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Ferries will continue to be built at Flensburger Schiffbau-Gesellschaft (FSG), but will Irish Ferries new ship?

The future of Flensburger Schiffbau-Gesellschaft in the medium term is in building Ro-Ro ferries. That is according to the message delivered by management at a workers meeting on Sunday April 26. As previously reported, the company has filed for ‘self-managed’ insolvency. The move is specifically designed to allow the company to start from fresh without existing contractual obligations to customers and suppliers. Though an administrator will be brought in from outside the company, the company management will continue to control the business. This is a different process to bankruptcy in German law.

Investor Lars Windhorst is prepared to put money into the business through his Tennor Holding investment vehicle. Tennor Holding took 100% control of FSG last year. He has said, however, that the money should not be used on loss making contracts according to a report by NDR. Former majority owner Siem Industries is also interested in buying further Ro-Ro ferries from the yard according to the same report. Siem recently took delivery of LIEKUT, the eighth of a series of vessels built by FSG for the company to charter out. Other reports from Germany indicate Siem are negotiating a contract for up to four further Ro-Ro’s.


FSG had been making significant losses for a number of years. Notably, Siem group acquired the company for a token €1 back in November 2014 after severe liquidity problems. Those losses massively increased in recent years, however, with the yard losing an eye watering €111m in 2018. The hugely increased losses were due in part to delivery delays with Irish Ferries W.B. YEATS and the subsequent penalty payments made to Irish Continental Group (ICG). The agreed contract price to build W.B. YEATS is understood to have left little to no margin for the yard in the first place, however.

Irish Ferries' W. B. YEATS. Irish Ferries.
Irish Ferries’ W. B. YEATS. Irish Ferries.

Significant parts of the build were completed by a number of subcontractors in areas where other yards would have done the work themselves. For instance, the entire superstructure was built and largely fitted out in Poland by subcontractors. This included the manufacture and cutting of the steel sections used to fabricate the superstructure blocks. Two separate contractors fabricated and (fitted out) the superstructure, while a third (Stocznia Gdansk) supplied the steel. This is in contrast to builds elsewhere where all sections of the structure are fabricated in-house, achieving economies of scale and keeping costs down. As a single one-off build it is likely it will have been difficult to negotiate discounts with component suppliers as may have been the case in the series produced vessels the yard is more accustomed too.

Irish Ferries second order

Irish Continental Group confirmed an order for a second Irish Ferries vessel, thought to have been an option on the contract for W.B. YEATS, in January 2018. The €165.2 million contract price for the second ship (yard number 777) is said to be extremely competitive. It is likely that little or no profit would be made on that ship either given high labour and material costs in Europe as a result. The insolvency process will allow the yard to get out of a (build) contract according to the NDR report. Apart from Brittany Ferries HONFLEUR, which is being fitted out at the yard, FSG’s only remaining order is for the Irish Ferries ship.

Rendering of Irish Ferries currently unnamed second FSG new-build ferry. When ordered she was expected to enter service on the Dublin - Holyhead route in mid-2020. Irish Ferries
Rendering of Irish Ferries currently unnamed second FSG new-build ferry. When ordered she was expected to enter service on the Dublin – Holyhead route in mid-2020. Irish Ferries

Despite sharing a largely common hull form with W.B. YEATS (itself developed from FSG’s successful Ro-Ro’s), much of the equipment on the new ship differs from that specified on the previous vessel and HONFLEUR. This seemingly rules out any volume discounts with suppliers. In theory yard number 777 is still due to be delivered by the end of the current year, but no start appears to have been made on construction. Rumours that Irish Ferries have approached other yards to build the ship have also began circulating again in recent days.

Production to restart in June?

In the meantime, FSG’s owners has said production at the yard could start again as early as June. Production has currently been halted as a result of the COVID-19 Coronavirus, though much of the workforce had already been sent home before the crisis began due to a lack of work for them. In the longer term the company may look to other niches other than Ro-Ro’s, but for now will concentrate on its proven expertise in that sector. Despite making a loss on recent orders, FSG has an enviable reputation as a builder of well designed and efficient Ro-Ro freight ferries.

Tough competition

Competition from Far East shipyards is fierce in the Ro-Ro sector, while FSG’s reputation for on time delivery is in tatters with a number of builds in recent years delivered late. The current build, Brittany Ferries HONFLEUR, looks to be delivered at least 18 months after the original contract delivery date. Although margins on Ro-Ro’s are tight, the owners appear confident that there is still some money to be made (and cost savings to be achieved) in building Ro-Ro ferries. Their hope is that Ro-Ro orders will give them time to stabilise the yard and rebuild its reputation. Only then does the management team intend to potentially move on to more profitable business. At preset, however, there appears to be an oversupply of Ro-Ro vessels with a number laid up awaiting work in Europe. This was the case even before the COVID-19 Coronavirus crisis.

EPHESUS SEAWAYS, one of a new generation of DFDS ‘mega’ Ro-Ro’s. DFDS

Companies such as DFDS, Grimaldi (and subsidiary Finnlines) and Wallenius Sol also have existing orders for Ro-Ro tonnage which will create even more excess capacity when delivered. All of these ships have higher capacity than the vessels FSG has built to date, though the yard has produced a concept design for a 231.5m long 7,100lm capacity Ro-Ro series. FSG and its workforce will hope that demand for Ro-Ro vessels will increase in the near future and that vessels approaching the end of their life will be replaced sooner rather than later. The future of the 158 year-old yard and shipbuilding in Flensburg seems to depend on it.

FSG's RoRo 7100 concept design can accommodate 7,100 lane metres of freight. Flensburger Schiffbau-Gesellschaft.
FSG’s RoRo 7100 concept design can accommodate 7,100 lane metres of freight. Flensburger Schiffbau-Gesellschaft.

Steven Tarbox

Steven is a former retail professional and a ferry writer and photographer. He created NI Ferry Site as a web design project in 2014 to be a news and information source for everyone with an interest in ferries, with a particular focus on Northern Ireland. Steven is the editor of the website and looks after all of the technical aspects.
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