DD World South East Asia Revenue to Soar 22 Per Cent

Dennis Welch, CEO of South East Asia operations of DD World, talking to the newspaper in Singapore that revenues from South East Asia operations of DD World are likely to be S$1.65 billion (US$1.11 billion) in 2008, compared with S$1.36 billion ($918 million) in 2007.

DD World had arranged a briefing for Sultan Ahmed bin Sulayem, Chairman of Dubai World is during his visit to Singapore. Geoff Taylor, CEO of DD World, disclosed during the briefing that the company has agreed to acquire 60 per cent stake shipyard in China for $55 million. The acquisition will be a joint venture with Singapore-based Topniche Associates owning the remaining 40 per cent of the shipyard located in Yangtze River delta. The deal is likely to be finalized by year-end, he added.

“We are a customer-driven business, we will expand wherever they want us. We are in negotiations to expand into Vietnam, Thailand and India and are studying Latin American markets,” said Sultan Ahmed bin Sulayem.

Dismissing the concerns about slowing global trade, he said that any slowdown would be only visible after a lag of two to three years as there is a demand-supply mismatch and more cargo than the vessels that are needed to transport it.

The newest acquisition will increase the number of shipyards owned by the company in the Far East to five.

DD World South East Asia operates three shipyards in Indonesia and one in Singapore and a fleet of 172 vessels. The Indonesian shipyards are located on the island of Batam. These shipyards in Batam – Graha, Nanindah and Pertama – employ about 18,000 people, making DD World the largest employer in the island.

Taylor said that the company has started dredging work for its forth yard in Batam and it is expected to be completed within 3 years. The company is set to reap rewards for its bold global foray. DD World made its first international expansion by buying two Singapore-based companies – Pan-United Marine and Labroy Marine – for $2 billion in 2007.

Earlier this year, Graha - the company’s dedicated offshore oil-rig construction unit - launched its and Indonesia’s first mobile offshore drilling rig fully built in the yard. Six more rigs are under construction.

The company’s ship building and servicing yard, Pertama is set to deliver OSA Goliath, a 180 metre multi-purpose offshore construction vessel with 1600 tonne super-heavy lift making it the world’s largest vessel of its kind. The order book for its South East Asia Operation is full till 2010.

The fleet operation mainly tugs and barges, is also being enlarged. “This is a very important segment of our business and we are adding more capacity”, said Welch. The company’s vessels feed Singapore’s huge appetite for sand and earth on-going land reclamation projects. The tiny city-state relies on reclaiming land from sea to increase its land area. According to a Reuters report, about 20 per cent of Singapore’s surface area is reclaimed from the sea.

aruna@khaleejtimes.com