HSL to venture into shipbuilding

Marine engineering specialist Hock Seng Lee Bhd (HSL) in Sarawak, Malaysia, is diversifying into ship building, maintenance and repair that will enhance its exposure to the oil and gas sector.

To that end, HSL has accepted an offer from Sarawak Timber Industry Development Corporation (STIDC) to acquire a 48.43-acre (19.37-hectare) industrial land in Tanjung Manis for RM9.5 million to establish its shipyard. HSL’s managing director Datuk Paul Yu Chee Hoe said the acquisition marked the group?s first step towards diversifying into shipbuilding activities. “‘While covering in-house needs, we expect ship building, maintenance and repair services for external customers to enlarge our earnings base and contribute positively to our financial performance going forward,” he said in a statement. HSL is currently involved in the RM179 million reclamation work for STIDC for an adjacent industrial estate at Tanjung Manis. HSL said the land it was acquiring was close to the mouth of Rajang River and was served by two adjacent ports, Tanjung Manis integrated deep sea fishing port and Tanjung Manis coastal wharf – both within a two kilometre radius.

“‘When fully realised, the shipyard is expected to be capable of fabrication and servicing vessels up to 5,000 gt, specialising in value-added vessels such as anchor handling tugs and oil and gas industry supply boats,” he said. HSL said the shipyard could also charter vessels, particularly to support offshore oil and gas operations and rising regional shipping demand. HSL said future facilities, which include a dry dock, advanced slipway system and fabrication yard, would be implemented in phases and owned and operated by HSL’s wholly owned subsidiary HSL Hydro Sdn Bhd.

The company said its strategic progression into ship fabrication and maintenance would increase HSL’s exposure to the booming oil and gas sector, which has been further boosted by last week?s announcement of the Sarawak Corridor for Renewable Energy (SCORE). It said port expansion and the upgrading of marine infrastructure throughout the state were underway, adding with the growth of export-oriented industrial estate and SCORE, there would be increased demand for cargo, tug and support vessels, which HSL could benefit from. HSL said the newly acquired land has a deep-water frontage depth of between 10 and 20 metres and a shoreline of 670 metres.