Drydocks eyes new acquisitions
(DENNIS B MALLARI)
Dubai Drydocks is planning to invest $200 million (Dh734m) next year for acquisitions and joint ventures to maintain its leading position in the ship-building industry in the Middle East. Emirates Business talks to its CEO Geoff Taylor about the company’s performance in 2007 and its future plans.
How would you describe performance in 2007?
-- Generally, 2007 was a great year for business. Our acquisition of Singapore’s Pan-United Marine Limited in July contributed to our overall performance, leading to a growth of up to 30 per cent. It is our first overseas acquisition. Another reason for our growth was the expansion of our ship-building facility, at a cost of Dh292m.
Which sector witnessed the most growth?
-- Much of our growth was a reflection of the boom in the ship-building sector. It contributed about 50 per cent to our total revenue.
This growth has been facilitated by the improvement of our ship building capacity to between 2,500 and 3,000 tonnes of steel a month. This has enabled us to take up orders for much bigger vessels and increase our client base. This year we completed our biggest vessel so far, a 16,500 dead-weight tonnage semi-submersible rig ordered by Aker Kvaerner of Norway. We have an order for a similar vessel from the same company and it will be ready this year. The order for both vessels is worth Dh550m.
Are there new business strategies to facilitate your growth in 2008?
-- We want to consolidate our new acquisitions. In January, we will take full possession of Singapore’s Labroy Marine, which we recently acquired for Dh6 billion. It already has orders for 40 ships and six jack-up rigs.
Are you planning anymore overseas acquisitions?
-- Yes. We are investing about Dh734m in new acquisitions and small joint ventures. We will enter into a joint venture with a Singaporean firm for a small Chinese shipyard in Yangzhou.
We are also holding discussions for a joint venture in the Mediterranean to service luxury yachts and another one for a greenfield site in Indonesia.
Where do you get the funds? Are you planning an initial public offering?
-- About 90 per cent of the money is borrowed from banks and the rest is equity. An initial public offering might happen but I am not in a position to say when since the decision has to be made by our holding company, Dubai World.
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