Norwegian engineering and construction company Kvaerner has bought more production and warehouse space, as well as office facilities as part of its strategy to “increase competitiveness and position the company for future growth.”
On Thursday, September 19 Kvaerner said that, at the group’s facilities at Stord, the capacity in the yard area, storage area, and offices was expanded.
In addition, Kvaerner establishes its own inhouse capacity to supply insulation boxes, which often makes up a significant part of offshore or onshore processing plants. According to the company, these measures will contribute to more efficient work processes and reduced costs in future projects.
In total, the investments amount to around NOK 90 million ($10.1M).
Earlier this week, Kvaerner informed it had established two new focus areas to grow its operations within both oil and gas projects and in renewable industries. With the new focus areas – renewables and floating production units – the group is aiming for around 40 percent growth within a few years, compared to revenues in 2018.
The strategy comes in response to a changing market, where, among other things, deliveries of floating production units, onshore plants, and offshore wind power projects are expected to constitute a larger share of the business.
Gaining access to more space
Kvaerner noted that its specialized facilities at Stord would continue to be a power center for project execution. To gain access to more production and warehouse space, as well as office facilities, Kvaerner has purchased Selvaag Bolig’s stake in Stord Industribygg Holding.
The acquisition makes Kvaerner the sole owner of the company which, through the subsidiary Stord Industribyggg, owns the office building at Bleikjehaugen, the camp area at Naustvågen, and Kjøtteinståa with the associated buildings.
With this transaction, the yard adds an area of 123 000 m2 and 10 000 m2 of office space. The acquisition will be completed in the third quarter of 2019.
“Selvaag Bolig is pleased that Kvaerner now takes 100 percent ownership of Stord Industribygg Holding AS, as the business of this company is not within Selvaag Bolig’s core business, housing development and housing construction,” said Sverre Molvik, CFO of Selvaag Bolig.
“Kvaerner’s yard at Stord will play a key role in the company’s growth strategy. The yard has for decades developed methods and facilities for project execution, and a vast expertise that the company will rely on moving forward. With these investments, we facilitate growth and believe that they will result in increased earnings and better returns for our owners,” said CEO Karl-Petter Løken.
“Access to suitable areas and facilities will be important in developing the future of Kvaerner. This investment gives Kvaerner control over the necessary facilities, and will reduce the risks and dependencies associated with external storage, production and office facilities,” says Executive Vice President Steinar Røgenes.
Setting up production line for insulation boxes
Kvaerner added that two other measures for increased productivity and competitiveness are the establishment of a new painting hall of 875 m2, as well as the establishment of a 1 000 m2 production line for insulation boxes, both within Kvaerner’s area at Stord. Many of the processing plants Kvaerner supplies require up to several thousand insulation boxes, most of which are manufactured to size, so that the pipes in the system maintain the correct temperature.
The purchase of such boxes has been a significant part of previous projects and has often had a long delivery time. The investments in the painting hall and production line will be completed in the third and fourth quarters of 2019.
“By doing this ourselves, we reduce costs significantly, and we reduce delivery time from several weeks to a few hours. This will be an important measure in order to strengthen Kvaerner’s competitiveness,” said Røgenes.
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