Coastal Contracts upbeat

The Sabah-based shipbuilder Coastal Contracts, sees bright prospects for its business driven by growing demand for its offshore support vessels amidst a favourable global macroeconomic environment. Executive chairman Ng Chin Heng said that the regional drilling activity is expected to expand across the board, with solid increases anticipated for India, Thailand, Myanmar as well as Malaysia.

The Malaysian company was currently working to secure the supply of machinery and equipment to build OSVs and was also considering venturing into the fabrication of offshore-related structures. “With that in mind, plans are under way for our newly-acquired shipyard in Sandakan to expedite production to enable us to undertake shipbuilding, ship repairing and offshore structure fabrication concurrently on a larger scale,” Ng said. The company?s current order book valued at RM200mil should last up to the end of 2007 and, if current deals are successfully closed, this figure may reach RM300mil, which will mean a full order through 2008.

On new contracts, Ng said the company had seen a stable stream of new orders for its OSVs so far. “Currently, talks and negotiations on possible contracts totalling about RM100mil are under way.” Coastal Contracts has customers from Malaysia, Indonesia, Europe and the Middle East. “We are now finalising a new link-up with a customer from the Caribbean.” Ng said. With the recent acquisition of a local company which owns eight parcels of land together with shipyard facilities, the group now owns two shipyards. “We estimate that a total capital injection of RM10mil to RM15mil is required to kick-start production at the new shipyard in Sandakan. We expect production of OSVs at this new facility to commence within the next three months,” he said.

On its future plans, Ng said the company was looking into diversifying its product range to include deep-sea work barges that are used in the installation, laying and maintenance of offshore structures, as well as offshore specialty vessels that support remotely operated vehicles used in survey operations. “In five years? time, we see ourselves as a major builder of larger and more powerful OSVs and tankers besides the customary tugboats and barges, and also a reliable fabricator of offshore-related structures to cater for the oil and gas activities in offshore Sabah,” he added.