Colombo Dockyard, Sri Lanka’s largest ship repair and building engineering facility said, it expects rapid changes in the global shipbuilding industry, where sector players would stand to benefit from the new direction.
However, it cautioned that the emergence of new opportunities is also a growth hindering element, which the industry should be mindful of.
“The global shipbuilding industry is expected to change gear and grow in tandem with improving seaborne trade, and demand for eco-friendly shipping services, especially in the Small Eco Bulk market in Europe and the growth in the nautical tourism sector.
“However, the industry should be watchful of certain new factors that could hinder growth such as cyber breaches and changing environmental regulations,” said Colombo Dockyard Chairman Hideaki Tanaka in the company’s recently published annual report.
Tanaka noted that due to the slowdown in global economic growth and low oil prices, the global shipbuilding industry witnessed a challenging year particularly with bottom level pricing for new ships.
Adding to the woes were factors such as uncertain regulatory landscape, volatile nature of the Chinese economy, geopolitical tension amongst major global economies, trade embargoes, and Brexit.
Taking the hit was also the global ship repair market, which continues to be heavily price-competitive, resulting in majority of the ship yards to operate with great challenges for growth and survival, Tanaka said.
With regard to the global health crisis, the Colombo Dockyard chief shared that the impact of COVID-19 pandemic is already showing a downward trend in economic growth and impacting businesses across the globe. Despite the current dampened conditions, Tanaka said Colombo Dockyard expects Sri Lanka to resume economic activities ahead of most countries, given the island nation’s “exemplary” efforts in managing the pandemic.
He pointed out that the effective management of the crisis situation would provide Colombo Dockyard an opportune timeline to expand operations and get ahead of the curve as a leading shipyard in South Asia.
“Our prudent and strong approach to business operations enabled us to effectively surpass challenges posed in the aftermath of the Easter Sunday attack. In the aftermath of COVID-19, we expect to forge ahead in the same vein, undaunted as a united front,” Tanaka said.
For the year ended March 31, 2019 (FY19/20), Colombo Dockyard managed total revenue of Rs. 10.1 billion, against the Rs.13.1 billion recorded in the previous year. Export earnings generated by the firm for FY19/20 was over 86 percent of total revenue.