Icebreaker initiative means significant opportunities for Finnish industrial policy

On 11 July 2024, Finland, the United States and Canada published a trilateral declaration concerning cooperation in the production of icebreakers (ICE). The initiative was signed by the Presidents of Finland and the United States Alexander Stubb and Joe Biden and Prime Minister of Canada Justin Trudeau.

By this initiative Finland, Canada and the United States make a commitment concerning deeper collaboration in building icebreakers in each country by sharing expertise, knowledge and competence. The initiative gives Finland the opportunity to strengthen its position in the North American supply chain of critical infrastructure.

The ICE initiative is a highly significant opportunity in terms of Finland’s economic, employment and industrial policy. The Ministry of Economic Affairs and Employment believes that the agreement will provide a long-lasting boost to the Finnish maritime industry cluster and its leading shipyards. 

“The declaration gives Finland the opportunity to offer, in a very concrete way, top-class Arctic expertise to be used by our allies and partners. At the same time, we can effectively respond to the common critical needs in the Arctic region,” Minister of Economic Affairs Wille Rydman says.

Next, Finland, the United States and Canada will start negotiations on the concrete implementation plan of the declaration. In Finland this work will take place under the lead of the Ministry of Economic Affairs and Employment and in cooperation with the Ministry for Foreign Affairs and Ministry of Defence.

Finland has strong maritime cluster and top-class icebreaker expertise

From the perspective of the geopolitical situation and strategic autonomy, it is important that Finland has a viable maritime industry cluster in future as well. Finland’s NATO membership and the increased opportunities for international cooperation related to icebreakers and other special purpose ships this has brought along can significantly improve the operating conditions and growth of the Finnish maritime industry.

“The future of the Finnish shipyards mainly depends on the development of the cruise and other passenger ship markets. Because of the geopolitical situation, completely new opportunities could open for Finnish icebreaker expertise, where we are among the best in the world,” Minister Rydman says. 

Once the initiative is realised, the opportunities offered by the agreement to be negotiated can be substantial. The estimate for the need of the western allies and partner countries for the next decade is in the order of several tens of ice-class government vessels. The building capacity of Finland’s maritime industry over the next decade is also estimated to be significant.

Potential of Finland’s Arctic expertise known for long time in North America

The potential of Finnish shipyards as suppliers of icebreakers to North America has been discussed for a long time. A step closer to making this a reality was taken in November 2023 with the change of the owner of the Helsinki shipyard. The State of Finland was not a party to the transaction but adopted a positive position on the arrangement from the very start of the negotiations and participated in the negotiation process. Minister of Economic Affairs and Employment Rydman contributed to the change of ownership by negotiating with the Minister of the Economy, Innovation and Energy of Quebec Pierre Fitzgibbon, and since the transaction was completed he has supported the export efforts related to the icebreaker industry. 
 
Finland’s strong maritime industry, port and ship-building expertise was also showcased during Minister Rydman’s visit to Canada and the United States in March. He was accompanied by a business delegation of 30 people from 20 different companies and organisations.

Inquiries:
Petri Peltonen, Under-Secretary of State, Ministry of Economic Affairs and Employment, tel. +358 50 62 663
Lassi Noponen, Special Adviser to the Minister of Economic Affairs, tel. +358 50 407 6033

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Attachment to the Ministry´s press release 11th July 2024

Finland’s maritime industry cluster – general facts

The maritime cluster is highly important for Finland’s national economy and foreign trade. A survey published by Finnish Industry Investment Ltd in July 2023 shows that a vibrant ecosystem has been built around the domestic maritime industry.

The Turku shipyard has a major role in Finnish maritime industry as more than half of the companies in the sector trade directly with it. At Meyer Turku the key focus is on building large cruise ships that involve new and innovative solutions and concepts. Rauma Marine Constructions, which runs the Rauma shipyard, is an important part of the maritime industry ecosystem, and the company has a key role in the procurements of the Defence Forces and in building icebreakers. 

The difficulties caused by COVID-19 to the maritime industry have mostly been removed, even if the delays and failures to meet deadlines in the building plans of ship projects during the pandemic still have some impact. The impacts of Russia’s war of aggression against Ukraine are also still reflected in the companies. 

Contacts with North America became even closer with the change of the owner of the Helsinki shipyard as the Canadian Davie Shipbuilding acquired the assets of the Helsinki Shipyard Oy in November 2023. Davie Shipbuilding is specialised in building heavy-duty ice-breakers and government vessels. 

FACT BOX

• Finland is among the world’s leading countries in ice-breaker design, shipbuilding for the polar regions, ice data technology and fleet operations. Finnish companies have designed 80% of the world’s ice-breakers and 60% of them have been built at Finnish shipyards.
• Finland is the only country in the world that offers ice-resistant products and services created through a solid and cost-efficient value chain. This comprises research and development activities, education and training, ship design, engineering, building, operating the fleets, programme management and lifecycle support services.
• With their subcontracting, the shipyards of Helsinki, Rauma and Turku account for a major part of the operations of the more than 1,100 maritime industry companies in Finland. These three largest shipyards are strong players in their respective regions and lay the foundation for the development of the whole Finnish maritime cluster. The number of employees in the sector is 30,000. The total annual turnover of the sector is estimated at about EUR 9 million.
• The Finnish maritime industry operates with a model of a markedly extensive and fine-tuned partnership and subcontracting network. At its best, ICE collaboration would open markets for technology, system and component suppliers for vessels built in the United States and Canada and for the modernisation of shipyards. Very likely a key focus in the collaboration would be on design expertise and various kinds of technology solutions.
• Besides the three shipyards, a large group of other companies in the Finnish maritime industry cluster would benefit from the collaboration. Two-thirds of Finnish maritime industry companies trade directly with the shipyards. At the same time, they are highly experienced players in the international market.