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Sembcorp Marine seeing strong demand for ship repair drydock space

Sembcorp Marine seeing strong demand for ship repair drydock space
Sembcorp Marine (Sembmarine) is seeing good demand in the ship repair business with its largest dock fully booked until next year.

The Singapore yard group saw an 11% growth in revenues from ship repair in the second quarter of 2015 to SGD166m ($121.2m) compared to SGD150m in the same period a year earlier. However, a weaker first quarter meant that revenues from repair were down 14% in the first half of 2015 as a whole at $266m compared to $308m in the previous corresponding period. Ship repair accounted for 11% of the yard group's total revenues of SGD2.5bn in the first half of 2015.

“For repair the demand for the dock space is actually very strong,” PK Ong, coo of Sembmarine said at its half year results briefing on Wednesday. “Our big dock is fully booked into next year already.”

The group’s new yard, Sembcorp Marine Tuas Boulevard, has what the company says is the longest and deepest repair dock in Asia with a length of 412 m.

LNG repairs have figured strongly and Ong said they expect to dock 30 LNG carriers this year.

He said the new yard had also improved efficiency. “With our new yard we are definitely a lot more efficient than compared to our older yard so we do turn around the vessel faster.”

Wong Weng Sun, president and ceo of Sembmarine commented: “In the new yard we have four docks, in the first 365 days we docked and undocked 270 ships.”

However, when it came to margins in the ship repair business Ong said, “As far as the margin is concerned this is related to the price we can secure and also the workload.”

Wong noted that over the last two years shipowners had been trying to preserve cash so had tried to minimise maintenance. While demand for drydocking was strong he said that afloat repairs and upgrading was “drastically reduced” from five years ago.

Construction of phase two the new yard is continuing with construction of drydocks five and six “well underway”. A finger pier, quay and seventh drydock are due for completion in 2017.