ASRY bookings remain solid as recycling climbs the agenda

Ship repair projects booked at Bahrain’s ASRY in the year to July climbed to 57, a significant increase on the same period in 2023. The average yield per project was more than $1.1m, down by about 30% year on year but still higher than the five-year average. Yard managers had been expecting a decline in both the size and value of projects but, so far, this has not been evident.

Ships have outweighed rig repairs so far this year, but the split between regional and international business is roughly even—49% and 51%, respectively—which is closer than last year’s 47% and 53%. The change is not dramatic, but ASRY strategists believe that conflict in the Red Sea is a principal reason.

“A significant influencer on this trend of more regional clients making up the client base has been the re-routing of international ships to avoid the Red Sea, and therefore opting not to repair in the Arabian Gulf, with several clients instead using the Cape of Good Hope route to avoid security concerns and related costs,” the shipyard said in a statement.

Meanwhile, naval vessel repairs contribute a significant volume of revenue and the yard claims to be ‘the partner of choice for regional Navy assets, including those from the US and UK’. “Navy business has remained a strong element in the yard’s product mix, with revenues on track to match those of 2023,” the yard said.

Set up in 1977 as a pan-Arab venture, the oldest major shipyard in the Gulf now looks set to broaden its revenue streams. Complying with both the Hong Kong Convention and the EU Ship Recycling Regulation and holding ISO 30000 ship recycling accreditation from DNV, ASRY undertook the recycling of a small container vessel, Wan Hai 185, last year. Steel is understood to have been recycled at a local steel mill, but details of the project have not been released.

However, in July, Maersk signed a Memorandum of Understanding (MoU) with Bahrain’s Ministry of Transportation and Telecommunications and the Ministry of Industry and Commerce to assess the feasibility of establishing a ship recycling operation in the Kingdom.

Executives from ASRY attended the MoU signing, and it is understood that the yard will be responsible for installing the equipment necessary for recycling at its site. A.P. Møller-Maersk, meanwhile, will provide technical and operational advice.

Also party to the agreement is SULB, a steel-producing company with plants in Bahrain and Saudi Arabia. The steel firm will use the steel from recycling, process it, and recycle it into local and international markets.

Speaking at the signing, Ahmed Hassan, Maersk SVP Head of Asset Strategy, said: “We are hopeful that this MoU will provide the right platform to accelerate responsible ship recycling in the Kingdom, create a positive impact on the country’s economy, and create jobs.”

Over the past eight years, Maersk has been involved in the recycling of 22 vessels.

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This article is part of the Seatrade Maritime Middle East Report 2024