Mönch US Correspondent Marty Kauchak completed a wide-ranging interview with Swiftships CEO Shehraze Shah on 11 October. The interview is published below in its entirety.
Change and growth are constants in Morgan City, Louisana (USA)-based Swiftships’ portfolio.
The company’s crafts are in naval orders of battle in the US and other countries. Mr. Shah pointed out the firm has provided vessels to the US Navy, Army, Marine Corps, and Coast Guard and other Pentagon agencies including the Corps of Engineers, as well as to over 50 countries. “Current programmes are focused on stabilising the Middle East with support being provided to Egypt and Iraq,” the industry executive added.
Indeed, when Mr. Shah spoke with MONS, his business development team was completing its second of two recent visits to unspecified current and prospective customer nations in the Middle East and North Africa. And while Swiftships sells craft to non-US nations through Foreign Military Sales (FMS), it also completes transactions through direct commercial sales, as in the case of Egypt.
Mr. Shah reported a healthy backorder volume at the main Morgan City yard, with production underway on projects, including up to four 35m [115ft] FPVs (fast patrol vessels) for Bahrain, and two 75m corvettes for the Pakistan Navy. “Further, we're under LOR [letters of request] for additional PBs (patrol boats), FPVs, and CPCs (coastal patrol craft) from several navies around the globe," he said.
Of greater significance the company’s portfolio of programmes continues to evolve beyond US-based ship building. Under co-production or Build Operate Transfer (BOT) programmes, eleven 28m CPCs are in build for the Egyptian Navy, being constructed in Egypt. Swiftships’ partner shipbuilding entities in that nation include ESRBC (Egyptian Ship Repair and Building Company) and Alexandria Naval Shipyard. “Swiftships is very active in the co-production and ship repair sectors, and our involvement is growing every day as multiple countries are requesting similar programmme offerings,” Mr. Shah noted. “We currently provide co-production support in Egypt for the Egyptian Navy as well as ship repair, overall fleet maintenance, and readiness for the Iraqi Naval Fleet in Um Qasr, Iraq. The total number of vessels is over 40, and they range from 7-85 metres.”
The repair and maintenance programme established for the Iraqi Navy is extensive, mirroring what the US and other navies refer to as life cycle support. The Iraqi contract is one effort to build a national shipbuilding maintenance, repair and overhaul effort. “We not only support them on a day-to-day operation, but also manage their entire training so we can turn out more maintainers and others, who can maintain these vessels after we leave,” the CEO added.
Co-production, as mentioned earlier, is a topic of increasing significance in the defence market space. One insight on this trend can be gleaned though Swiftships’ BOT programme, which Shah explained in greater detail, “is growing around the region following the company’s success on its US Navy-led co-production effort, for which Swiftships delivered four 28m CPC in 2016 to the Egyptian Navy (EN). As a result of this programme’s success, Swiftships was awarded another contract in 2016 to offer eleven 28m CPC kits (complete parts), paid for by the United States Government, to Egypt. The EN pays Swiftships to manage the overall programme activity while shipbuilding is performed by local shipyard(s) in order to allow e-commerce and national capability to increase.”
Currently, Swiftships will deliver the first two fully operational 28m CPCs by the end of this year. The company plans on launching four CPCs per year starting January 2018.
The Morgan City-based company has also determined one major, common intersecting “sweet spot” in customer vessel requirements and demand for clients overseas – are craft in the range of 25-45m in length. “The clients requesting such vessels are mostly Middle East and African countries. In addition, more near-coastal, economic, and zone-patrolling requests are coming from islands within the Caribbean for ships ranging from 12m to 25m,” Mr. Shah said.
There are several forcing functions shaping these requirements. In one instance, many customer nations in the Middle East and elsewhere are oil dependent, approving defence budgets to match the current, stable oil price (about U $50/barrel), well below the $100/barrel mark of recent, headier years, and loftier, associated military spending levels. For its part, Swiftships has taken proven ship designs in its adjacent commercial oil and offshore sector, and converted them for military use. “Nations such as Egypt or Kuwait want a proven hull," Mr. Shah emphasised. “It has really helped us to be in the commercial space, which has allowed us to stretch these boats to 65 or 70m, especially in the aluminium class, when necessary.” Beyond price, is the reality that most current customers, with the exception of Egypt and Pakistan, do not have blue water navies, and use smaller craft to complete patrol and other missions offshore – up to 200nm [370 km]. “Getting a new 65m vessel for many nations is absurd,” he observed.
Some of Swiftships’ tier 1, original equipment manufacturer suppliers from around the globe for shipboard systems include: engines and generators – Caterpillar; gears – ZF; bridge system - OSI Marine Systems; navigation/communications/radar - JRC & Harris; propulsors - Michigan Wheel; steering system - Bier Radio; tactical systems - Raytheon & Northrop Grumman; combat systems - Lockheed & Raytheon; and radar - Thales.
Mr. Shah added: “I didn’t mention the weapons companies. There are so many of them and BAE Systems is one of them. BAE Systems gets the first access to everything because it is a weapon of choice for the US Navy and it is a programme of record.”
Sales of Swiftships’ 11m unmanned Anaconda Special Operation Craft Riverine (SOC-R) craft are gaining traction. The company just delivered its first fully operational SOC-R to the Pakistan Navy (PN) for use by its marines. “The vessel will upgrade their capability for fighting insurgents and performing drug interdiction-related tasks for highly dense and shallow areas,” Mr. Shah said. Further, 26 more craft will be provided in the next six months for customers in Middle East and North Africa, and South East Asia. “They get an American hull but other technologies in it, in terms of Rolls Royce water jets and a Yanmar high powered diesel engine. We have built many of these for SOCOM [US Special Operations Command] so it’s a proven platform,” he concluded.