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A global leader in marine engineering, we specialise
in ship repair, newbuilding, ship conversion and offshore engineering.
We have an established global presence with eight strategically
located shipyards in Brazil, China, Indonesia and Singapore. With
a combined docking capacity of 2.2 million dead weight tonnes (dwt),
we have the largest ship repair and marine-related facilities east
of the Suez.
STRATEGY
To remain a world leader in ship repair, ship conversion and offshore
engineering, we will:
Build a strong international network of shipyards through
our Global Hub Strategy
We continue to strengthen our global presence with a network of
strategically located shipyards. We have a substantial sphere of
influence in the Asia-Pacific with four shipyards in Singapore,
two in China, and one in Indonesia, while our shipyard in Brazil
positions us closer to the offshore and conversion markets in the
Gulf of Mexico, South America and the West African region. This
global presence will enable us to continue to dominate the marine
engineering market against the backdrop of increasing competitive
pressure from low cost shipyards. We will also continue to explore
the establishment of new hubs such as in the Middle East and the
European regions.
Leverage the brands and reputation of our shipyards
Our shipyards operate as distinct brand names and have developed
expertise in particular niches. We will capitalise on this strong
branding, individual reputations and services to become a market
leader across different segments of the global marine industry.
Focus on higher value and niche markets
We will continue to leverage our proven capability in handling complex
vessels such as Very Large Crude Carriers (VLCC), container vessels,
liquid natural gas/liquid petroleum gas tankers, chemical tankers
and cruise ships, and will also focus on turnkey projects with high
design, engineering and procurement content. We will also continue
to grow our niche markets in the construction of container vessels,
chemical tankers, conversion of Floating Production, Storage and
Offloading (FPSO) systems and Floating Storage and Offloading (FSO)
systems and the upgrading of semi-submersibles and jack-ups.
Enhance long-term partnerships and alliances
We continue to develop long-term alliance partnerships with our
customers. These not only provide a stable baseload, but also help
the ship owners and shipyards to further develop and improve on
our systems and cost structures.
OPERATIONS REVIEW
Despite continued economic gloom this year, SembCorp Marine (SembMarine)
posted a record-high turnover of S$1.0 billion for the first time.
This was an 18 per cent increase in turnover from 2001. This improvement
was mainly due to the increased revenue from newbuildings and ship
conversion contracts.
SembMarines Profit After Tax and Minority Interests (PATMI)
contribution to the Group grew 14 per cent to S$57.3 million, making
up 32 per cent of the Groups PATMI. The improvement in profitability
came from a healthy orderbook in ship conversion,
newbuilding and offshore.
Our orderbook carried over into 2003 was a healthy S$1.4 billion.
In 2002, we secured a US$244 million contract with Brazils
Petrobras Netherlands BV to convert a VLCC to an FPSO unit (P-50).
On completion, the P-50 will be one of the worlds largest
FPSOs.
Long-term alliances provide a stable clientele base which contributes
on average 15 to 25 per cent of our ship repair revenues every year.
In 2002, we secured new alliance partners when we signed the Favoured
Customer Contracts with Norways Tschudi & Eitzen and USAs
Alaska Tanker as well as an evergreen alliance with BHP & T-Billiton
of Australia. Sembawang Shipyard will exclusively retrofit and dry-dock
vessels belonging to these three new alliance partners. We also
launched the worlds first Ship Repair Alliance e-Collaboration
Portal www.semballiance.com with Shell International Trading and
Shipping Company.
We delivered two key projects this year.
A S$50 million contract, done in conjunction with SMOE of SembCorp
Utilities, for the fabrication and integration of topside facilities
onto an FPSO for the Shell Petroleum Development Company of Nigeria
and a S$67 million Cableship ASEAN Explorer for ACPL
Marine, a leader in the submarine telecommunications fibre optic
cable industry.
Our acquisition of Dalian Cosco Marine Engineering took effect in
April 2002 with key personnel posted to the Dalian Cosco Marine
Engineering yard in China.
Meanwhile, we streamlined our operations in Singapore. Atlantis
Shipyard became a wholly-owned subsidiary, and was renamed Jurong
SML. Merged with SMLs shipyard operations, Jurong SML will
now operate as a mid-sized shipyard, giving us a single vehicle
specialising in the repair and conversion of mid-sized vessels.
We also secured the remaining 35 per cent interest in Karimun Sembawang
Shipyard in Indonesia.
