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Spain's Barreras bags Ritz-Carlton order, and here's why

The 24,000gt vessel has a yacht-like profile, water sports marina and all veranda suites The 24,000gt vessel has a yacht-like profile, water sports marina and all veranda suites

It's official: Astillero Hijos de J. Barreras (HJB) in Vigo won the order for The Ritz-Carlton Yacht Collection's first newbuild, launching a new shipyard and a new brand into the booming cruise sector.

'We believe we will get an excellent ship there,' Lars Clasen, co-managing director for The Ritz-Carlton Yacht Collection, told Seatrade Cruise News.

The order was announced Tuesday morning in Vigo before a high-level delegation of Galicia officials.

The 24,000gt 'cruise yacht,' with capacity for 298 passengers, is due in fourth quarter 2019, and the contract provides options for two additional deliveries, in Q1 2021 and Q1 2022. No price was disclosed, but the cost of the first ship is estimated at approximately $210m.

The order is supported by CESCE, Spain's export credit financing agency, and CaixaBank, one of Spain's largest. Plus, like France, Spain has a tax lease scheme that benefits this project.

The 190-meter/623-foot all veranda suite vessel sports a sleek, slender, super-yacht profile. It will have five dining venues, a Ritz-Carlton Spa and a water sports marina.

'Tillberg Design has done a great job,' Clasen said.

HJB, a family company with a majority stake now held by Mexican oil giant Pemex, has built more than 1,600 vessels in its 125-year history. They include passenger ferries, technically complex DP3 offshore vessels, ro-ros, container ships, tankers and car carriers. For Ritz-Carlton, its first cruise newbuild, HJB bested 12 others that bid for the business of the 17 yards that were invited.

According to Clasen, HJB was selected from three shortlisted yards for the quality of its work, price, delivery time, financial stability and access to export credit financing. The yard underwent insolvency in 2011 but has recovered and deep-pockets Pemex holds a 51% stake. An outstanding management team, transparency of processes and willingness to resolve what Clasen called the yard's sole deficiency—lack of luxury outfitting experience—were key.

In HJB's favor, there's a huge maritime cluster around Vigo Bay. For example, Clasen said all Otis marine elevators are built within 15 minutes of the yard. Also important, the yard agreed to partner with Interior Proman, an Austrian company with expertise in super-yacht outfitting.

Key suppliers include MAN Diesel for the engines and ABB for the Azipods. The cruise yacht will run on marine diesel only, not HFO. Clasen is an LNG proponent and the ocean ship project he'd developed for A'ROSA, which never came to fruition, would have used LNG. For the Ritz-Carlton start-up, though, it was decided not to add that complexity.

'We're going with proven technology—clean marine diesel fuel,' Clasen said. The cruise yacht will have diesel electric propulsion with common rail fuel injection, which provides better efficiency across various speeds.

The classification society is DNV GL, and registry is Malta.

It has been complex and challenging to get to an order, which was inked in mid-May but kept quiet until now.

When Clasen and Doug Prothero, co-managing director of The Ritz-Carlton Yacht Collection, began working in 2013, slots were available at the major cruise shipbuilding yards. Orders started to pick up in 2014 and deliveries were pushed out two years. In 2015, deliveries went even further out—ultimately, to the current record orderbook—so they widened their search to 17 yards, all in Europe. In addition to the big four cruise shipbuilders, they looked at other yards in Italy, Germany, Norway and Croatia. Twelve bid.

HJB's price qualification was 'very much in line with experienced yards, while others were way out,' Clasen said.

Explaining why HJB went for the Ritz-Carlton business, project management office and sales director Alfonso López Loureiro said that given the yard's experience, technical capabilities and changes in organization and management, 'We were ready to enter the special and demanding cruise market.'

The yard can't build large cruise ships 'but there is a very interesting niche of that market for HJB: the high-end, quality vessels and the expedition vessels.' Both types, between 100 meters and 200 meters, 'fit perfectly in our facilities.'

The business is significant for the Galicia area in northwest Spain. Dignitaries expected to be on hand for today's Ritz-Carlton announcement included Alberto Nuñez Feijóo, president, government of Galicia; Francisco Conde López, counselor, economy, employment and industry; Ignacio López-Cháves, territorial delegate for the government of Galicia in Vigo, and Enrique López Veiga, president, Vigo Port Authority.

The Ritz-Carlton team brings shipbuilding chops to the project. Part of the team that launched AIDA Cruises, Clasen was involved in building its first three ships and developing the subsequent Sphinx-class vessels, signing for the first in 2004 of what ultimately stretched to a series of seven. He then led A'ROSA, which built 12 river vessels, and championed an ocean newbuild there.

Prothero is an experienced boatbuilder and shipowner. Their marine operations director, Capt. Erik Bredhe, was the longest serving master of The World and involved in its construction. The group is forging a newbuild project team with some seasoned naval architects, including talent previously with Norwegian Cruise Line who left after the merger with Prestige Cruise Holdings.

The yard's López Loureiro expressed confidence HJB can successfully build cruise ships, thanks to its technical know-how and capabilities, the highly skilled workers in the Vigo Bay area, including interiors subcontractors, and its project management tools and policies.

HJB, he added, intends to go for more cruise work.

Posted 27 June 2017

© Copyright 2017 Seatrade UBM (UK) Ltd. Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Seatrade UBM (UK) Ltd.

Anne Kalosh

US editor of Seatrade Cruise Review and Seatrade Cruise News

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