Penguin Marine Boat Services is aiming to strengthen its foothold in the Middle East by tapping into the growing opportunities in the maritime industry, a senior official has revealed.
The company, formed last year as a joint venture between Penguin International Singapore and Sharjah-based Demat Group, intends to capitalise on the expertise and resources of its parent companies to speed up its expansion. "This region is one of the fastest growth areas in terms of maritime projects and this presents huge opportunities to companies like ours with vast experience in the maritime service industry," said Captain Ismail Sairi, General Manager of Penguin Marine Boat Service and Director of Penguin Marine Offshore Services.
"We are increasing our presence in the Middle East to cater to the growing maritime services market."
The region's maritime offshore services market is set to double its rate of growth in the coming years because of strong demand from the oil and gas sector and land reclamation projects.
Penguin International consists of five business units offering integrated marine and offshore services ranging from high-speed passenger and cargo transportation to ship repair and shipbuilding, industrial services, offshore support services and bunkering. Penguin owns and operates 60 vessels and has shipyards in Singapore and at Batam, Indonesia.
The company was founded in 1972 and is listed on the Singapore Exchange. Its key markets are Southeast Asia and the Middle East.
Demat is a marine and offshore services and equipment provider with interests in aluminium ship design, shipbuilding and ship owning. It controls 30 per cent of the marine services business in the Middle East.
"Our strong background will enable us to leverage the strengths of all our business units to effectively serve the Middle East market," said Sairi. "We are targeting a broad base of clients involved with sea transport and offshore projects."
Penguin Marine Boat Services last year secured its maiden contract in the region when it won a Dh14.5 million-a-year tender to run 10 of the waterbuses operated on Dubai Creek by the Roads and Transport Authority (RTA).
It is responsible for the full management of waterbus operations, including systems implementation, maintenance, procurement, security and safety, environmental protection and training.
Sairi said the RTA deal had put the company in a position where it could secure additional contracts with the authority and seize other opportunities in the region.
The company is hoping to grow with RTA by taking care of its future marine projects such as the planned watertaxis and the passenger ferry along the Creek. It is currently testing the new generation of abras that the RTA is planning to introduce.
Dubai's coastline is to be extended from its original 72km to 1,500km by 2011 through reclamation projects, and Penguin Marine Boat Services foresees a doubling of demand for vessels to carry residents and visitors.
"There are many offshore tourism and residential projects coming up that will definitely heighten the demand for passenger boats of different sizes along the coast of Dubai," said Sairi. "We are gearing up for that demand."
He said the company would use some of its resources in Singapore along with those of Demat to ensure quick service delivery. Last year it set up Middle East headquarters in Dubai.
The joint venture was recently awarded a logistics management contract to support the development of the World islands project and the deal is expected to generate potential revenues of Dh720m over five years.
The main work involves the operation and management of an 87,000 sq m construction logistics port at Port Rashid, Dubai, which has been purpose-built to handle the transportation of all personnel, materials and equipment to support construction projects on the World. "It is clear our Middle East strategy has worked well and we intend to mobilise all the personnel and resources needed to make the most of this market."
The company hopes to enter into further joint ventures, strategic partnerships, vessel charters and selective acquisitions and is currently evaluating various fund-raising options.
Due to the timing of the World contract Penguin does not expect any impact from it on the group's financial results for the year ending December 31, 2008. However, the contract is expected to have a positive impact on earnings per share and net tangible assets in the next financial year, barring any unforeseen circumstances. Earlier this year another Penguin company, Pelican Offshore Services, secured a long-term time charter for a new anchor handling, towing and supply vessel in Saudi Arabia. Last year Pelican signed a Dh82m shipbuilding contract with the Abu Dhabi National Oil Company.
The contract calls for it to manage the construction of three 55m fast support and intervention vessels (FSIVs) at another Penguin unit – Penguin Shipyard International – for delivery beginning the third quarter of 2008. There is an option for one additional vessel. The deal marks the group's first move into the construction of steel FSIVs.