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Building support

With the booming oil and gas industry requiring a plethora of support vessels and work boats, the market has never been stronger for Abu Dhabi Ship Building, explains vice president William Stewart.
INTERVIEWS, Ports & Free Zones

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With the booming oil and gas industry requiring a plethora of support vessels and work boats, the market has never been stronger for Abu Dhabi Ship Building, explains vice president William Stewart.

What services does Abu Dhabi Ship Building (ADSB) provide to the maritime industry?

ADSB is a public joint stock company listed on the Abu Dhabi Securities Exchange and is involved in four market sectors - naval shipbuilding, naval ship repairs, refits and upgrades, commercial shipbuilding and commercial ship repairs. We began in 1996 with the mandate to support the activities of the UAE navy - a vision of H.H. Sheikh Mohammed Bin Zayed.

 

In terms of small, oil-support vessels, the Middle East is creating its own demand.

We began by repairing and refitting existing naval vessels but moved on to building warships. We also have a significant market for commercial ship building, mainly in the oil and gas sector. ADSB does not design its own vessels but works closely with strategic partners around the world who are pedigree companies with proven designs.

How well equipped is your company to repair vessels that are damaged?

ADSB carries out repairs on approximately 200 commercial vessels per year and we have long term drydocking agreements with ESNAAD and IRSHAD who supply and operate oil support vessels for Abu Dhabi National Oil Company (ADNOC). We are well equipped for handling repairs. Our syncrolift is capable of lifting vessels that weigh up to 2000 tonnes and our travel lift vessels that weigh up to 500 tonnes.

What are the shipbuilding prospects for the Middle East region?

Like most places in the world at present the shipbuilding market in the Middle East is very busy and looks to continue to be that way in the foreseeable future. Some of this is based on the world demand for new tonnage. However, at the smaller end of the market such as work boats and oil related support vessels the Middle East is creating its own market demands.

Indeed, it is doubtful that we will see demand for these vessels abating in the near future. Despite speculation about how the credit crunch has hit shipbuilding, we have not had clients default on their orders. We verify the credit of our customers by running checks with companies like Dunn and Bradstreet.

How much of this demand comes from oil companies in the Gulf?

The demand for oil-related work boats in the Middle East will continue to grow as the fields become more sophisticated and as the vessel operators replace old tonnage.

In 2007, ADSB delivered a 40 metre fast aluminium crew boat to ESNAAD. We believe there is a continuing requirement for more of these types of vessel in the Arabian Gulf region. ADSB does not build ocean-going tankers for oil companies, however we have constructed and delivered a 55 metre coastal tanker for a local ship owner.

What are the main challenges in the commercial shipbuilding market?

Twenty per cent of our business is in building and repairing commercial vessels. In ship repairing the commercial market is growing every year. In the commercial shipbuilding market for the size of vessel that ADSB can build we find that competition from the Far East is very strong.

There are many shipyards in the Far East which has very low labour rates and a large pool of labour to draw on in their immediate location. They also operate shipyards with low overheads which also puts them in a very competitive position when compared to established yards in the Middle East and Europe.

Do you rely on strong relationships with clients to gain business?

In the ship repair market ADSB has built up very strong relationships with customers who now regularly dock their vessels with ADSB year on year and in fact are now entering into long-term maintenance contracts to ensure that drydock space is available for them.

In the shipbuilding market ADSB works hand in hand with its strategic partners and the customers to ensure that the product meets the customers requirements and that the customer comes back for repeat business. Certainly the formula has worked well for us so far.

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