Marine 2022
The Marine Division specializes in solutions for shipping customers, including shipping companies, shipyards, engine manufacturers and companies involved in offshore oil and gas exploration.
Share of Group order intake
Aftermarket’s share of the division
10.6%
Operating margin
19,442
Order intake, SEK million
16,370
Sales, SEK million
1,741
Operating profit, SEK million
Gearing up the portfolio transformation
Despite a moderate ship contracting level in 2022, order intake grew 39 percent in 2022 driven by increased demand for environmental solutions, a strong offshore market and good development in services. As our portfolio broadens and with the increased complexity coming from new fuel solutions in recent years, Alfa Laval continues to increase content onboard the vessels.
Sameer Kalra
President, Marine Division
As expected, the ballast water retrofit opportunity is now gradually coming to an end as the 2024 regulatory deadline draws closer. In combination with a lower share of tankers in the shipbuilding mix, which is resulting in low capacity utilization in the marine cargo pumping business, profitability came in at 10.6 percent for the year. As a consequence, a programme to adjust the operational imbalances was launched during the fall. The division was reorganized from five business units to four during the year and activities were taken in the relevant business units to ensure a cost structure and product portfolio that is aligned with the market opportunities going forward. Additionally, footprint related improvements were implemented at our manufacturing sites.
The journey to carbon neutrality
Like many other industries, shipping is aiming to become carbon neutral and lessen its environmental footprint. This development is linked to stricter requirements from the International Marine Organization, the EU and local regulatory authorities, but also increasingly from ship owners, end customers and those financing the industry. Efforts to increase the availability of carbon neutral and zero carbon fuels for shipping has gained momentum and a number of new projects to deliver green methanol and green ammonia have been announced during the year. There is a growing consensus in the industry that multi fuel-solutions will be the transitional solution on the journey to net zero emissions and that energy efficiency will be an even more important element than ever before.
Carbon-free shipping
Shipping currently accounts for around three percent of total global greenhouse gas emissions. The industry’s goal is to achieve carbon neutrality by 2050. This will be achieved in a number of ways, including by ensuring the energy efficiency of the technology used on board, through the development of new and less polluting ship fuels, and by investing in wind energy and other new sources of power in global shipping.
The division has a range of solutions that can help reduce the environmental impact of shipping, including products to boost energy efficiency, ballast water treatment systems, technology to reduce sulphur levels in ship exhaust gases or to clean onboard bilge water.
The Marine division is helping to facilitate this transition for our customers through the products and technical solutions we offer. During the year, we launched the E-power pack which harnesses waste heat and other surplus energy on ships and converts it into electricity. The Air Lubrication system was also made commercially available, which reduces the hull friction related drag with a layer of micro bubbles below the vessel. Furthermore, we continue to progress in the development of wind propulsion and expect to have a full-scale land-based prototype in operation in 2023.
A growing digital offering
In 2022, two acquisitions were finalized to strengthen the portfolio. Scanjet in the field of sustainability and Bunkermetric in digitalized services. Scanjet offers a portfolio of solutions around tank management including efficient tank cleaning to improve vessel utilization, which will complement our existing cargo pumping systems portfolio. Bunkermetric is a digital product suite to optimize bunker procurement that broadens and strengthens our StormGeo offering of digital solutions, which utilize advanced data analytics to support decision making around weather sensitive operations.
In addition, StormGeo continues to organically develop its portfolio of digital solutions to improve the safety and asset performance of sailing ships. Our parametric rolling solution, which reduces risk to cargo and vessel in adverse weather conditions and the CII indicator, which enables a vessel to monitor and report its carbon intensity as per the IMO 2023 guidelines are two relevant examples of recently developed digital solutions from StormGeo.
A customer portal was launched last year to monitor Alfa Laval’s pumping equipment in real time has been very well received and now has in excess of 1,000 ships using this platform within two years of launch. As with other digital services, the portal helps optimize use, simplify maintenance and in the longer term, improve overall operating efficiency for the customer.
