New orders keep Cheoy Lee well above water
With a full order book until the middle of next year and a raft of repeat customers, Hong Kong-headquartered shipbuilder Cheoy Lee Shipyards is weathering the downturn in the global shipping sector better than most yards.
Cheoy Lee director Ken Lo Ngok-yang said the shipbuilder had been buoyed by growth in offshore oil and gas exploration and harbour towage, which had fuelled demand for its tugs and support vessels.
The firm's main shipyard at Doumen in Zhuhai delivered 15 tugs last year and is on course to deliver around 13 ships in 2012.
'The offshore business is still growing and we have a large order from Singapore for anchor-handling tugs,' Lo said. The firm also secured a US$35 million deal last week from Smit Lamnalco for four tugs that will help with the berthing and unberthing of massive ships carrying liquefied natural gas (LNG).
The tugs will work at an LNG export terminal being developed in Papua New Guinea by the Exxon Mobil-led consortium, Papua New Guinea LNG. They will be delivered between October 2013 and February 2014 and initially work at the terminal for 10 years, although this could be extended to 25 years.
The deal came after Cheoy Lee delivered four tugs in the past few months to Hongkong Salvage & Towage, all part of the HUD Group, which is jointly owned by Swire Pacific and Hutchison Whampoa. The tugs have been earmarked to work in the Hong Kong port, but are capable of fire-fighting, salvage, and long-distance towing throughout the region.
Cheoy Lee is also building two tugs for South China Towing, the other main tug operator in Hong Kong port, to be delivered next year; and also has a successful relationship with PSA, Singapore's main terminal operator, even though the city-state has its own shipbuilders capable of constructing tugs.
'In the past five years we have delivered 12 tugs to PSA,' Lo said, attributing the firm's success to the specialist nature of the vessels it builds. While other shipbuilders, especially on the mainland, are struggling for orders for vessels such as dry cargo, container ships and tankers, Cheoy Lee has focused on building tugs, crew boats, patrol vessels, and yachts.
Wah Kwong Maritime Transport Holdings chief Tim Huxley said some analysts estimated that 90 per cent of mainland shipyards had not had any new orders this year, and 28 per cent had not had a new order since 2009.
But Lo said Cheoy Lee's order book was full for this year and the first half of next year.
One senior maritime executive said many tug and offshore support vessel builders were prospering.
'The industry has been booming in the last few years due to new areas like northwest Australia coming on line, and lots of new gas terminals are being built - all of which require at least four or five powerful tugs.'
He added that larger container ships of 13,000-18,000 teu (20-foot equivalent units) that were coming into service need bigger, more powerful harbour tugs.