After the Russian invasion of Ukraine, Damen Shipyards Group spoke of a ‘split’ and a ‘moral dilemma’. Was it still possible to build ships for the Russians? On Saturday, the Dutch family business with customers in Ukraine and Russia decided to stop trading with Russian customers. And because of the war in Ukraine, Damen will not sign new contracts for ships to be delivered to Russian owners.
Damen does not want to mention any amounts, but the supplies to Russia would be hundreds of millions of euros. Journalism research platform Follow the Money found that Damen also sold superyachts like Here Comes the Sun to Russian billionaire Alexander Dzahaparidze, named after George Harrison’s famous song. Dzahaparidze had two more ships built that refer to songs by The Beatles, Heesen Yachts supplied the Let it Be.
financial blow
Damen would build two more yachts in Vlissingen for Russian customers. The severing of ties with Russia therefore directly affects Damen’s business operations. “It is a financial blow, a huge blow if this is never started again,” said spokesman Robin Middel. ‘We also build ships that are specifically suitable for the extreme weather conditions in Russia, such as drifting ice. You don’t just sell them to other clients.’
The ‘moral sense’ ultimately wins out over the money for Damen. Middel: ‘It was not a light decision, it penetrates the capillaries of the company. But we have people in a dangerous situation in Ukraine and at the same time deliver to Russia. That is incompatible, and the sanctions left us no other choice. We’ll be collecting the shards in the coming weeks.’
intimate bond
Does that also apply to other shipbuilders who have built up a close relationship with their Russian clientele? The Netherlands has about a hundred shipyards, of which 22 superyachts are built. In this sector, the Netherlands is in the global top three with an annual turnover of 1.8 billion euros in 2020. In that year, orders were accepted for 2.15 billion euros. According to figures from Netherlands Maritime Technology, the order book grew to 5.38 billion euros from the end of 2020 and thirteen yachts with a value of 500 million euros are under construction.
Feadship – with a turnover of 700 million euros – builds four to six superyachts a year with its subsidiaries Koninklijke De Vries and Koninklijke Van Lent at shipyards in Aalsmeer, Kaag, Makkum and Amsterdam. The Anna, the ship of Dimitri Rybolovlev, owner of the French football club AS Monaco and certainly not a friend of Russian President Putin, is one of Feadship’s showpieces.
The market leader in the Netherlands does not go as far as Damen to break through with Russian clients. Farouk Nefzi, marketing director, limits himself to stating that Feadship follows international laws and regulations. ‘And that also applies to customer acceptance. We are royal, morality and ethics are of paramount importance.’
Floating Castle
More than ever, the moral aspect weighs on shipbuilders. Superyachttimes.com calculated that 9 percent of all superyachts are owned by Russian oligarchs. Many of them were built in the Netherlands. In the warehouse of Icon Yachts in Harlingen, the Galactica Cosmos, the enchanting superyacht with a value of 100 million euros, is waiting for completion.
It took shipbuilder Heesen Yachts a few days to transport the floating castle from Oss to Harlingen, because the high water prevented it from passing under a couple of bridges over the Maas. There is little chance that the buyer will have access to the ship quickly. The Galactica Cosmos would be owned by Vagit Alekperov, with his investment fund Morcell Ltd a major shareholder in Heesen and also chairman of the Russian oil group Lukoil.
According to Quote Alekperov and his Russian business partner Leonid Fedun took over Heesen Yachts from Frans Heesen in 2014. The Russian born in Azerbaijan has already done business with Heesen: in 2012 he bought the Galactica Plus for an undisclosed amount and in 2016 the Galactica Super Nova for 75 million euros.
Language of instruction Russian
Heesen Yachts shows off its superyachts ostentatiously, Russian is one of the official languages on the website. With a length of 80.07 meters and a top speed of 29 knots, the Galactica Cosmos is the largest and fastest aluminum motor yacht. The ship has a full-fledged helipad that can be transformed into a movie theater. In addition to the beach club, Alekperov’s guests can enjoy a swimming pool with a waterfall and a glass bottom.
Heesen denies that the Galactica Cosmos would have been seized. “Our major shareholder is also not on the list of people who fall under the sanctions,” said Sara Gioanola, spokesman for Heesen. She emphasizes that Heesen Yachts is a Dutch company that is bound by Dutch legislation.
Unlike Damen Shipyards, Gioanola does not foresee any financial consequences for Heesen. ‘Our order book is large enough. The war is tragic for everyone, but the sanctions will certainly cost us Russian customers.” The question of whether Heesen Yachts is looking for an owner other than Alekperov or whether it will terminate contracts with Russian clients remains, for the time being, unanswered.
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