S'pore seen remaining as ship repair center

S'pore seen remaining as ship repair center

SINGAPORE (Reuter): Takeshi Tenjin, the executive chairman of Hitachi Zosen Singapore Ltd, said he was confident geography and infrastructure would ensure Singapore's role as key ship repair center, especially for tankers.

He dismissed concerns of challenges from other regional centers like Indonesia or the Philippines, where yards remain in infant developmental stages.

However, he did not dismiss the possibility of Hitachi looking for an alternative repair yard to Singapore due to rising labor costs.

Ship repairer Hitachi Zosen Singapore is expanding shipbuilding capacity to complement its core ship repair business and sees no need for mergers to compete with local yards, a top official said yesterday.

"We are trying to engage more heavily on shipbuilding but shiprepair will still be our core business," Tenjin told Reuters in an interview.

He was unfazed by the proposed merger of two local yards -- Sembawang Corp Ltd and Jurong Shipyard Ltd.

The merged company would have more than half the market and nine dry docks, making it one of the world's largest repair firms. Tenjin said his strategy was different.

"The company's policy is not to be the biggest. Turnover is not our target but to provide good, quality services to our clients and grow from there," he said.

"I have no intention to merge or form alliances with anyone," he said, dispelling market rumors Hitachi, the smallest of the Big Four yards here, would need to merge to survive the keen competition in Singapore.

Ship repair now contributes 75-80 percent of the group's total revenue. But Tenjin said this would change once its Singapore $15 million berth extension was completed next week.

The extension of the slipway to 230 metres (250 yards) from 127 metres (139 yards) would allow the yard to build bulk carriers of up to 30,000 dwt.

Hitachi, a subsidiary of Osaka-based Hitachi Zosen Corp [7004.T], is now engaged mainly in ship repair but has a building capacity for product carriers of 7,900-9,900 tons.

"When the slipway project is completed, ship repair will contribute about 60 percent while shipbuilding 35 percent," Tenjin said. The remaining five percent would come from industrial engineering-related businesses.