SembMarine divested its entire 25.5 per cent share in non-core Jurong
Technologies Industrial Corporation for S$11.8 million, and disposed
its 30 per cent interest in MR Tech. In December, we announced plans
to unwind our cross-shareholdings in JPL Industries. SembMarines
shareholding in JPL Industries is now 53.8 per cent while Jurong
Clavon, a 50 per cent-owned associate of SembMarine, will cease
to be a shareholder of JPL Corporation.
In October, the proposed privatisation of our marine engineering
unit did not secure the requisite approval of SembMarines
minority shareholders. SembMarine remains a 63.6 per cent-owned
listed subsidiary of SembCorp Industries.
OUTLOOK
With our current orderbook, we expect to maintain our performance
in 2003.
Ship repair will remain competitive with increasing competition
from low cost centres such as China and Vietnam. However, an increase
in freight rates and the more stringent requirements are expected
to have positive impact on the market.
Market fundamentals for FPSO/FSOs remain strong despite short-term
geopolitical uncertainties. Offshore deepwater rig utilisation remains
strong particularly in West Africa, Brazil and the Asia-Pacific
region. There is also a healthy on-going demand for the repair and
upgrading of our existing rig fleets. Demand continues to be healthy
in the niche market for product tankers, feeder container vessels
and offshore supply vessels, while opportunities for the newbuilding
of offshore drilling rigs remain bright due to the ageing fleets.
ORDERBOOK
As of end-December 2002, our orderbook was S$1.4 billion
at the Group level.
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Sector |
Project
|
Value
(S$m) |
Client |
Completion Date |
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|
|
|
|
Newbuilding |
Construction
of 2 semi-submersibles
and 2 jack-ups and container vessels |
448 |
GlobalSantaFe
International Corporation and various owners |
2003
and 2004 |
|
|
|
|
|
|
|
|
|
Ship conversion and
offshore engineering |
Conversions
to FPSO, FSO, pipe lay barge, etc |
652 |
Various
owners |
From
1st quarter
2003 to 2004 |
|
|
|
|
|
|
|
|
|
Overseas |
Topsides
and utilities modules |
334 |
Halliburton
Productos Ltda & KPSM |
End-2003 |
|
|
|
|
|
|
|
|
GLOBAL NETWORK OF SHIPYARDS
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Shipyard |
% Ownership |
Location |
Capacity
(dwt) |
Facilities |
Activities |
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|
|
|
|
Jurong Shipyard |
100 |
Singapore |
1,100,000 |
Berthing
quays,
workshops,
cranes |
Ship
repair,
newbuilding,
ship conversion
offshore engineering |
|
|
|
|
|
|
|
|
|
|
Sembawang Shipyard |
100 |
Singapore |
710,000 |
Berthing
quays,
workshops,
cranes |
Ship
repair,
ship conversion and
refurbishment
and modification
of passenger vessels |
|
|
|
|
|
|
|
|
|
|
Jurong SML |
100 |
Singapore |
52,500 |
3
slipways |
Repair
of small and
medium-sized
vessels,
construction of mid-
sized vessels |
|
|
|
|
|
|
|
|
|
|
PPL Shipyard |
50 |
Singapore |
– |
700
metres
water frontage,
water depth of
6.5 metres |
Design
and
construction of
offshore
drilling rigs |
|
|
|
|
|
|
|
|
|
|
Karimun Sembawang
Shipyard |
100 |
Karimun,
Indonesia |
65,000 |
Workshop
and
engineering facilities |
Ship
repair,
conversion,
steel fabrication
and piping works |
|
|
|
|
|
|
|
|
|
|
Bohai Sembawang
Shipyard |
50 |
Tianjin,
China
|
85,000 |
Berths
and workshops |
Ship
repair,
conversion,
onshore and
offshore engineering |
|
|
|
|
|
|
|
|
|
|
Dalian COSCO
Marine
Engineering |
20 |
Dalian,
China |
230,000 |
1,400
metre-long berths
and workshops |
Ship
repair,
conversion,
offshore engineering |
|
|
|
|
|
|
|
|
|
|
Mauá Jurong |
35 |
Brazil |
60,000 |
Berths
and workshops |
Shipbuilding,
ship repair,
topside fabrication,
conversion and construction of floating
production and
drilling units |
|
|
|
|
|
|
|
|
|
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Tan Kwi Kin
President & CEO SembCorp Marine
Key Facts
Glossary
Competitive
Edge
|
2002
S$'000 |
2001
S$'000 |
|
Revenue |
1,006,897 |
850,064 |
PATMI |
57,342 |
50,427 |
Note: Figures
are taken at SembCorp Industries' Group Level for the
Key Business |
TURNOVER BY BUSINESS (S$m)
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SHIP REPAIR BY VESSEL TYPE (%)
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