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DCNS History

French naval shipbuilder DCN (Direction des Constructions Navales) enjoyed the status of a State-owned company governed by private law. Most of the fighting ships operated by the French Navy are designed, built, tested and maintained by DCN. Further every weapon carried by every warship in the French Navy was integrated by DCN. A total of six submarines of the Redoutable class were built at Cherbourg Naval Dockyard - part of the major French Naval builder DCN, from 1967 to 1982.

In 1631, Cardinal Richelieu created the first arsenals. Colbert and Seignelay greatly developed Brest, created the port of Rochefort to become the second port of France in the 18th century, and rebuilt the port of Toulon which had been destroyed by a fire. In 1751, the marquis de Montalembert established a naval gun Foundry. In 1771, the Nantes-Indret establishment opened on the banks of the Loire, specializing in the design and implementation of propulsion systems. In 1778, the Lorient arsenal succeeded the East India Company. Major shipyards were built in France in Ruelle (1751), Nantes-Indret (1771), Lorient (1778) and, subsequently, in Cherbourg (1813). Others were to follow. As early as 1926, DCNS already had all the facilities now owned by the Group in mainland France.

From 1813, the Cherbourg arsenal produced surface ships, before specializing in submarines. The arsenal of Rochefort was closed in 1926. In 1937, the establishment of Saint-Tropez was created, along with the resumption of the facilities of the Schneider company that had worked there since 1907 in the field of torpedoes.

The Sofrantem company, to take into account the financial aspects of contracts for the export of DCN, was created in 1970. DCN International, a publicly owned, private company was founded in 1991 to ensure for the benefit of DCN business activities, promotion and monitoring of contracts to export. DCN Log, a subsidiary 100% DCN International, is implemented from the Logistics Department of Navfco society. The first reflections on the interest to separate in DCN State responsibilities (in connection with the General staff of the Navy) and industrial responsibilities began in 1989. In 1997, two distinct entities were loaded in the DGA (Directorate General of the weapons) drive and shipbuilding activities: Naval (SPN) and DCN programs Service, charged only industrial activities. In 2000, DCN was transformed into a national enterprise, detached from the DGA and placed under the direct authority of the Minister of defence.

In the 1990s Direction des Constructions Navales (DCN) faced declining domestic orders coupled with legal and political constraints that prohibited workforce reduction. In turn, these influenced both costs and effectiveness, which have made it more difficult to compete effectively in export markets. In 1999 the French government unveiled a new plan to restructure DCN to make it more competitive and attractive to foreign European partners. DCN was reorganized into three main activities: combat systems and equipment, new construction, and maintenance. The aim was to strengthen DCN in areas in which it can compete successfully in international markets, with a goal of winning 30 percent market share in its class of products. At the same time, all of DCNs main facilities were in regions in which they were the main or sole employer, so the French government had a collateral requirement to maintain employment in those regions. DCN actively searched for new alliances, partnerships, and cooperative agreements focused on international markets. DCN also entered into a joint partnership with Thompson-CSF to create UDS International, focused on the global market for submarine combat systems.

DCNS has changed radically. In 2003, the Group changed its legal status from government administration to stand-alone company or, more specifically, a State-owned commercial enterprise under private law. In this exemplary transformation, DCNS reorganised key activities (purchasing, human resources, project management, etc.) on commercial lines to become a highly successful industrial Group. A healthy bottom line from the start, continuing investment in R&D and the constant modernisation of industrial facilities provided a sound basis for new alliances while positioning the Group to win new business on international markets and play a leading role in future European consolidation.

DCNS is a public limited company (or socit anonyme) governed by the provisions of the French Act of July 26, 1983 related to the democratization of public-sector companies as regards the rules governing the membership and working methods of its Board of Directors. The Board of Directors ensures that the Group is run properly and determines its strategy objectives. It protects the interests of the companys principal stakeholders: the shareholders, employees and customers. A tightly structured senior management team with a new distribution of operating activities 4 Divisions and 3 Business Units dedicated to equipment supported by 3 cross-functional department and 10 functional departments. This operating structure allows the company to provide solutions closely matching the preoccupations of its current and prospective customers.

In 2006 DCNS generated revenues of 2.7 billion and held, at 31 December, firm orders worth 8.2 billion. This gives the management team excellent visibility over the short to medium term. Our healthy operating income of 213 million is the result of continuing efforts to cut costs and improve our industrial and management processes. While consolidating our position as Europes leading naval defence group, this vitality empowers us to join major European alliances as we go forward.

Prime contracting for major programs remained the key activity in 2006. In a context dominated by budgetary restrictions, major programs mobilising significant DCNS resources included the contracts for the Barracuda SSN project and a 5-year schedule major refit for CVN Charles-de-Gaulle, the FREMM multimission frigate programme (and more specifically negotiations involving key subsystems) and study contracts for the future PA2 aircraft carrier in cooperation with the British CVF program. Continuing progress on these fronts will ensure a healthy level of baseline activity over the coming ten years. The energetic response of all DCNS employees and their commitment to their respective areas of specialisation, not to mention their professionalism, are indicative of the Groups growing efficiency and maturity since the change of status in 2003.




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