VIKING RESURRECTION? SRI LANKA’S MARCH OF THE VALKYRIE

Norwegian boatbuilder Jostein Viksund finds life after death on the banks of Negombo Lagoon

By Nick Hart

The boat builder was Neil Fernando, owner of Neil Marine in Negombo, and the Viking was Jostein Viksund, scion of an equally long-established Norwegian boatbuilding dynasty.

What happened next is complicated, as they say, and ended with Viksund leaving Neil Marine to set up his own yard on the other side of the lagoon, where he designs and makes similar—but radically different—fishing, leisure and lifestyle boats.

Viksund Asia, the Viksund-Neil Marine joint venture, did well—very well, in fact. But it’s Achilles’ heel was that, as a foreign-owned BOI company, it was committed to exporting everything it made to the Viksund parent company in Norway.

When a headstrong young Viking suddha joined forces with a canny, long-established Sri Lankan boat builder 20 years ago, things were bound to happen—and they did, some good, some not so good.

Viksund Asia was initially funded (via Viksund Norway) by the Norwegian aid agency Norad, which later provided millions of dollars to rebuild Sri Lanka’s fishing fleet and infrastructure after 80% of both were destroyed in the catastrophic 2004 tsunami.

That aid was later extended at the end of Sri Lanka’s 30-year civil war, a so-called ‘peace dividend’ intended to nurture an environment where ‘phoenix’ businesses such as Viksund Asia could take root and flourish. Viksund managed his upstart start-up by subcontracting work to Neil Marine, where Fernando was, and still is, the éminence grise of Sri Lankan boatbuilding, and with whom Viksund at first had a close and productive relationship.

They were, at first glance, a natural fit. For years, Neil Marine had been exporting boats to the UK and Europe, where Fernando had earlier met Viksund’s father, Erling, the headstrong supremo of Viksund Norway, who also had close links to Norad.

It was that meeting of minds (they were the same age, born on the same day, in the same year) that led directly to Jostein Viksund’s arrival in Negombo—a man with a mission to set up a boatbuilding yard in Sri Lanka to profit from the much lower production costs.

He began at AG Fishing, which didn’t work out due to a clash of personalities and quality control issues. He then turned to Neil Fernando, with whom, despite their background and character differences, it did work out—at first.Problems emerged because Viksund’s essentially gung-ho approach to business was at odds with the more conservative mindset of Fernando, who urged caution—wisely, as it turned out.

In short, while Fernando preferred the ‘tried and tested’ approach that had held Neil Marine in good stead for decades, Viksund, his Viking hair on fire, wanted change, and he wanted it now!

Thus, an irresistible force met an immoveable object, the result being frustration and impatience on one side and incomprehension on the other.

The fearsome Viking longboats, with their dragon-headed prows and crews of battle-hardened seafarers, raided and traded—aka raped and pillaged—across their known world during the 8th to 11th centuries. Give blond-haired, blue-eyed Viksund a horned helmet and battle-axe, and he could have been one of them. He might even have had Roman emperor Julius Caesar’s famed epithet in mind: veni, vidi, vici (I came; I saw; I conquered).

But the Vikings were not just ferocious fighters. They also had highly developed social structures and advanced ideas about how to temper their warrior ways to create a (relatively) civilized agrarian society. Much like the forefathers of modern day Sri Lanka, in fact.

But while the martial Vikings aspired to Valhala, the legendary hall of fallen warriors, the early Sinhalese tempered their warlike characteristics with Buddhism, enlightenment and prevarication.

The one—perhaps only—thing they had in common was that those Sri Lankan forefathers were also skilled seafarers and boat builders. The major difference was that they were not, and are still not, great innovators—except, ironically, in the case of Neil Fernando.

When Fernando launched his startup boatbuilding business 50 years ago, he pioneered the use of glass-reinforced plastic—GRP, or fibreglass—which went completely against the grain of traditional wood construction. The company also had a forward-looking management team that was one of the first to invest in what was, for its day, sophisticated CAD/CAM computer technology for design and manufacture.

