Caldera Targets Newcomers: As Damen Gears Up for Growth

After years of futile efforts to work out a deal for financing through local banks, the Curaçao Drydock Company, (CDC), has recently signed an agreement with Damen Shipyard Group to take over all its operational activities.

TEXT FARAH DIBAH AYOUBI

Getmar Caldera, Managing Director of CDC is now smiling as he takes calls from numerous seriously interested parties eager to establish their services on the premises. “Finally we have the opportunity to turn the CDC into the leading company we always knew it had the potential to be,” notes Caldera. The change in Caldera’s outlook is mostly attributable to the signing of the agreement on September 9th with Damen Shipyard Group – which re-opens doors everywhere. Soon Damen flags will be waving in our historic dry-dock with a newly established company called, Damen Shiprepair Curaçao, that will take over the operational activities of the CDC for the next 20 years with the possibility to extend it a further 5 years.

A Revitalized Champion
The concession agreement between Damen and CDC introduces a floating dock that is projected to bring an additional 30% capacity, and also injects US$40 million in infrastructure and training facilities for personnel. Damen Shiprepair Curaçao will become part of the Damen Shiprepair & Conversion Group which currently operates 40 dry docks in 15 shipyards around the world. Like a proud father, Caldera is extremely satisfied to see that the company, which had struggled for a long time despite its overwhelming potential to become a champion in the industry, will now finally do its people, the island and our unique harbor justice. The facilities of CDC currently include 2 graven docks and approximately 2000m of repair quays outfitted with 13 cranes. Damen will install a third dock, thereby considerably increasing its capacity. The CDC has been looking for avenues to invest and expand for a long while now. This strategic partnership brings an end to the struggles, attracts fresh capital, new business spinoffs and is set to restore the docks to their ‘champion’ status.

In 2009 the CDC was already in dire straits. Damen was participating in negotiations and close to an agreement, but just when negotiations were taking a positive turn, a new Government Minister was installed – with differing views than his predecessor. The new leadership opted for a ‘do-it-yourself’ approach, believing that the dry-dock company could and should work its way out of the trenches without the assistance of any foreign investments. Unfortunately, this didn’t work out as planned. The company sank into further debt, and the much-needed investments were hard to come by. Despite its precarious situation, Caldera accepted the challenge and joined the CDC staff in 2012 as the Facility Manager, and became the Interim Managing Director of CDM Holding, NV. in January 2014. After a challenging start, which included the restructuring and upgrading of many internal processes, he then looked towards a complete company-wide turnaround.

His efforts were soon met with reward, such that by his first year in the company as Facility Manager, the company was breaking even. At this juncture, Caldera together with the turn-around team lead by Mr. Henry Neoman, approached the local banks for financing in order to invest in the necessary measures for growth, however they were turned down by all the banks. The significant debt of the company and previously volatile scenarios were making it hard for CDC to get a loan. Some were only willing to finance his plans if the government would guarantee the loan sum, and the government was not willing to do so. Believing in the potential of the company, Caldera went back to the drawing board, despite rumblings within the local community of closing the dry-dock.

Impact Study
At that point a Multi-Disciplinary Project Team, (MDPT), was formed to find ways to overcome the struggles of the company. A key component of the efforts made by this team, was an Economic Impact Study conducted by Maxwell Silver to assess the economic contribution of the CDC on the local economy of Curaçao. The study analyzed the potential of Curaçao’s dry-dock and provided valuable insight into these 3 main scenario’s:

• What would be the impact of removing the dry-dock from Curaçao’s economic structure?

• How would things look if everything stayed the same?

• How would things look with a major investor on board?

By clearly defining what was virtually obvious, this study ended the insistent rumblings in the community saying that closing the company was the best solution. The economic impact on Curaçao’s economy, in terms of employment, contribution to the Gross Domestic Product, (GDP), foreign exchange reserves and tax revenues, was undeniable. The study also served to illustrate the amazing opportunity for growth given the right investor coming to the table and along came Damen again.

The MDPT has done an incredible job in solving the immense problems that had to be overcome to realize this deal with Damen. Thanks also to the Minister of Economic Affairs, Eugene Rhuggenaath, and the full cooperation of the Curaçao Government.

Game Changer
“It’s funny how things work out over time. At first I wasn’t very keen on the idea of Damen at all. In the past I’d heard of their plans to use our facilities as a service point for their ships in the area. I really didn’t see our strength [being utilized] there. Our team has a reputation for creating amazing, even miraculous, steel work solutions. We are a strong and forceful company, and to me this sounded like taking a bull and making it work like a sheep. I had other plans for CDC. I had my own vision laid down in a plan that was again turned down by the banks and I was frustrated by our inability to get any commitment. But I was sold as soon as Damen presented their plans this time around. Their vision included the same 3 key pillars that our plan was also based upon: putting our people first, focusing on growth and capitalizing on our strengths. It was then that I knew that we had found our investor. Immediately, doors started opening. Maduro & Curiël’s Bank granted financial backing without any guarantee from the government, and a number of companies overseas are ready to establish themselves here on our premises, next to Damen, to further increase our range of services offered,” Caldera notes with a smile on his face that is heartwarming.

What’s Next for CDC?
With everything finally moving in the right direction now that Damen is taking over operations of CDC, NV: all CDC personnel are being transitioned over; and the government is granting Damen and the CDC full eZone status, (3.5% tax), Caldera can now shift focus towards utilizing the lands of the peninsula that the dry-dock is currently occupying. The deal with Damen involves lease holding 70% of the land from CDC – which leaves 30% for CDC to develop for new business and other types of affiliated products and services. This is a much-coveted 30%, with many companies showing keen interest in establishing themselves here and offering such services as: supplying ship interiors, providing specific types of motor repairs, specific cruise ship repairs, etc. This will no doubt serve to boost Curaçao’s economy by offering employment and other commercial opportunities.

Things are Moving, Curaçao
Several Damen officials have already been dispatched to Curaçao to start preparing more definitively for the work that needs to be done and for the restructuring of the dock company following the finalization of the contract. The Director, Production Manager and Commercial Manager are conducting preparations while awaiting formal closing, and are already offering advice and help when needed. There’s also an engineer here as Damen is currently contemplating plans to refurbish and expand the current office building, or build a new building, in which all departments can fit together under one roof. The cooperation between entities to fulfill the agreements set forth in the contract, is moving swiftly while government officials are feverishly working to finish the paperwork needed for the closing in December.

Caldera sees a brilliant future for CDC, Damen and the dry-docks. “Our dry-dock operations have such huge potential. The addition of Damen has all the ingredients to fully utilize and grow that potential. The next years will bring a new impetus to our harbor and the spinoffs will supersede expectations. The projections of Damen are very positive, but I believe they are still too conservative. I am confident that we will top them by more than 50% to 100% in the first 5 years,” predicts Caldera. Seeing the excitement and fulfillment unfold through Caldera’s eyes, one cannot help but feel grateful for all who have worked to make this a reality for both the drydock and for Curaçao.