Thursday September 4, 2008
BHIC contracts out RM62m job to Sealink


It is for building the main hull of its two barges

KUALA LUMPUR: Boustead Heavy Industries Corp (BHIC) has outsourced a contract worth RM62mil to Sealink International Link Bhd to build the main hull of its two barges.

Under the agreement, Sealink’s wholly-owned subsidiary, Sealink Shipyard Sdn Bhd, will build the hull for the two 111-metre accommodation work barges at its shipyard in Miri and expects the barges to be completed by the second half of next year.

BHIC executive deputy chairman Datuk Seri Ahmad Ramli Mohd Nor said the demand for services was “very expensive” at present and the group was looking for a cost-efficient way to deliver its contract.

“Although we do have yard spaces, we have to rationalise and do it on the ‘best possible way’,” he told reporters after the signing ceremony between BHIC’s wholly-owned subsidiary, Boustead Penang Shipyard Sdn Bhd, and Sealink Shipyard yesterday.


From left: Sealink International Bhd CEO Yong Kiam Sam, Sealink International Bhd MD Yong Foh Choi, Boustead Heavy Inudstries Corp Bhd executive deputy chairman Datuk Seri Ahmad Ramli Mohd Nor and Boustead Heavy Inudstries Corp Bhd senior GM of finance Peramjeet Singh at the signing ceremony between Boustead Penang Shipyard Sdn Bhd and Sealink Shipyard Sdn Bhd on Wednesday.

Boustead Penang Shipyard was awarded the contract in May to construct two accommodation barges for Swire Pacific Offshore Operations worth RM205mil. It would construct the remaining parts of the barges at its shipyard in Pulau Jerejak, Penang.

Ahmad Ramli said BHIC, as a government-linked agency, was committed to develop partnerships and promote vendor development programmes to develop the shipbuilding industry, particularly in Sabah and Sarawak.

“Smart partnerships with other local shipbuilders would promote competitiveness among industry players and encourage them to work together as an industry to penetrate the regional or global market,” he said, adding that there was a need for niche players in the industry.

On the outlook for the shipbuilding industry, Ahmad Ramli said he expected an adjustment and cooling period for the second half due to the “credit squeeze” after the effects of subprime.

However, there would still be “backlog work” and demand would still exceed supply even with a weaker quantum than the first half, he said. “Despite oil price coming down, demand for energy will still be there in the longer term.” Meanwhile, BHIC hoped to secure at least RM300mil worth of contracts in the remaining second half of the year based on its past success rate, said Ahmad Ramli.

BHIC’s current orderbook of RM3.3bil would last the group until 2010, of which over RM100mil was from oil and gas business, he said.

“BHIC is currently constructing four vessels, including two 7,000 DWT oil and chemical carriers and two anchor-handling tug vessels for Sealink,” he added.

Sealink chief executive officer Yong Kiam Sam concurred that industry demand would pick up in the first half of next year.

He said there would be replacement of vessels, venture into new fields and reactivation of marginal fields in view of strong prices.

With this contract, Sealink’s orderbook was topped up in excess of RM450mil, Yong said, adding that 60% of the vessels it built were for sale, while the remaining for its charter business.