research and development teams work with clients with the data collected from each vessel to maximize uptime and fuel efficiency and minimize environmental impact.
The data collected further enables the company to optimize future ship designs and maximize value for clients.
Toward a Sustainable Future
Short delivery times, low total cost of ownership, reliable performance and minimal carbon footprint are all part of being a sustainable company. Building hybrid tugboats and electric ferries and focusing on a future of sustainability for its clients, vendors and employees have set Damen firmly on the path toward becoming a greener corporate organization.
“Fully connected ships go hand in hand with sustainability,” Damen says, “and can help you save energy and money. Is the ship sailing at an economical speed? Is it using the best route? Is the maintenance being done properly? The answers to these and similar questions are all part of sustainable operations.”
Central to the vision is building sustainable supply chains and reducing costs and the environmental footprint in the process – a significant part of being a global shipbuilder.
Recently, Damen decentralized product sourcing from headquarters in the Netherlands to yards throughout the world so local management could build long-term relationships with local suppliers. The goal is to create more expertise at the local level and reduce, for example, the transport of dangerous materials and minimize other risks to the environment by buying locally.
The company also maintains a strict “Supplier Code of Conduct,” which specifies equal opportunity and prohibits any form of discrimination whether based on gender, race, age, sexual orientation, national origin or disability. It further requires strict adherence to essential regulations regarding child labor laws.
Damen thinks the pandemic – among its many challenges – will actually accelerate developments in sustainability and green shipping. “We’re living in a fast-changing, increasingly environmentally conscious and health and safety-minded world,” he says. “The virus has served to reinforce those concerns.”
Meanwhile, the company is in good hands as it looks toward the future under a new generation of leadership. Arnout Damen is clear about his vision and what the company’s mission is: “We have invested for many years in research and development into vessels that can provide huge reductions in emissions. Long-term sustainability is where the future of our company lies. We want to make the earth ready for the next generation.”
Tony Munoz is Publisher and Editor-in-Chief of The Maritime Executive.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.