Charting a course for growth at Cork’s Mainport Holdings

Shipping company chief executive Dave Ronayne knows his globe and his time zones better than most, but there’s a particular geographical location he won’t forget too soon.

One of his Cork company’s fleet of vessels was in the Gulf of Aden in early February when it lost all communication.

"We couldn't contact it for 2½ days . . . it was rather frightening," Ronayne says. Cue here images of Tom Hanks, playing the title role in the 2013 piracy thriller Captain Phillips. For a time, the owners, Mainport Shipping, did fear that a few uninvited visitors might have boarded.

The 54m-long Mainport Cedar is a new ship, built to supply the oil and gas sector and with accommodation for 40 people. However, this charter was for the United Nations (UN) World Food Programme in Yemen.

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The World Food Programme has been involved in a humanitarian disaster that has left up to 80 per cent of the population severely short of food and medical supplies, due to conflict between the Yemeni government of president Abdrabbuh Mansour Hadi and those allied to the Iran-backed Houthi rebel movement.

“Part of the contract involved using our ship as a safe base for staff and for storage, and so it had four armed security on board. At this point, it was en route from Djibouti to Yemen,” Ronayne recalls.

For two days, staff at Mainport Shipping tried to raise some response. The blackout was lifted, partially, when they established that one of the ship’s communications antennae was still functioning.

“We could see that there was movement, and that it was in the Saudi Arabian port of Jizan,” Ronayne recalls. “It had been boarded by Arab Coalition forces, who were concerned about telecommunications equipment and believed it to have an Iranian connection.”

It took days of intense negotiation. Once the paperwork was sorted and the ship released, Mainport's Dermot Curtin flew out to Djibouti to meet the crew, who had been detained on the vessel but were otherwise unharmed.

Passports come in many shades for Mainport’s seafarers, hailing from and working in many latitudes. The company was founded as Ronayne Shipping in 1957 by Dave Ronayne’s father, Finbarr, who sold part of his group in 1973 to Clyde Shipping in Glasgow, and then merged with existing Irish interests.

Management buyout

A management buyout took place in 1988 and Dave Ronayne was appointed to lead what had become Mainport Shipping in 1995.

As chief executive of Irish Mainport Holdings, he oversees key services on and offshore – ranging from exploration support, salvage, towage and bunkering to stevedoring, warehouse and base management.

Marathon Oil, Shell, Total, Conoco, Philips, Statoil, Hydro and Nexen have been among its customers. At any hour of day or night for the past two decades and more, a Mainport vessel has been weaving figures of eight around the Kinsale gas field as a "mother ship" for support, supply and safety. Its tugs also supply towage expertise in the Shannon estuary to ESB Moneypoint, Aughinish Alumina and Foynes Port.

"We have three tugs in the Shannon – the Celtic Isle, Celtic Rebel and Celtic Fergus – and Moneypoint is our biggest customer, "he says. "We also work for Aughinish Alumina, in Foynes, in Fenit, and when Liebherr is moving its cranes we are assisting with berthing."

Ronayne, an accountant by training, says he prefers to remain on dry land, but speaks with all the enthusiasm of a Corkman at home on a rolling deck when describing the work of the company fleet.

“I meet bankers from time to time, and I ask them how does a ship stop,” he laughs. “Think of something large, and how it has less control when it is slowing down.

“Ships these days are so big that if they hit a jetty at any speed, they will cause serious damage. Our tugs have 360-degree-directional steering to push, pull and nudge the big hulls sideways on.”

Spot of bother

The tugs come into their own during bad weather when, inevitably, ships of all flags get into a spot of bother, or worse off this coastline.

“On the television and radio, you’ll hear all about the Irish Coastguard, but the insurance company for the ship has already been on the phone to us,”he says.

In March, 2011, for instance, one of its tugs refloated a German-owned cargo ship which ran aground off Rossaveal, Co Galway.

And just before new year's eve in 2013, another of its tugs was 28 hours at sea, assisting a bulk freighter, Abuk Lion, which was en route from Aughinish in the Shannon Estuary to St Petersburg in Russia with 7,500 tonnes of bauxite and 100 tonnes of engine oil when its main engines failed.

“We don’t blow our trumpet, because it is dangerous work for the crew, who will be paid a bonus for the salvage, but who are at the sharp end if something goes wrong.

“We are the biggest private tug and supply ship operator in Ireland, but the Irish market was too small for us to grow and so we had to develop internationally in the Far East, India, Yemen and the North Sea,” says Ronayne.

Its fleet of supply ships bear names similar to the former vessels owned by State company Irish Shipping, which one of its former managers, Capt Dave Hopkins, had worked for. The Mainport Cedar and Mainport Pine were built at $16 million.