Global trade
Shipping is an integral part of the supply chain for most industries, making it a backbone of global trade. Shipping’s ability to offer economic and efficient long-distance transport puts it at the centre of the world economy. Today, it is estimated that an overwhelming majority of goods, around 80 percent, are transported by ships. Alfa Laval’s long-term relationships with shipowners, shipbuilders and operators create opportunities as shipping, like most industries, is continuously adapting to a growing population, new demands and more sustainable ways of operating.
Alfa Laval has been supplying the marine industry with equipment for over a century. It started with the supply of separators for purifying lubricating oils, but has since evolved to include heat exchangers for freshwater production, pumping systems for efficient loading and unloading and a wide range of other products.
Significant end markets
68%
Proportion of the division’s order intake
Shipbuilding and shipping
There is a wide range of products and systems available for installation on board ships. These include fuel purification and treatment systems, liquid cargo pumping systems, steam boilers, freshwater generators, inert gas systems, lubricating oil treatment and tank cleaning systems.
18%
Proportion of the division’s order intake
Offshore
Technology and solutions for oil and gas platforms, including fired and waste heat Boilers systems and emergency power generators, as well as pumping systems used for firefighting or to pump seawater for onboard applications.
6%
Proportion of the division’s order intake
Engine power
Engine-generated power is used in off-grid locations, as back-up power during power outages, to handle peaks in demand when the grid is insufficient or as a complement to solar or wind power. Alfa Laval offers several products, including modules for fuel treatment, waste heat recovery boiler systems, separators for cleaning crankcase gases and heat exchangers for various cooling applications.
A new era in shipping
The shipping industry is in its most important transition ever – towards decarbonization. The International Maritime Organization (IMO) has set the target to cut vessel-related greenhouse gas emissions by at least 50 percent by 2050. Since ships have a lifetime of 20 years or longer, zero-emission vessels must begin entering the global fleet by 2030.
Alfa Laval is driving the change by investing in R&D and implementing new solutions. At its Test & Training Centre in Aalborg, Denmark, a unique research facility with 2,800 square metres of testing space, the company is developing, testing and validating new products for improved energy efficiency, as well as new types of fuels including LNG, biofuels, methanol and ammonia.
Through partnerships and by teaming up with other experts and technology providers, Alfa Laval will speed up the pace of decarbonization. For example, Alfa Laval and its partners will deepen the understanding of ammonia combustion and lead the development of needed onboard technologies. In 2022, the company received approval to begin testing with ammonia, which is expected to commence in early 2023.
During the year, Alfa Laval also joined the Methanol Institute, which works to protect existing markets for methanol while promoting the growth of emerging energy markets. Alfa Laval is supporting it with essential technologies and has received the industry’s first approval in principle (AIP) for firing boilers with methanol. Because methanol changes the energy balance on board, Alfa Laval is also providing ways for vessels to become more energy efficient.
One option is the Alfa Laval E-PowerPack, a product that converts waste heat into electricity, which can remove many tonnes of CO2 per year and significantly lowers fuel costs.
Partnerships are important to develop new innovative solutions. Last year Alfa Laval announced a joint venture with Wallenius to develop technology for fully wind-powered vessel propulsion based on wing sails. The aim is to launch the first Oceanbird vessel by 2026.
Alfa Laval will also be a technology partner in a project for the Global Centre for Maritime Decarbonisation (GCMD) and together with other partners investigate the on-board capture, storage and off-loading of carbon dioxide (CO2). Alfa Laval will bring to the project technological and engineering expertise to help understand the challenges and opportunities of deploying carbon capture technology on ships. The project will be another big step towards Alfa Laval’s decarbonization roadmap.
Last year, Alfa Laval acquired StormGeo and its digital services. By utilizing metrological data to help with route planning, it is possible to optimize energy usage – and thereby reduce emissions. The service also improves safety by enabling ships to avoid storms and bad conditions. In the coming years, digitalisation and connectivity will play an important role in helping the shipping industry in its transition towards decarbonization.