Naval Group will build four new submarines for the Royal Netherlands Navy. In the mandatory industrial cooperation agreement (ICA) between the Dutch government and the shipyard, the financial value ending up in the Netherlands during the production phase is already close to EUR 1 billion.
Minister Dirk Beljaarts (Economic Affairs) and Pierre Éric Pommellet (board chairman Naval Group) signed the ICA in The Hague on 10 September. Through the ICA, Dutch maritime manufacturing companies and knowledge institutes are directly guaranteed work and the acquisition of (technological) knowledge in both the production and maintenance of the four new submarines.
Naval Group will build four new submarines of the Orka-class to replace the Royal Netherlands Navy’s current Walrus class, which also consists of four submarines. It has been agreed with Naval to deliver the first two submarines within ten years of signing the delivery contract. Defence has taken measures so that the current Walrus-class submarines can safely sail on into the mid-30s. Two of the four boats will be phased out of service. This will keep spare parts available for the remaining boats
The ICA is a delicate issue. Many Dutch companies and politicians objected to the order ending up with French Naval Group and would have rather seen it end up with the Damen Naval/Saab combination. In their opinion, this would have resulted in more work for the Dutch naval industry. The Dutch government, on the other hand, feels that the ICA ensures that a lot of the work does end up in the Netherlands.
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Ten Dutch companies
About 95 per cent of the financial value in the ICA consists of orders placed by Naval Group with various Dutch companies. The industrial agreement for the submarines themselves includes ten Dutch companies. Contract negotiations with these parties will start soon.
They are Royal IHC (module and steel construction), RH Marine (platform automation and energy management), Bolidt (acoustic cladding), Van Halteren Technologies (hydraulic systems), Optics 11 (detection), Solico (composite structures), Combimac (acoustic signature), Hatenboer (water supply), Heinen & Hopman (climate systems) and Verebus (technical support). The Dutch knowledge institutes MARIN and TNO are also involved in the construction of the new submarines through the ICA, ensuring a transfer of knowledge and technology to the Netherlands.
The ICA is proportionally increased for the future maintenance activities to be invested by the Ministry of Defence at Naval Group. This increases the financial volume of the ICA to well over EUR 1 billion in the future.
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Orders for subsystems and surface ships
Besides engaging Dutch industry for the submarines, Naval Group will also place orders with Dutch companies through the industrial cooperation agreement for subsystems and components for surface ships that the yard builds for various customers. These include a broad group of companies from the maritime defence sector such as Thales Netherlands, DBR, MAFO, Kwant Controls, Rubber Design and Holland Marine Lifts. Dutch companies are already Naval Group’s second-largest international supplier group.
‘As a government, we have to do the maximum to make Dutch businesses flourish, from small to large,’ says Minister Beljaarts. ‘This industrial agreement is a good example of that. After all, our own maritime manufacturing industry, its suppliers and knowledge institutes can build excellent surface ships.’
He adds: ‘Unfortunately, however, we have not had a Dutch naval shipyard independently designing and building submarines for over a quarter of a century. So we must ensure that the broadest possible group of Dutch large companies, SMEs, innovative startups and knowledge institutes can participate in this order for a significant amount of money. We managed to do that. So we ourselves are rebuilding capabilities here in the technological submarine domain. And I will stay on top of it together with the companies that the contractual agreements will be executed from A to Z.’
Also read: Damen on submarine contract award: ‘Foundation of Dutch naval construction swept away’
Wider boost to Dutch defence industry
Additional investment in the Dutch defence and security industry will be made in various ways in the coming years. For instance, the government and the maritime manufacturing industry have a joint sector agenda with measures to prevent flooding, accelerate the energy transition and ensure economic and military security.
The government and the sector have agreed to get started immediately with active industrial policy. In 2024 and 2025, they will therefore jointly invest EUR 60 million in innovative shipbuilding.
Additional EUR 1.1 billion for Defence and security
From the Defence Paper published this month, an additional EUR 1.1 billion will be available for Dutch defence and security companies in the coming years. For instance, by increasing the SecFund for startups and innovative SMEs. There is also more funding to support other promising technology companies operating within both defence and civilian sectors.
With the Defence and Security-related Industry Resilience Bill (Wetsvoorstel Weerbaarheid Defensie- en Veiligheidsgerelateerde Industrie), the Ministry of Economic Affairs is ensuring that Dutch industry can further scale up, limiting unwanted interference in it by testing investments, mergers and acquisitions for risks to national security and improving the international starting position of these companies.
Picture: The new Orca-class submarine that Naval will build for the Royal Netherlands Navy versus the current Walrus-class in the background (image by Naval Group).
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