“No Irish bank would get involved,” Ronayne recalls. “We were just that bit too big for Irish banks and too small for the US financiers,” he says. “Eventually, ABN financed us.”

“Support”, for seismic surveying, drilling and extraction of hydrocarbons, is a term that covers a multitude, as he explains. “For instance, when Exxon was drilling off Kerry for 120 days, we took care of everything,” he says.

“That might extend from supplying office space for the oil company upstairs here, to meeting crew at the airport, to clearing imports of everything from parts to explosives. It is flat out work for nine months and then the company hits its target depth, there is no oil or gas, and it all comes to a dead stop.”

Health and safety is a key part of the culture. “Every contract involves a comprehensive audit that can take up to two days and more, and extends to ensuring we have “reverse in” signs in the car park,”he says.

The company is also audited by agencies supplying crew, he points out. that Mainport prides itself, he says, as a family firm on the emphasis it places on staff welfare, especially in an industry which has a mixed reputation for same.

“The government of the Philippines – dubbed the “crewing capital of the world” with some 300,000 seafarers – will not permit its nationals to work for an agency that does not have its approval, “he says. “We, in turn, recognise the value of skilled crew who have to deal with problems at a 5,000 mile remove from us here in Cork.”

Mainport is situated just several miles away from the National Maritime College of Ireland in Ringaskiddy.

“We taken on cadets during their four-year training and pay them, and we have had some very good captains, “ he says. “Unfortunately, Irish crew are not always available for our type of rotation which, due to the distances involved, could involve a four months on and four months off roster.

“We have always focused on term contracts, and we don’t do the spot markets that other shipping companies rely on,” he says.

The UN World Food Programme contract came at a fortuitous time, as the downturn in the oil and gas industry hit, and the company had to dispose of several of its ships.

“The market we relied on has shrunk, but then this business tends to be cyclical in nature.

Sharing risk

“We have operated a lot of joint ventures over the years, sharing the risk and reward, introducing different skill sets , availing of local knowledge and expertise and expanding with less risk into new geographical markets,” Ronayne explains. Such ventures included Havilla in Aberdeen, Scotland, and Sartor in Bergen, Norway.

The Norwegians bought out the 50 per cent Mainport stake in 2008, and the company made a “very good profit”, he says, pointing out that his company has “not been slow to sell if it makes strategic sense with a good exit”.

“In 2008 we then set up a new joint venture called Caspian Mainport International, and we built this up to 16 vessels, including barges, tugs, supply boats and cruise boats . This was very successful and we needed to expand when the banks were not really open for business,” he says.

“Our joint venture partner Richard Keisner, based in London, introduced some new Greek shareholders who introduced $ 10 million in new cash , and we therefore could buy three more ships for future contracts ,”he recalls.

“We were not involved in day to day operations, even though all accounting and banking was controlled from Cork . The region is a difficult and challenging location and the Greeks were thinking of a rights issue which would have diluted our shareholding anyway,” he explains. “So it was easier for us to sell at a good margin in 2012 .”

In 2013, the company also sold its South African interest, Mainport Africa shipping, to local management.

“Our turnover was close to €70 million at that stage,” Ronayne says. It has since fallen to around €40 million, and the company’s plans to grow its seismic support business worldwide have been put on hold.

“The collapse in the price of oil has stalled all such ambitions,” he says, “but we are fortunate that we do have long-term contracts for our existing new build ships , which will allow us to be in a strong position to again grow our business when the market recovers .”

He has attended the conferences hosted by the Marine Institute as part of the "ocean wealth"strategy initiated by former marine minister Simon Coveney in 2012. The Harnessing Our Ocean Wealth plan endorsed by Taoiseach Enda Kenny aims to double the value of the blue economy by 2020 and deliver 29,000 additional jobs across the maritime sector.

“There has to be potential when Ireland’s stake is well below average for a coastal state, and where Singapore is a clear leader, mainly due to marine financing and leasing,”he says.

While impressed with the range of work being undertaken by third level institutions here – particularly in the maritime cluster developed in Cork harbour – Ronayne notes “much of it is still at the research stage”.

Offshore renewables have “promise”, he says, but he is not quite holding his breath.

“Ours is a quiet industry, as much of what we do is invisible to most,”Ronayne says. “Sometimes, perhaps it is too quiet.”

“I ask people how do they think their flat screen television was delivered, and they talk about trucks, and then I press them a bit more and they talk about cargo flights. In fact, some 98 per cent of our imports are transported by sea, but so few people remember this.”