Rigged for success
The acquisition of GMMOS Group by private equity leader Abraaj has placed the company in pole position to capitalise on the oil and gas sector's continued growth.
Combine the booming oil and gas industry with the thriving sea freight business and the end result is a pretty powerful combination. Add to this the growth in the number of ships, particularly tankers carrying such cargo, into the region and you can be highly confident of a recipe for success.
For 25 years, Dubai-based GMMOS (Gulf Marine Maintenance and Offshore Service Company) Group has been offering support services to the oil and gas, shipping and construction industries worldwide, and its rapidly expanding shipbuilding and repair business has been steadily growing alongside.
Although much of the group's work focuses on general engineering and fabrication for the oil and gas industry, two of its companies - Grandweld and GMMOSTECH - are dedicated to ship building, repair and conversion.
The former, Grandweld, focuses more on the building and repair of ships to service the oil industry such as tugboats, crewboats, mooring/utility launches, barges, pleasure vessels and other types of vessels.
It is through Grandweld that the group has a huge presence at the government-owned Al Jadaf Ship Docking Yard in Dubai. "The difference between GMMOSTECH and Grandweld is that we do dock the ships at Al Jadaf," says Neil Corbasson, group vice president for business development at GMMOS Group.
"GMMOSTECH doesn't build tankers, because you need a dry dock to do this. Grandweld is more about boats for the offshore business, and GMMOSTECH is more on the tanker side."
GMMOSTECH is focused on providing repair and maintenance services for tankers, gas carriers and dry cargo ships.
With the region experiencing a major increase in the number of bigger vessels, including several new builds in the pipeline, the company's services are well-placed for significant expansion. "GMMOSTECH is a ship repair business and it basically repairs tankers and large vessels," explains Corbasson.
Since the company was formed in 1988, it has steadily established a strong reputation over the past 20 years for providing the fast turnkey response demanded by the region's ship owners.
At the heart of its success lies the understanding and appreciation of customer requirements for a quick turnaround, year-round availability and reliability in terms of its emergency response capability.
The actual work carried out by GMMOSTECH depends largely on what is required by the client.
"We don't do below-sea work. Everything is above water, such as steel works, engine repairs, engine maintenance, electrical work, and conversions," explains Corbasson. "This work is mostly local, covering the different emirates and takes place at anchorage or ports."
With its modern facilities, he is confident that the company is able to respond well to its customer's considerable demands for ship repairs.
As well as its high attention to cost efficiency, the GMMOS Group overall is keen to emphasise the importance of having the highest industry standards in health and safety.
Just last month, it received the Workplace Safety Award 2007 from Dubai Municipality for its achievements in raising standards in health policy, accident prevention, natural resource preservation, and fire and emergency response.
"Health and safety is very important to GMMOS Group," says Corbasson. "Many of our employees have been with us for at least ten years, and we have some who have been here for over 20 years. Our aim as GMMOS Group is to have a zero tolerance regarding safety risks."
Indeed, after serving many years in the business himself, Corbasson knows a thing or two about the industry.
"I am in my prime age you know," he laughs. He started his offshore career with a company based in Kuwait in 1970, before joining the GMMOS Group back in 1978.
After a detour working in Europe for ELF, he returned back to GMMOS in 2001.
Corbasson enjoys working with the executive management of the company, which consists of general managers from the different GMMOS Group companies.
"It's a fairly tight management and we have known each other for many years. We have constant brainstorming on how to develop the group," he says, enthusiastically.
In terms of Corbasson's own contribution to the growth of GMOSS Group, he remains relatively modest. "I guess my involvement encouraged the company to become more international," he admits.
"I saw opportunities in providing services to customers who did not necessarily have to come to the Middle East to do business. For example, in the pressure vessel business, 90% of my production is actually exported - we fabricate in Dubai and export from there."
Corbasson has also been instrumental in the establishment of GMMOS Kazakhstan LLP, which was registered in May 2004.
