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ArcelorMittal and Chantiers de l’Atlantique agree long-term contract for shipbuilding steels

ArcelorMittal Europe – Flat Products has signed a multi-year agreement to supply steel to Chantiers de l’Atlantique, one of Europe’s leading cruise-ship builders. The contract is the fifth between the two partners and runs until the first quarter of 2024. It will see ArcelorMittal provide steel and expertise to Chantiers de l’Atlantique, building on partnership which began back in 2014. The strength of the relationship was recently reinforced when the ship-maker named ArcelorMittal as one of its 2019 Suppliers of the Year.

The partnership between ArcelorMittal and Chantiers de l’Atlantique began in the early 2000s, but intensified when ArcelorMittal was selected as sole steel supplier for the world’s largest cruise ship – The Harmony of the Seas. In recognition of that success, Chantiers de l’Atlantique agreed to its first multi-vessel contract for steel from ArcelorMittal.

“Harmony of the Seas was the first time that we had used a single steel supplier,” notes Bertrand Paquet, Purchasing Director for Chantiers de l’Atlantique. “That first multi-vessel agreement enabled us to meet our targets for subsequent vessels. It also gave us a chance to work closely with ArcelorMittal on areas such as quality improvement and fine-tuning logistics.”

The new agreement between ArcelorMittal and Chantiers de l’Atlantique will run until 2024

Fifth contract strengthens partnership

Subsequent agreements have strengthened the partnership further, leading to the fifth and latest contract which was signed in May 2019. It recognises the demands placed on shipyards by cruise-ship companies as Serge Hily, Sourcing Department Manager at Chantiers de l’Atlantique explains: “Ship owners
typically order a prototype and at least one sister ship. One of our major customers has placed fixed-price orders for ships to be delivered in 2025/26
with very demanding costs conditions. We need suppliers that are able to propose solutions which help us meet our targets.”

The Saint-Nazaire (France) shipyard was established in 1861

To achieve this ambitious goal and ensure they can compete against shipyards in Asia and Europe, Chantiers de l’Atlantique aims to reduce its costs significantly each year. That requires partners who can innovate their products and improve their efficiency to make the ship-building process as fast as possible.

“We fully understand the difficult business model our client faces,” says Laurent Castro, key account manager for ArcelorMittal. “We ask ourselves what we can do to help our client, what can we improve in our way of working, what can we do better. We must propose new methods, new ideas. This is essential. What may look like a small change can lead to major improvements.”

Chantiers de l’Atlantique has produced some of the world’s largest cruise ships

Resident engineer a first for the shipbuilding industry

That commitment took a giant step forward when ArcelorMittal appointed a resident engineer to represent the company at Chantiers de l’Atlantique. “At the time, we thought of a resident engineer as a purely technical person who could provide practical support and help us to evolve the range of steels we use,” says Bertrand Paquet. “But the role has changed significantly. The resident engineer is now involved in quality, logistics, the supply chain, and an ongoing ‘Factory of the Future’ project. He has also proposed a new grade for the cabin modules of our vessels which could significantly reduce the effort required to install them.”

Chantiers de l’Atlantique have also organised tours of their shipyard for employees from ArcelorMittal Gijon (Spain) where the steel for their vessels is produced. Aditya Mittal, CEO of ArcelorMittal Europe, has also visited the company’s facilities and toured a vessel. “It’s a good way to make ArcelorMittal’s people aware of our industrial challenges,” notes Serge Hily. “We’re very open to hosting more of these visits in the future.”

New agreement creates a new story between partners

The latest contract between ArcelorMittal and Chantiers de l’Atlantique recognises the investments in time and effort that both partners have made to improve. It’s also good for both sides as Bertrand Paquet notes: “The contract enables ArcelorMittal to balance production for the next five years, and mitigates the risk for Chantiers de l’Atlantique. The negotiations were tough, but we can talk transparently and frankly with ArcelorMittal thanks to our many years of cooperation. There is common trust and confidence.”

For ArcelorMittal, Chantiers de l’Atlantique is not just a customer. “Thanks to our close relationship, we know that when Chantiers de l’Atlantique face a challenge, this challenge becomes ArcelorMittal’s challenge,” says Laurent Castro. “We now need to focus on further improving our logistics, quality, and innovation. This agreement is creating a new story.”

Modern shipbuilding relies on just-in-time deliveries from partners such as ArcelorMittal

ArcelorMittal recognised as 2019 Supplier of the Year by Chantiers de l’Atlantique

Each year, Chantiers de l’Atlantique recognises the suppliers which have provided exceptional service and products in the past year. In May 2019, ArcelorMittal and 10 other suppliers were named Suppliers of the Year at a special celebration.

“ArcelorMittal is one of the best suppliers and has an A1 rating,” notes Bertrand Paquet. “The ‘A’ indicates ArcelorMittal had the best performance, while the ‘1’ indicates it leads in cooperation. Less than 20 of our 1,500 suppliers have this rating. The ranking considers reliability and quality, not just good economics.”

Pictured at the 2019 Suppliers of the Year ceremony are (from left to right) Bertrand Paquet, Purchasing Director Chantiers de l’Atlantique ; Laurent Castaing, Chantiers de l’Atlantique’s CEO; Laurent Castro, key account manager for ArcelorMittal and Serge Hily, Sourcing Department Manager at Chantiers de l’Atlantique.

All images are © Chantiers de l’Atlantique