SembCorp in Saudi shipyard venture

Singapore’s SembCorp Marine Ltd is in a joint venture to set up and operate a new yard at the Yanbu Commercial Port in Saudi Arabia. Sembcorp Marine and its joint venture partner Nasser Mohammed Al-Mukairish and Partners Company (Al Mukairish) have agreed to form SembMarine (Middle East) Pte Ltd (SMME). This will be SembCorp???s first investment in the Middle East.

SMME will be a founding shareholder in a Saudi Arabian joint stock company named Floating Dock for Shipbuilding and Ship Repair Company (FDSCO) which will build, own and operate the new shipyard over a 30-year term. The 21 hectares FDSCO Yard will be constructed on Al Jazeera Island which is a part of the Yanbu Commercial Port, facing the Red Sea. It is in a strategic ship repair location, particularly for ships operating in the Red Sea and accessing the Mediterranean Sea via the Suez Canal. The FDSCO Yard will offer a wide range of shipbuilding, ship repairing, marine engineering facilities and services to the regional heavy industry.

Fully operational by 2009, the FDSCO Yard will have a shiplift system for new building and repair of vessels up to Handymax size and a floating dock for repair of vessels up to Suezmax size. Other associated facilities will include ship construction halls, wet and dry berths, final outfitting and commissioning quay, supporting infrastructures and services as well as training facilities.

SCM will invest $6.6 million in cash in SMME through a subscription for 60% of SMME while Al Mukairish will subscribe the balance of 40% through a $4.4 million investment.

SMME will retain $1 million as working capital and will invest $10 million into FDSCO for a 2.5% equity stake. SCM also has an option to acquire up to 80% shareholding of SMME within a three-year period from the date of incorporation.

Besides Singapore, SembMarine has yards in Indonesia, China, Brazil, the US and India.