Moreover, with its long-time exposure to European build and safety standards and regulations, and to European preferences regarding design, construction and performance, it was also well positioned to help Viksund Asia succeed.

The Viksund marina is a living showroom for his current fleet of leisure and lifestyle boats

So what was Viksund’s problem?
A good question, and one that he himself has some difficulty answering, in part because it involves a complicated relationship with his father, who is of Neil Fernando’s generation and of a similar mindset.

In fact, a psychologist, knowing Viksund’s background and personality, might say that he came to Sri Lanka with something to prove: That he could create a successful boatbuilding business on his own terms and beat his father at his own game. From the start, all went well, with hundreds of boats being shipped to Norway every year. But pride comes before a fall, and to make matters worse, after departing Neil Marine, that fall—that perhaps the inevitable denouement, given Viksund’s character—occurred while Neil Fernando stood watching from the sidelines. Not necessarily with satisfaction—he is by many accounts a nicer man than some give him credit for—but more in
sadness and bewilderment. Did this have to happen?

Well, yes, it did.
That’s because Viksund had built his whole solo business plan on just one customer—he had put all his eggs in one basket. And when that customer went down the tubes, his business went down with it.

The ‘customer’ was, of course, Norway, and following the global financial collapse of 2007-8, demand for new boats also collapsed, and his export market—his only market—disappeared virtually overnight.

This was exacerbated by the fact that emerging former Eastern European countries, with their cheaper production costs on a par with those in Sri Lanka, were by now also getting into the boatbuilding act, and were poised to beat Viksund at his own game. So that might have been the end of Viksund Asia, but—maybe due to his Viking spirit—it wasn’t. Because by this time, apart from his financial investment, he also had a Sri Lankan wife, a young son (also named Erling), a workforce and his own self esteem to worry about. A lot to lose, in other words.

As Benjamin Franklin once said, and he should know: “Out of adversity comes opportunity.” And to quote Aristotle: “The beauty of the soul shines out when a man bears with composure one heavy mischance after another… because he is a man of high and heroic temper.”

Whatever else Viksund lacked, and still lacks, he had and still has, the “high and heroic temper”, even if today it has been (somewhat) tamed and circumscribed by 20 years of doing business in Sri Lanka. Adversity squared, you might say.

A Viksund whalewatching/adventure boat being refitted with the latest generation water-jet engines

So what to do?
The immediate priorities were, first, to attract local customers, and second, to create a regular and dependable revenue stream. For both, Viksund turned to the company’s biggest asset—its 100 metres of prime lagoon-side waterfront.

Financed by overseas money, he created a marina (in effect, a showroom for his leisure and lifestyle boats), plus a resort and watersports centre, both of which he hoped would attract paying customers who would also buy his boats.

The plan worked, and is still working—after a fashion. While it enabled him to weather the immediate storm, it was barely enough to finance the new generation of boats that would best suit the local market, particularly for tourism, whale-watching and various marine lifestyle activities. But with a bit of hand-to-mouth dodging and weaving, he managed it—and is now hoping to reap the benefits with three new vessels: a trio of fishing boats destined for Norway; a fast-and-furious Miami Vice-style 40ft sport/leisure boat; and a catamaran pontoon lifestyle hotel boat/houseboat.

He is also re-engineering his proven whale-watching/adventure boats to take the latest water-jet engines that are quieter and more economical, which give the boat a shallower draft, ideal for Sri Lanka’s rivers and inshore waters. Added to that, he still has a steady trickle of orders for the smaller pleasure and leisure boats that were designed to fit into standard shipping containers for ease of export to Europe, India, Australia and elsewhere.

Meanwhile, uppermost in his mind is Sri Lanka’s vaunted ‘blue economy’—specifically, boatbuilding, marinas and nautical tourism—that is now firmly on the government’s agenda as it seeks to attract foreign investment, technology and entrepreneurial know-how into this rapidly emerging strategic industry.

