In a full year marine activities within Rolls-Royce are expected to account for around 15 per cent of the group's turnover. Although aerospace activities continue to dominate, marine is now seen as a much more significant part of the Group.
1.3 Operating Costs and Procurement Strategy
Supply chain management relating to Marine businesses is under active consideration. The Marine Procurement Director is looking to rationalise the supply base in order to exploit the benefits of purchasing goods in high volumes. He will then move on to consider a sourcing strategy that meets the common needs of the Naval and Commercial Divisions. Cost efficiencies are expected to arise from savings in purchasing, selling and distribution costs and elimination of duplicated activities.
Near to the company's engine factory in Bergen there is a foundry, which although operating for 150 years is now housed within a modern facility dating back to only 1991. Castings are produced in ductile, compacted and grey cast iron up to 15 tonnes a piece. The foundry has a capacity of 10,000 tonnes a year and specialises in high quality complex castings. Most of the castings produced are for use in marine equipment, and include parts for diesel and gas engines, steering gear, deck machinery, propellers and hydraulic motors.
1.4 Competition Aspects
Rolls-Royce has a stated aim of becoming the world leader in the supply of marine systems.
In terms of geographic markets, Vickers considered itself to be a clear leader in its field in Europe and believed that the acquisition of Ulstein's marine businesses gave it the resources to make further inroads into markets in the North American and Asia/Pacific regions. Strategically, Kamewa, Aquamaster, Rauma and Ulstein were seen as an excellent match. The challenge now facing Rolls-Royce is to deliver optimum synergy between the former Rolls-Royce/Vickers/Ulstein businesses.
Rolls-Royce diesel engines compete with the medium sized ranges of all of the other major manufacturers. In respect of gas turbines the main rival is General Electric of the US, which has stolen a march on Rolls-Royce in the cruise ship market.
1.5 Investment Policy
The only significant investments recently within the Marine Division relate to the construction of a new (larger) winch factory in Pusan in Korea and the relocation of the Brown Brothers factory in Edinburgh to a former Ulstein site in Dunfermline in Scotland.