The company launched its operations a year later, in a partnership between GMMOS Dubai LLC and Gateway Ventures (CA) Ltd.
"The idea was to widen the base," he explains. "Kazakhstan is frontier land with huge reserves that have not been tapped. All the major oil companies in the world are starting to invest in the field offshore, and its eventually going to be one of the major oil exporters in the whole world."
GMMOS Kazakhstan is looking to deliver fabrication work initially, in line with its services in Dubai. "We are looking for opportunities to develop as we go on," he adds.
Indeed, business opportunities abound in the Kazakhstan region as its young oil and gas industry flourishes and GMMOS Kazakhstan is right to be very excited about the region's prospects.
Whether the demand for its ship repair services will follow remains to be seen, but with GMMOS Kazakhstan operating out of the Caspian port city of Aktau, the country's only sea access point available for commercial traffic, the potential is certainly there.
In the meantime, in terms of its future in the UAE, GMMOS Group has a lot to be smiling about. With its acquisition by Abraaj Capital meaning much more investment into the company, it can only go from strength to strength.
"Until 2007, GMMOS Group was a small company owned by a family. It is only now that we have become part of the Abraaj portfolio that we can look at larger investments," Corbasson points out.
Abraaj Capital has also demonstrated its confidence in the considerable potential of the group and its management, and both sides hope that this assurance will pay off well.
GMMOS Dubai & Kazakhstan - general engineering and pressure vessel specialised fabrication company.
Grandweld - specialist ship building, ship conversion & repair and a wide variety of vessels including super yachts.
GMMOSTECH - tanker and large vessel repair company.
Stanford Marine - full service marine charterer.
Gallagher - heavy lift specialist mobile crane company.
With this backing, GMMOS Group is eager to up its expansion plans, both nationally and internationally.
"It is a good opportunity for GMMOS to be part of Abraaj because it means that we are pushing to grasp any opportunities that we can find. In every sense of the word, in the ship business, in the acquisition of other ships and vessels or companies that do the same business that we do. We are definitely alert to market trends and spend a lot of time in looking for these opportunities," Corbasson emphasises.
In terms of the immediate future, the next step is moving to Dubai Maritime City (DMC), the world's first purpose built integrated marine centre.
"We have already reserved a base of approximately 33,000m2. This is going to be completely covered to repair and build ships in a green environment, which is going to cost a lot of money. So it is good that we have Abraaj behind us to be able to provide the investment," he adds.
GMMOS Group is hoping to continue its strong expansion, particularly as growth in the oil and gas industry is sustained.
The other key to its success, of course, lies in its advantageous location in Dubai itself.
Not only has the number of oil tankers coming into the region grown significantly, Dubai's strategic geographical positioning as the 'gateway' between the east and west, has made the region an ideal stopping point for tanker and dry cargo traffic.
Of course, as with all business, it is not always plain sailing, and challenges will crop up from time to time.
"The main challenges facing the region in terms of shipbuilding and repairs are price, timing and delivery and quality," says Corbasson.
However, he remains very positive of what the region has to offer.
"Much of the efficiency here is due to Dubai being a fantastic hub, with an efficient port and airport. Not only compared to other Middle East countries but worldwide, it is one of the best places to work from because it is so easy," he enthuses.
Services offered• Marine repair
• Marine maintenance
• Boiler repairs including rebuilding gas carriers
• Offshore and onshore engineering and repairs:
Auxiliary and deck machinery pumps, turbines and hydraulic systems
Repairs and overhauling of refrigerators and air conditioning plants
All types of vessels plus oil rigs
Boiler repairs of both a major and minor nature are handled by a structured team. The company is heavily involved and experienced in the rebuilding of gas carriers and in gas carrier field technology.
GMMOSTECH has highly skilled and experienced personnel and also supplies manpower resources to valued clients and other similar companies.
Offshore and onshore engineering and repair
Highly specialised teams of engineers are also qualified to undertake mechanical, electrical and automation repairs including voyage repairs.