Every two years, the Export Development Board and Boat Building Technology Improvement Institute Lanka (BTI, of which Fernando is chairman) sponsors the International Boat Show in Sri Lanka.

The show attracts visitors and buyers from all over the world. It is a showpiece for Sri Lanka’s boatbuilding industry, old and new alike, and a forum for networking, exchanging ideas and discussing the latest industry trends.

At the 2016 show at Dikovita Fishery Harbour, Fernando, as chairman of BTI, presciently said that successful businessmen (and women, of course!) “recognise their limitations, and know when to seek out partnerships and collaborations to achieve their goals”.

He asked: “In the case of advancing our boatbuilding skills and technologies, what partnerships and collaborations do we need to consolidate our industry and drive it even further forward?” And he concluded: “The world is changing rapidly, with new technologies and business strategies emerging daily, each creating new challenges that will need new thinking and new ideas to meet and master.”

Speaking at the recent launch of this year’s show, to be held at Galle Port over October 26–28, he said: “Over the past few years, some of the most significant advances have been made in the pleasure and leisure boating sectors, with their close links to the tourism and hospitality industries.

“Tourism is now a major focus for Sri Lanka’s ongoing economic development, and therefore we boat builders have a major part to play in helping Sri Lanka move forward.”

This sentiment was echoed by Malik Samarawickrama, Minister of Development Strategies and International Trade, who said that boat building “is a billion-dollar [global] industry, and Sri Lanka should take full advantage of this emerging trend”.

He added that this year’s event will “showcase the country’s capabilities in marine tourism and recreational boating, yachting and boat building for export”. All this is music to Viksund’s ears, because that is exactly what he is now focusing on—building market-leading leisure and lifestyle boats that (he hopes) will not only hit the spot in Sri Lanka, but have great export potential.

He is also developing a ‘star’ pontoon mooring system intended for waterfront hotels wanting to create marinas for recreational craft and ‘hotel boats’, the latter providing additional accommodation on the water where land-based expansion is limited or non-existent. As such, a new-build hotel boat, measuring a hefty 50ft long by 18ft wide, is currently underway for a south coast client. Equipped with two outboard engines, it is designed for lakes, lagoons and inland waterways, but can also manage light seas and tidal waters. At the same time, a 40ft Fastlane sport-fishing boat for another south coast hotel owner is nearing completion, and will be ready for launch in a month or two if everything goes according to plan. Its latest generation, twin 300hp outboard engines will propel this sleek and powerful craft at upwards of 30 knots (55kph).

His three new fishing boats, marketed in Norway by Viksund’s father under the Vikfjord brand, are also attracting a lot of attention from owners and operators who want to upgrade their current vessels, many of which were made at the old Viksund Norway yard.

Meanwhile, on the marina front, he is planning to instal his own ‘star’ pontoon mooring system to accommodate a bespoke ‘floating hotel’ as an adjunct to the resort. All of this is good news for the Viksund Asia ‘phoenix’ project as he works to rebuild the boatbuilding business after the Norwegian export market collapse debacle—except, possibly, for one thing.

At Neil Marine, work is progressing on a boat built under license for Menken Maritiem in Holland

Even his best friends would say—and he himself admits—that he is a hands-on boat builder and designer first and second, and a Fernandostyle businessman a lowly third. Not good, you might think, in today’s ruthlessly competitive boatbuilding market. Which is why, as a suitable footnote, an additional priority is finding a local partner who can help him put the company on a properly workmanlike footing, especially vis-à-vis good working relations with the various government departments with which he is obliged to do business. Even better would be a local partner to whom he could outsource the actual building of the boats, just as he was doing at the start with Neil Marine. A reliable subcontractor who would take Viksund boat designs to launch, while he himself is free to do what he does best—the creative design process.

Full circle? Perhaps, but maybe this time on a more solid foundation that does not involve a single customer going down the tubes and taking him with it.