Sembcorp Marine’s steel fabrication facility to boost productivity

Singapore’s Sembcorp Marine will invest in a multi-functional steel fabrication facility which will significantly enhance automation and productivity at its offshore rig building, conversion and production and ship-repair businesses.

To be located at its Sembmarine Integrated Yard @ Tuas location, the new steel fabrication facility will offer a streamlined, seamless and extensively automated production process from steel stock yard to final assembly and finishing shop. Total investment in the fabrication facility is approximately S$222 million.

When completed in 3Q2015, the new facility will be equipped with advanced equipment and machinery, and will have a tonnage capacity of more than three times that of the existing hull shop at the Group’s Tanjong Kling yard. Together with the optimal layout, overall efficiency is expected to more than double.

The steel fabrication facility is designed eventually to be the central kitchen for steel fabrication for all three phases of the new Tuas yard.

Artist impression of the Steel Fabrication Facility at the Sembmarine Integrated Yard @ Tuas.
Artist impression of the Steel Fabrication Facility at the Sembmarine Integrated Yard @ Tuas.

Details on Phase II development of Sembmarine Integrated Yard @Tuas
Further to the Group’s earlier announcement on Phase II of the Sembmarine Integrated Yard @ Tuas (SIY@Tuas) on December 2012, Sembcorp Marine wishes to highlight that construction has commenced at the 34.5 hectare site.

Given the robust demand for its four VLCC dry docks in Phase I, the Group intends to build another three dry docks on the Phase II site, of which two will be 150,000 dwt capacity (dimensions of 255 metres by 52 metres by minus 8 metres), while the third will be a dedicated offshore dry dock (dimensions 255 metres by 110 metres by minus 12 metres depth) for offshore rig-building, upgrades and repairs.

Sembcorp Marine President & CEO Mr Wong Weng Sun said: “When Phase II is completed, we will have seven dry docks in operation including the four VLCC docks in Phase One. This will give the yard greater flexibility and enable us to keep work flowing continuously.”

“We remain optimistic about the long-term outlook of the offshore and marine industry. With the new facilities in Phase II, the Group will be well placed to benefit from the anticipated growth in demand for modern docking capacity, and to deliver value-added and cost competitive solutions to better meet the needs of our growing list of global customers and alliance partners,” he added.

Artist impression of the Steel Fabrication Facility at the Sembmarine Integrated Yard @ Tuas (2)

The three new docks in Phase II will allow the group to service a broader spectrum of vessels ranging from mid-sized to Suezmax commercial ships as well as to build offshore exploration and production units (eg. jack-up & semi-submersible drilling rigs, drillships and production vessels) for its expanding list of reputable and established shipping and offshore customers.

Included in the marine works is the construction of the finger pier, quays and wharves which will offer customers a total berthage of approximately 2 kilometres with maximum water depth ranging from minus 9 metres to minus 18 metres. Completion of the Phase II marine works is scheduled for the first quarter of 2017.

Located along Tuas South Boulevard at the south western tip of Singapore, the 34.5 hectare site is the second phase of the planned 206-hectare Sembmarine Integrated Yard @ Tuas Facility that the Group will develop as the leading, next generation fully integrated marine engineering hub for ship-repair, offshore rig-building, and for the conversion and building of specialized oil & gas vessels and platforms.

Funding and Financial Impact
The preliminary projection of the development costs of the marine works for Phase II of SIY@ Tuas is estimated to be around S$489 million, including ancillary, mechanical and electrical works. Together with the S$222 million to be invested in the steel fabrication facility, total investment is estimated at S$711 million.

Sembcorp Marine expects to fund these investments through its recently announced S$600 million bond issue (under the S$2,000,000,000 Multicurrency Multi-Issuer Debt Issuance Programme) and through internally generated funds.
As the investment is part of a multiple-phased expansion project to position the Group for long-term sustainable growth, it is not expected to have any material impact on the net tangible assets and earnings per share of the Company for the year ending December 31, 2014.

Barring unforeseen circumstances, the Group expects positive contributions to its earnings when Phase II of the Sembmarine Integrated Yard @ Tuas facility becomes operational.

About Sembcorp Marine
Sembcorp Marine is a marine and offshore engineering group with over 50 years of experience and proven capabilities in repair, specialised shipbuilding, building of high-specification jack-up rigs, fast track construction of ultra-deepwater semi-submersible rigs, conversion of floating production and storage facilities as well as the engineering and construction of offshore platforms.

Headquartered in Singapore, Sembcorp Marine has a network of six shipyards in Singapore – Jurong Shipyard, Sembawang Shipyard, SMOE, PPL Shipyard, Jurong SML and Sembmarine Integrated Yard @ Tuas. The 73.3-hectare Sembmarine Integrated Yard @ Tuas Phase I facility commenced operations in August 2013. The Group’s strategic presence spans Indonesia, China, India, United Kingdom and Brazil.

 

Press Release, September 10, 2014

 

 

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