Trends & challenges

The business accesses opportunities across the offshore, commercial and naval markets of the marine sector, which provides some immunity from individual market fluctuations. Our current order book and broad involvement in these global markets puts the business in a strong position, given the current uncertainty in the marketplace.

We estimate the market opportunity in the sector going forward to 2028 to be worth in the region of $280billion, of which about 60 per cent represents original equipment sales with the balance being in services-related activities.

For specific vessels, like product tankers and offshore support vessels we can supply the ship design, engine and propulsion system, to the motion control system, bow thrusters and integrated bridge with dynamic positioning, which can be up to 50 per cent of the value of the ship.

The market is moving to more integrated systems and the recent acquisition of Scandinavian Electrical Systems enable us to offer a greater range of energy-efficient propulsion system options for these vessels and deliver solutions closely matched to the customer specifications.

Through-life support

Our UT-Design vessels are equipped with Rolls-Royce products and are also often used as platforms for complex deck machinery capable of moving the anchors that moor today's large semi-submersible platforms to the sea-bed. This range of products installed on a single vessel gives us the opportunity to look at ways of delivering lifetime support that will add value for our customers, as it has in the civil aerospace sector.

An innovative contract that provides guaranteed engine availability and covers all maintenance costs for a fixed fee for each hour of engine operation is already in place with the UK Royal Fleet Auxiliary (RFA) for the air training ship RFA Argus. We are also supporting the reactor plants that power the Royal Navy's submarines for ten years in a contract worth up to. £1billion.

Rolls-Royce and the MoD have formed a joint team and set agreed service levels. Payments will result from meeting those targets rather than through individual contracts. We will continue to build on this experience.

Energy efficiency

The trend towards more environmentally-friendly marine products is set to advance at a steady pace. We aim to be at the leading edge of available technology and will continue to invest in our product portfolio to ensure we can provide both fuel-efficient and environmentally-compatible solutions for our customers.

Our PROMAS integrated rudder and propeller and Azipull thrusters are already delivering significant fuel savings by improving propulsion efficiency, and our Bergen diesel engines meet IMO Tier 2 emission levels scheduled to come into force in 2011.

The recent volatility in energy prices and its impact on the global economy has only served to highlight the fact that the peak of global oil output could be within the next 20 years. Therefore the quest to discover new reserves, more environmentally friendly ways of using energy, and more energy-efficient vessels remains tomorrow's challenge. We are putting our innovative energies into developing solutions that will meet these challenges.