Olongapo SubicBay BatangGapo Newscenter

Friday, June 08, 2007

Keppel Marine sees higher earnings on ship conversions

Aside from shiprepairs, Keppel Philippines Marine Inc. (KPMI) is banking on the conversion of vessels operating in the country into double-hull from single-hull to boost its earnings growth this year.

"In addition to shiprepair services, the phasing out of single-hull tankers also offers KPMI opportunity for hull conversions. It is estimated that one-third of the global tanker fleet has yet to comply with the single-hull to double-hull conversion requirement of the International Maritime Organization," KPMI Chairman Nelson Yeo Chien Sheng said.

The Maritime Industry Authority have given operators of single-hull tankers until April 2008 to replace their ships with double-hull, double-bottom tankers. Those who will not comply will face sanctions including a cease and desist order and delisting from the Philippine registry.

The order came following the August 11 sinking of MT Solar I off Guimaras Island. The sunken vessel caused a massive oil spill, which severely affected marine life and health of residents.

KPMI director and president To Ko Lin, meanwhile, said the company is eyeing more foreign than local buyers of its ships.

He said 60-percent of its market is expected to be foreign while the remaining will be local.

"Outlook on the domestic market is stable while foreign market is good. We do plan to attract more local buyers. However, we have finite resources so we have to balance between foreign ships and domestic vessels," he said.

Without mentioning any key figures, To Ko Lin said most of the company's investments this year will go to the upgrade of its facilities and equipment.

KPMI operates shipyards in Batangas, Cebu and Subic.

Keppel Batangas repaired a total of 80 ships last year. Of the total number, 28 were foreign vessels that generated P315 million in revenue. Local vessels repaired accounted for P272 million.

This year, Keppel Batangas said it will be more active in the offshore industry while the Subic Shipyard will be involved in life extension/conversion of FPSO and Floating Storage Offloading projects and repair of vessels up to 350,000 deadweight tons.

In 2006, KPMI registered consolidated revenues of P1.95 billion, 34 percent higher than in the previous year on the back of higher shipbuilding and fabrication revenue.

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