Wednesday, March 14, 2012

Sri Lanka Dockyard eyes offshore work as repairs decline

Mar 13, 2012 (LBO) - Sri Lanka's Colombo Dockyard anticipates lower ship building and repair orders given the shipping industry downturn but is investing in equipment to improve efficiency and eyeing offshore oil industry work.

 "We have been fortunate in the immediate term, as having a sufficiently buttressed order book ensures that we can maintain our revenues and profit this year," Colombo Dockyard chairman Akihiko Nakauchi said.

 "However, business will be challenging, as there is a significant reduction in container carrier and tanker traffic, while ship repairs too will be less."

Nakauchi said he does not believe the Eurozone economic downturn will last and expects it to end "sooner rather than later."

The anticipated recovery has spurred the yard to cut costs and improve operating efficiencies while investing in new facilities, he told shareholders in the company's annual report.

Colombo Dockyard, in which Japan's Onomichi Dockyard Company has a majority stake, has invested in expanding capacity in its No 1 dock, adding equipment including the commissioning of a new crane which will be in place by 2013.

"This will increase our loading and lifting capacity," Nakauchi said.

He said the yard intends "being very prudent in our expenditure, introducing strategies that will infuse waste and cost management, while increasing productivity and efficiency."

The increased activity in offshore business is one area that Colombo Dockyard will be emphasizing on in the coming year, Nakauchi said.

"Geographically, Colombo Dockyard couldn’t be positioned in a better place than in Sri Lanka. It truly is an imperative in global sea routes and with this advantage, we know we can consolidate our strengths and direct it towards advantages."

The yard has had very good relationships with European ship owners but given the downturn, very few ship owners remain active at present, he said.

"However, we have turned toward the opportunity of offshore business as well as some very aggressive new market ventures, which has seen a definite increase and has filled in our order books until 2014."

Sri Lanka struck oil and gas in the Mannar Basin last year in two test wells drilled by Cairn India.

source -

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