Drydocks looks to shipbuilding

Dubai: Shipbuilding has emerged as the second most important business for Dubai Drydocks, the region's leading ship repair facility.

Dubai Drydocks has invested $60 million in its shipbuilding infrastructure designed to open a new stream of revenues.

Expansion in a new phase will cost another $10-$15 million, chief executive Geoff Taylor said.

"We were looking to diversify our business and we saw opportunities in the buoyant shipbuilding market," he told Gulf News.

In 2005, ship repairs accounted for 70 per cent of the 27-year-old facility's turnover, followed by the ship conversion and newbuild businesses in equal parts.

"This year you will see a big change in those numbers," Taylor said, adding that shipbuilding will eventually contribute 50 per cent to the company's revenues in next few years.

The new shipbuilding facility's capacity will rise to 4,500 tonnes of steel per month by early 2008 from the current throughput of 3,000 tonnes per month, he added.

New contracts

Dubai-based marine transportation firm Gulf Energy Maritime awarded a contract in December to Dubai Drydocks to build four 6,200-tonne bunker tankers. The first of these vessels will be delivered in 2006.

Dubai Drydocks is also constructing hulls for two semi-submersible drilling rigs for Norwegian group Aker Kvaerner.

The hulls are 120 metres in length, 77 metres in width and 37.5 metres high. The project has taken up the facility's capacity for the next 22 months, Taylor said.

The Dubai government has spent $110 million on a number of facilities that will extend the Drydocks life by another 40 years. The work mainly involved building of concrete structures and replacing of pipes.

Taylor said the ship conversion business is also keeping Dubai Drydocks busy as demand for floating production, storage and offloading (FPSO) vessels has grown due to high energy prices.

FPSOs are used in producing crude at offshore fields and major companies are using these vessels to extract oil from fields that were considered marginal when energy prices were low.

At present Dubai Drydocks can simultaneously handle two conversions of tankers into FPSOs at its yards. From next year, this capacity will grow to handle three projects at a time, Taylor said.

He believes the development Dubai Maritime City next to Dubai Drydocks will create a consolidated maritime hub in Dubai.

Jadaf, another government-owned ship repair yard as old as Drydocks, is moving to the maritime city, but Taylor said there will be no competition between the two for ship repair business.