Bahrain's ASRY Turns in a Profitable Q1
ASRY turns in profitable first quarter 2012 despite continued recession
The Kingdom of Bahrain’s Arab Shipbuilding & Repair Yard Co (ASRY) has turned in a profitable first quarter of 2012 despite the continued shipping recession and increased competition in the region.
As of the beginning of May ASRY was running at close to capacity and had work in hand for the next 12 weeks. This, says CEO Chris Potter, is quite some achievement in a region which already has plenty of repair capacity, even before two major new repair facilities opened for business recently in Qatar and Oman.
As a result of increased competition in the region, sizeable discounts are par for the course and a necessary part of shiprepair life for the moment, said Mr Potter. Most owners, he says, are opting only for repairs essential for minimum class compliance. There may be some improvement over the balance of the year, but Mr Potter and his colleagues are under no illusions and are bracing themselves for another tough year in 2012.
The fact that owners are putting off non-essential repairs is a concern because it is delaying the massive task of preparing for new water ballast and emissions regulations. Mr Potter believes that the implications of the increasingly tough regulatory environment in ship operations will generate large volumes of work for yards with the necessary preparations in hand. ASRY is already looking at developing strategic alliances with several ballast water treatment manufacturers.
Both sets of new IMO regulations (water ballast treatment and emissions) will require hefty expenditure from shipowners who are already under serious pressure and who will enjoy no direct benefit as a result of their capital investment. Labouring in fiercely tough markets, they are facing over-tonnaged markets awash with tonnage, poor rates, very low enquiry levels and ever increasing bunker prices.
One saving grace for ASRY of late has been its decision to establish a dedicated offshore division – ASRY Offshore Services (AOS). Today, rig servicing, repair, stacking and other offshore-related work are making an increasingly important contribution to ASRY’s bottom line. Representing around 40% of the company’s turnover in 2011, offshore activity could soon outstrip ASRY’s core business, commercial shiprepair, as a revenue stream.
Another potentially exciting new income stream may also bear fruit sometime soon. Last year saw ASRY move into the Power Barge market, with a joint venture company with UK-based power generation specialist Centrax. The new company, ASRY-Centrax Ltd is in detailed negotiations with a number of parties for the construction and commissioning of power barges in Nigeria and the Philippines.
US owners, operators and managers continue to support ASRY in a big way. In 201121 vessels from the US market repaired at ASRY, vessels such as containerships, PCTCs, and jack-up rigs. This business came from the fleets of Crowley Technical Management Inc, Great Lakes Dredge & Dock, Ensco International, Maersk Line Ltd, Pride International and Rowan Companies Ltd.
US owners have also been highly visible at the Bahrain yard during the first quarter of 2012. After drydocking nine vessels in 2011; Maersk Line Ltd has already confirmed the further drydocking of four more 60,000dwt containerships in the first half of 2012 – Maersk Carolina, Maersk Missouri, Maersk Wyoming and Maersk Georgia as well as repairing PCTC Alliance Norfolk in April. The latter is managed by Maersk Line Ltd and operated by Farrell Lines. Crowley Technical Management has already repaired a further PCTC this year, Patriot, while the US Navy’s Cyclone-class patrol boat USS Whirlwind has just completed major repairs on ASRY’s large slipways.
One interesting repair job undertaken by ASRY this year on a US-owned vessels involved the 8,034dwt heavy lift vessel Ocean Charger, owned by New Orleans-based Pacific Gulf Marine, which drydocked at ASRY in mid-January 2012 for emergency stern seal repairs. The interesting fact about this vessel was that she was carrying a deck cargo of two 35m patrol vessels built by US yard Swiftships for the new Iraqi Navy. Due to high winds at the time of drydocking, Ocean Charger had to enter one of ASRY’s two large floating docks with her deck cargo still aboard!
2012 so far has also seen the return of the large tankers to ASRY, especially those vessels from the fleet of the National Shipping Co of Saudi Arabia (NSCSA), which are managed by Dubai’s Mid-East Shipmanagement. NSCSA has now been re-branded and now trades as Bahri. This means that all of the company’s large tankers have to be re-painted in Bahri’s new colour scheme, using the latest foul-release coating from Hempels. So far this year three vessels have drydocked at ASRY: the 317,788dwt Wafrah, the 302,977dwt Marjan and the 303,138dwt Safwah.