The ship repair industry in the UAE can expect significant growth in business volumes this year as the country becomes more visible on the radar of ship owners and management companies seeking a variety of services, an industry expert said.
“Dubai will certainly continue to be the major hub for ship repair services. The volume of traffic indicates that leading ship repairers should have their workshops full with a high level of occupancy for the workforce,” said Fazel A. Fazelbhoy, general manager of ship repair company Nico International.
He said Dubai Drydocks continued to act as a magnet to attract large vessels for drydocking requirements and major conversion projects.
While revenues are growing, the rising cost of living in Dubai is also affecting the profitability and competitiveness of labour-intensive industries such as ship repair.
“With spiralling rents for staff accommodation, increases in transfer fees of visas and other increases in costs such as in the transportation sector, profit margins for ship repairers will be under pressure in 2006,” Fazelbhoy told Gulf News in an interview.
“The government will have to address these issues if it wants to be competitive with alternate repair locations like Singapore and increasingly China,” he added.
Within the region, the challenge for the industry may also come from port developments in Oman.
Dubai’s main competitor in drydocking would be ASRY in Bahrain, and to a lesser extent AHI in Ajman. However, for general afloat repairs, Fujairah represents the most attractive alternative in the UAE, according to Fazelbhoy.
He said Fujairah’s strategic location and the emergence of its anchorage as the world’s second largest bunkering location makes it a natural destination for ship repair services. “It is unfortunate however that there are no drydocking facilities in Fujairah as the market is certainly available,” