Norwegian engineering and construction firm Kvaerner has announced plans to "accelerate" the company's development, including looking at potential new partnerships and a change in ownership structure.
Image: Kvaerner's Verdal yard.
Kvaerner has appointed advsiry firm Greenhill & Co. International to advise on evaluating all strategic alternatives.
The move comes as Kvaerner continues to battle competition from Asian firms and to address high costs in Norway. Announcing the firm's Q2 results, Jan Arve Haugen, president and CEO, said progress had been made, but that more was being done. "For new projects, our aim is that the improvements we now implement will reduce our cost base with 15%," he said.
The firm has had a busy order book. In Q2, Kvaerner completed three large offshore platform projects; the steel substructures for the Edvard Grieg and Martin Linge fields, and the topside for the Eldfisk field.
The firm, which had been independent, before becoming part of the Aker Solutions group, then named Aker Kvaerner, before being spun out again in 2011, has also sold off non-core assets, namely its north Amercian construction business, and agreed partnerships with overseas companies, including COOEC in China, north American contractor Peter Kiewit & Sons, and KBR.
"While we succeeded in building a record high order backlog up to 2013, we also received valuable feedback from the oil companies after the bidding rounds in the winter a year and a half ago," said Haugen today (September 10). "This spurred us to accelerate a range of activities to increase productivity and reduce our own cost level. The award in June for two steel jacket substructures to the Johan Sverdrup field confirmed that we are moving in the right direction, and the combination of established expertise and reliability, together with renewed cost competitiveness, once more positions us well for the future. Now, we will use this momentum to consider step changes to further strengthen our business and competitiveness."
"The board of directors is pleased with how Kvaerner has started to industrialize the contracting industry and the establishment of a more efficient value chain," said Leif-Arne Langøy, Chairman of the Board of Directors for Kværner. "To take the next step to ensure Kvaerner's long term growth and global competitiveness, we will consider further improvement initiatives, new industrial partnerships or changes to ownership structures, as well as a further streamlining of the products and services offered."
Support from Aker Kvaerner Holding (AKH) will be required if a recommendation from the Kvaerner board would imply a change in AKH's ownership in Kvaerner, or a decision which requires 2/3 majority vote at Kvaerner's General Meeting.
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