Senesco Marine’s story contains drama in its early chapters – a shipyard treading water but tossed a life saver. Theme: company revitalized via acquisition.
Operational beginnings date back to 1999. Then, in 2006, Senesco Marine was acquired by Reinauer Transportation Companies LLC (RTC). Tom Johnson, vice president of business development for the North Kingston, R.I.-headquartered Senesco enterprise relates the circumstances: “RTC purchased a relatively young start-up in the shipbuilding industry, one that was left behind by former investors who encountered financial difficulty in operating the yard,” he narrates.
Indeed, RTC recognized the value of the shipyard’s Rhode Island location, as well as capabilities that could provide opportunity for growth. Senesco – its name is essentially an acronym (it was once known as the Southeastern New England Shipbuilding Corporation) – resides on what Johnson describes as a “sweet spot” on the northeastern US coast. “It’s located on the west bank of Narragansett Bay, about 20 miles south of Providence, which is a large, deep water setting used by a number of shipbuilders. Here, access to Long Island Sound [an estuary of the Atlantic] as well as the open ocean could only be restricted by two high-rise bridges. But bridge height is so far above sea level that they really represent no significant detriment to vessel construction, no matter the size.”
So, sail on sailor.
As such, Senesco could tug forward. Indeed, for many years, the location well served a variety of maritime projects related to short-sea shipping, off-shore wind energy, and ferry construction and operation (which Johnson terms a “very busy business model” in the northeast).
The purchase was more than just about location; it was a smart business move for RTC, which is a company nearly 90 years old and based in Staten Island, N.Y. and east Boston. Johnson relates: “The move arose from the latter stages of the federal government’s oil pollution act of 1990.”
That act required all tank vessels to become double hull, replacing single hull. “Reinauer, a major operator of tank vessels, had outstanding orders with Senesco’s previous owners. So, it made sense for RTC to acquire the yard and build vessels, on its own account,” says Johnson.
The deal was finalized on September 29, 2006.
Fast-forward to today: Operating as an RTC subsidiary, Senesco Marine now builds double-hulled fuel barges and tugboats and provides maritime repair and dry dock services. What was once a smaller sized shipyard that focused on building small deck barges is now a medium-sized and comprehensive operation – as underscored by its entrance into the highly competitive tug building market (Senesco built the first “Facet” tugs, which directed the company into aluminum fabrication).
In the process, an impeccable reputation was developed: The double hull ocean tank barges it produces are state of the art and OPA-90 compliant. The articulated tug-barge units (ATB) represent one more industry advancement, and these added a compelling addition to Senesco’s expanded construction portfolio.
Johnson describes the targeted market: “We’re now a shipbuilding and repair operation focused strictly on the commercial side.”
The US market, he points out, is either military or commercial. “You don’t see the two markets often mixed. With military projects, there’s a higher overhead and a great deal more paperwork.”
In other words, who needs the red tape?
“So we’ve established our position on the commercial side,” says Johnson.
Again, smart thinking on Senesco’s part: The commercial market is mature.
Subsequently, tug barge construction became a specialty. And, in the last three years – having completed its obligation to the parent company [helping to replace the existing fleet] – Senesco engaged in third-party commercial sales and construction, building floating dry docks, wind energy-related components, and extra-order tugs, says Johnson. “In addition, we pursue the newer maritime projects related to LNG [liquefied natural gas], wave energy and other development activities related to exotic cargo.”
This all involved a substantial infrastructural transition – from traditional rail carriers to water, due to the potential danger to large cities where cargo and rail cars have resided, as Johnson points out.
He adds that the Senesco operation aggressively pursues commercial customers by initiating advertising campaigns, participating in industry meetings, and providing presentations when and where appropriate. “We’ve placed our name in the commercial world and in the minds of customers that had been previously shut out,” says Johnson. “The yard is no longer a captive building program for the parent company.”
Addressing Market Needs: Infrastructure
The market is broader than you might think. While based in the US northeast region, Senesco also has customers in other areas of the East Coast, as well as the Gulf coast, and the Great Lakes region. Expansion of client list relates to infrastructure. “Trends have shifted due to concerns about highway congestion, particularly along coastal routes such as I-95 and I-10, and even on the West Coast, with Highway 5,” Johnson points out. “Short sea shipping – that is, specialty vessels designed to carry cargo up and down coasts – have become a necessity, as they relieve congestion on aging highway infrastructure.”
Circumstances require design of new vessel types, and Senesco keeps its eye on the present and the future.
There are other factors. For one, the advent of methane, or LNG – which is derived from the fracking of shale – resulted in an extremely large volume of an effective fuel alternative that comes at a reasonable price. “That means utilities, trucks on the highway, and marine vessels,” says Johnson. Further, that means that the marine industry community has witnessed the emergence of new transportation and handling markets, observes Johnson.
For sure, there’s a large push to alternative energy, promoted by the Obama administration. Whether it involves offshore wind energy, wave energy and other sources, large steel devices of different character are being built by shipyards – and deployed by customers – which facilitate transportation and installation. “This is ongoing and developing, albeit rather slowly, and it represents a potentially large market for maritime companies such as Senesco,” reveals Johnson.
Beyond shipbuilding, Senesco engages in repair and related services. It’s a leader in all three areas:
- New construction – Senesco will work upon a current design (and build through completion), or work with a client’s concept and architect a completely realized design that meets all needs.
- Repair – Senesco’s repair yard handles all in-the-water and out-of-water repairs, ranging from regulatory body scheduled inspections to full vessel retrofitting. It operates on a three-acre site and houses the Leslie G, a dry dock that boasts a capacity of up to 4,500 tons. Considerable available pier space provides customers room for topside work or daily wharfage.
- Shipyard Services – In this area, Senesco Marine employees, managers, fitters, welders, outside machinists, and engineers who contribute to the company’s outstanding reputation for keeping the highest quality vessels in the marine workplace.
It’s amazing that all of this occurs in one location – but maybe not so amazing when you consider all of the capabilities and how efficiently all property is used. “It’s a medium sized yard with a footprint of about 28 acres,” describes Johnson. “Out of necessity, each acre is well used with regard to construction and component flow.”
Further, the parent company continually makes substantial investments into the shipyard, resulting into the most efficient methods and deployment of the most advanced equipment. This not only keeps Senesco competitive but has resulted in substantial growth.
Johnson provides an example: “To expand the yards capability, we recently finished a 120-foot wide in launch-way facilitated by nomadic transfer of vessel from the shore into the water. This will allow us to build larger vessels. We’re looking in the neighborhood of 550-foot length and 110-foot width.”
Considerable dimensions – but growth is further underscored by the ever-expanding workforce. Senesco currently employs 300 to 400 people – and the company’s investments also takes in this highly valued resource – offering continuous training (e.g., weld school and development program).
Ship of State: Confidence Reigns
Ongoing efforts enable Senesco to provide customers incomparable quality and on-time delivery. The vessels produced – and the company itself – is built upon integrity. “The yard has found its niche,” says Johnson. “Now, we’ll continue expansion, according to plans, into new commercial areas. We’re quite confident we’ll succeed.”
If the past is any indication, Johnson’s – and Senesco’s – confidence is well justified.