Price is not everything

Maritime technology providers should become better at getting their customers to look at the lifecycle costs of their products, not just the initial purchase price, says Topi Vesteri, executive vice president of Finnvera.

Topi Vesteri, executive vice president of Finnvera.
With a 11 billion Euro exposure in Finnish exports, the export credit agency is able to gauge the success factors for a wide range of exports, especially in the country’s vital maritime industry. In Vesteri’s opinion, this industry has been more challenging due to overcapacity and the very global nature of its business. In addition, many banks are reducing their exposure in this sector. Export credit agencies (ECA) have been forced to fill the gap. His own ECA now offers financing in addition to guarantees.
Vesteri believes that while innovation is what makes a company competitive, sourcing and a diversified partner and customer base are equally important, as is investment in research and development.

“Competition is tough and buyers focus too much on price. They are looking for a quick return on their investment, but value for shareholders should also be important.”

Best overall package wins

“From a financier’s point of view, every party plays its own important role. The yard and the investor/operator put the whole package together. Smooth cooperation between all parties is important and best overall package wins,” he says. 

Looking at this from the Finnish and Nordic angle, Vesteri says knowledge of Arctic maritime solutions and high-value niche products such as Azipods, icebreakers, cruise ships, LNG technology and ship automation provide great opportunities for maritime companies over the next decade. 

These are examples of innovative technical solutions that have found their way onto the market as a result of close collaboration between customers, designer equipment manufacturers and the yards. The shift of focus from price-based to lifecycle cost decisions is already starting to happen among “reputable players.”
“They are focusing more on social and environmental issues and an important part of this is cost efficiency during the lifetime of the investment.”

So while technology providers may have a challenge in communicating lifecycle benefits, ultimately it is up to their customers’ technical and top management to find the best solution for their company, says Vesteri.
Photo: Finnvera
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