Uljanik Shipyard, based in the Bay of Pula, Croatia, was founded in 1856 by the Austro-Hungarian monarchy, and established as the major port of its navy unit. The foundation stone was laid by the Empress Elizabeth in December that year. “By October 1858 we had launched our first vessel, called the Kaiser,” adds Mr Petar Car, “and the construction of 55 ships of various types, all built for the Austro-Hungarian fleet and with a total deadweight of 53,588 tonnes, followed this landmark day.” 

 

After the First World War, ownership of Uljanik Shipyard changed repeatedly. “The Pula shipyard became the property of the Italian Mussolini regime, then in 1943 came the Germans. In 1947 it was renovated under the Socialist Federative Republic of Yugoslavia. In the independent and free Republic of Croatia, starting from 1990, it became a joint stock company,” Mr Car summarises. 

 

“We can definitely say that after the Second World War, we delivered the first vessels,” he continues, “because between the wars, the Italians were trying to get rid of the shipbuilding industry and they took away all of the machinery, so the shipyard survived only by conducting repair work. In 1943/44, the shipyard was bombed by the Anglo-Americans, and so some restructuring was required, meaning it was actually in 1951 that we started with proper production.” 

 

By 1993 the company had approximately 8,000 employees. “From that time we began outsourcing some of our operations, and we came to a level of about 3,000 employees in the holding company, which is comprised of three main companies including us. Of these, about 2,000 work at the shipyard, so we are the biggest part of this holding group,” explains Mr Car. 

 

“We also normally have about 1,000 subcontractors on-site on a daily basis – welders and painters and so on. As I mentioned we did a lot of outsourcing, often to ex-workers, some of whom may have first started working from a garage and now have small factories. We have a well connected system because they are also part of our quality assurance system – we are connected with them by our intranet. So, our ex-workers are now becoming our strategic partners for some things, such as outfitting, since the yard itself is now focused purely on cutting, assembly and mounting.” 

 

 

Uljanik Shipyard operates from two slipways located on a small island in the middle of Pula Bay. “Speaking about the yard as it is, we are rather small in comparison to worldwide shipyards, but we are a similar size to another two shipyards in Croatia. We are building five or six vessels per year, which are known as ‘handysize’ – something between 10,000 and 80,000 tonnes deadweight. From the 50s we built everything – passenger vessels, container carriers, VLCCs etc. The VLCCs were quite interesting because they were launched in two halves, with the two parts then being welded together on the water. Our slipways are quite short and very wide – one is about 56 metres wide and one is 60 metres wide. It is possible for us to make three vessels across these slipways,” says Mr Car. “For years we have been very successful with handysize and medium size oil and chemical carriers, IMO3/IMO2, and we built the last one three years ago. After that we focused ourselves on more complex but less sophisticated vessels – from 2004 we started in the area of car carriers. We have had up to 15 percent of the world market in the car carriers business. Now we are building the last car carrier in this area, however, because we have seen that production of the chemical carriers, bulk carriers, and now the car carriers, is all moving to the Far East – China, Vietnam and other countries – and we cannot compete,” he explains. 

 

“So we have now switched to something that is a little bit different – we are building some special container ro-ro vessels for our big customer which is Grimaldi Group from Naples, and then we are building some livestock carriers. Actually, we are the first company to build a new, bigger livestock carrier. Then we also have a contract for (and very soon we will see the launch of) our very first self propelled cutter suction dredger, and we have four of those planned for Belgian buyers. At the time we signed the contract these were the only vessels of their kind in the world. We built some special wagon carriers for Russian buyers in the Caspian Sea areain the 80s, and recently we have built four small ones for similar trade. So we are focused on things that are a little bit different – tailor-made.” 

Good working relations

 

 “In our history we have been quite focused on the Scandinavian market, and from time to time we have built for the Russian market,” says Mr Car. “Then at the beginning of the 90s we started working with some Italian buyers; we also have quite a good cooperation with the Italian market where the car carriers and ro-ros are concerned. Then in the car carrier business we sell primarily to DV Group, Grimaldi and Ray Car Carriers. “Our main strength is that we are customer-oriented, to build the tailor-made vessels. So flexibility, and fast response to buyers’ demands are the key advantages in dealing with our company in comparison to our competitors,” he adds. 

