It is of course known as the land of beer and chocolate, but Belgium is also a world leader in industries that are not as well known among the public. Belgium is home to two of the five largest international companies in the dredging industry, a crucial activity for facilitating the global flows of trade and spurring economic growth.
The fundamental importance of dredging to the world economy cannot be overstated. Almost 90% of the goods we buy are transported via container ships. As a result, it could be argued that not only containerization but also dredging to create ports and navigable waterways are the two major underlying forces that make globalization, as we know it today, possible.
Dredging refers to the different kinds of techniques used to dig up sediments from the bottom of bodies of water and dispose of them elsewhere. It is used for the construction of ports and canals, the reclamation of land for real estate development or the building of bridges and offshore windmills. It is also used for environmental remediation – for example, where eroded beaches have to be replenished with new sand. The most common dredging method is the use of a trailing suction pipe, which has the farthest reach; however, for certain projects, companies also use a backhoe or a clamshell bucket, which is similar to the hydraulic arms of land-based excavators.
The origins of the dredging industry in the Low Countries can be attributed to the historically unstable physical geography of the region, which is in effect the delta to the Meuse, Rhine and Scheldt rivers. The distinctive low-lying flat landscape which characterizes Flanders and the Netherlands meant that the building of dykes and canals was indispensable to making it permanently habitable. Once the tides of the sea and the meanders of the rivers were under better control, this flatness became an important economic advantage. Already in the 13th century, canals were built to connect medieval Bruges to the North Sea; however, up until the 17th century, dredging was a laborious small-scale activity, with workers using only spades and muscle power. The invention of the mud mill barge revolutionized the process and allowed for the deepening of harbors everywhere. Powered first by hand and later by horses (and later still by steam), these mud mill barges were outfitted with an extended blade, connected to a conveyor belt protruding from below the hull, which could push up the released silt to the deck.
From these early beginnings grew an expertise in hydraulic engineering, which is unique to Belgium and the Netherlands. Out of the five largest dredging companies worldwide, two are Dutch, two are Belgian and one is Chinese. The earliest Belgian dredging business was already building coastal defenses around 1875 and was one of the three companies which merged in 1991 to make up the conglomerate DEME NV (4,500 employees ; €2.509 billion revenue ). The other large Belgian dredging firm is the Jan De Nul Group (6,200 employees ; €2.124 billion revenue ), which started out as a general contractor in 1938 and began dredging in the 1950s. Dredging now accounts for roughly 90% of its business.
Their relatively small domestic markets compelled the four Dutch and Belgian companies to be outward-looking from early on, and the extreme competition between the four (and others) has turned them into highly innovative firms with a very international profile. Jan De Nul gets about two-thirds of its revenue from the Middle East, while DEME is renowned for its innovative DRACULA technique, which uses high pressure water jets to loosen sediments, making suction 20% more efficient. Some of the landmark projects of these two companies include:
- land reclamation for the construction of the Chek Lap Kok Airport in Hong Kong, the Dubai waterfront with its Palm Island or the Pearl Island in Qatar;
- the broadening and construction of new locks on the Panama and Suez canals.
FUTURE DEVELOPMENTS & PROSPECTS
Currently, Jan De Nul is constructing the Deurganckdok lock on the left bank of the River Scheldt at the Port of Antwerp, which will be the largest lock in the world upon completion in 2016 (estimated cost: €382 million). DEME, on the other hand, has been contracted to dredge and reclaim land for the significant expansion of the Port of Singapore, a contract worth €1.1 billion. North America is the only global region where the two firms have not been active.
The Transatlantic Trade and Investment Partnership (TTIP), currently under negotiation between the US and the European Union, is likely to change this and yield quite some opportunities for Belgium’s two dredging giants. While the Belgian and Dutch firms have become highly innovative and international throughout the years, the US market has remained closed. American dredging firms have been artificially protected by the Merchant Marine Act of 1920 (also known as the Jones Act) and are considerably less efficient as a result. This federal law restricts transport of goods and people between different US ports via American waterways to US-flag ships, built in the US, with only American crew. This law has long prevented dredging and other European maritime companies from operating in the US.
Often evoking the national security narrative, the US’s strong shipping lobby has made amending the Jones Act a stumbling block in the past. However, political resistance could soon shift. Earlier this year, Senator John McCain tabled an amendment to repeal the statute, stating that it is an antiquated protectionist measure. It has become an important point of contention during the TTIP negotiations, and AmCham Belgium is also exploring the need to change this law.