8 March 2018 12:09 am
Sri Lanka’s largest shipbuilder, Colombo Dockyard PLC (DOCK), is not hopeful of a recovery in the shipbuilding market over the short and medium term and will continue to focus on building niche, high-tech ships as a coping strategy, until the demand for its popular offshore support vessels return to normalcy.
“Despite an uptick in ordering, 2017 was another difficult year for the shipbuilding industry, with contracting remaining well below trend and most shipyards continuing to feel the pressure.
Some sectors saw improved contracting activity, while deliveries remained relatively firm but shipbuilders will be looking to see more positive changes before predicting a return to better times,” DOCK Chairman Toru Takehara said.
He said that the shipbuilding industry is still reeling from the oil price crash in 2015, which saw orders for offshore support vessels for oil platforms—which is DOCK’s speciality—getting cancelled or renegotiated.
Despite the uptick in oil prices over the past year, Takehara was of the view that another year or two would pass before the demand picks up again globally for offshore support vessels, since there is a global vessel glut, resulting in intense competition among the regional manufacturers.
“As a short and middle-term strategy, we are aiming at the medium-sized, highly specialised, technology-driven, complex vessels with high value addition, that will keep all engineering departments of our shipyard engaged,” he said.
DOCK is aiming to bag contracts for cable laying vessels for telecommunication and power transmission, wind farm support vessels, liquefied natural gas storage, bunkering and re-gasification vessels, pilot station vessels and buoy tender vessels.
“These are niche markets and the ordinary shipyards in the region are not capable of undertaking such construction work due to its complexity and customized nature,” Takehara said.
DOCK already completed one cable laying vessel contract for Japan’s Kokusai Cable Ship Co. Ltd, which was the largest vessel built in DOCK’s history.
The firm also completed a passenger ferry for the Northern Province and two offshore support vessels, while it is confident of being awarded another two shipbuilding projects from the Middle East.
After two years of being in the red, DOCK posted Rs.25.4 million in net profits in 2017. Back in 2014, the bottom line had been Rs.290.9 million, while in 2013, it had been Rs.926.1 million.
The past five years saw ship repairs overtake shipbuilding as DOCK’s most profitable segment.
(CW)