 

Uljanik’s good working relationships have been central to the company’s sustained success, as Mr Car explains: “Because of our long experience, and due to the tailor-made vessels we are building, we have long-standing relationships with our buyers and we have made agreements so that they compensate in some way for some of the big problems that we have been facing. For example, from the end of 2003 the steel prices grew from US$300 per tonne to almost US$1500! Where procurement is concerned we also managed to change our contracts from being dollar-based to being euro-based in order to overcome the exchange rate problems.” 

 

Though Croatia is not yet a part of the European Union, Uljanik is very much involved with the member countries in all aspects of its operations, reaping the benefits of its European location and in turn lending its services to the area. “Because we are very near to the Italian border we are well connected with Europe. Many workers from former Yugoslavia have come to Uljanik, and then when they have learned their trade they move elsewhere in Europe, and from time to time they come back with some new ideas, new technologies etc, so we are also sharing knowledge with Europe,” says Mr Car. “We are also participating in some European research programmes. One is called Improve and one is called Delight. Improve is about a passenger vessel – how to satisfy the buyers, how to build a vessel very efficiently – and Delight is looking at composite materials and such things,” he adds. 

 

“The fact that we are still operating in Europe is actually one of our strengths. Almost all of our equipment is European made – even the steel is sourced from Europe – which is an advantage compared to the Far East because some traditional buyers are a little more oriented to the European market.” 

 

 

Uljanik has implemented several operational changes of late, primarily in order to boost productivity. “We have invested quite a lot over the last four years – almost €40 million in our building halls, and significant amounts in our CAD system. We have also begun using Logimatic MARS ERP from Denmark – this is a huge investment and we spent almost three years implementing it,” says Mr Car. 

 

“From 1996 we have had ISO9001, and our quality assurance is Lloyd’s Register classifed. At one point I was actually one of these certified auditors!” Mr Car mentions. “We are renewing this ISO9001 on a regular basis over six months, and we have just started to implement the new 2008 version. We also have ISO14001 from 2000 for environment, and we have 18001 for safety and health. 

 

“We often attend some training courses about process oriented ideas – lean production for example. So we are trying to use some well known ideas in our operations, and allowing our people to learn new things, because our human resources are a key part of our strategic vision. We have increased our productivity dramatically in recent years, cutting our lead time to build the vessels by almost 40 percent, and we are also trying to benchmark ourselves with well known European yards.” 

 

 

 “We are definitely seeing some problems as a result of the economy,” Mr Car admits. “For the last five months or so nothing has been going on in the world market. However, we are not so afraid for the moment, because as I mentioned we are normally building five or six vessels a year, and we still have about 11 vessels on contract so we are in a good position for at least two years in advance. 

 

“It is not the first time we have seen problems though – in 1991 when Croatia was at war we also saw financing issues. So we are quite used to operating under difficult circumstances, and we believe we can survive this downturn also. Luckily we have reasonable buyers who support us in this area,” he adds. 

 

“For the long-term future, well, we feel that the shipbuilding industry in Europe is going to face more and more problems. Actually when you look at our partners – the bigger equipment makers – they are moving their facilities and production to the Far East. And we know that many large Scandinavian shipyards, and even some other European yards, are almost closed or are focused on something which is ‘special’ – cruising vessels for example. However, we see also that when most of Europe’s shipyards are closed, maybe we will be the ones to take over building these vessels? So this is one of the patterns. “How to survive? Well, certainly we cannot survive on the simple vessels, and we are trying to focus on something which is more complex, more difficult to build. Because in the industrial area of shipbuilding we are not failing to compete – we are always focused on something that is a little bit different or a little bit special, and we believe that in this way we can survive,” Mr Car explains confidently. 

 

“The future is very bright – we know that we will continue to build vessels. Our vision is that Uljanik Shipyard will be the shipyard where everybody wants to build ships – be it shipowners, employees, material suppliers, banks, or government. This is the picture we are trying to build,” he concludes.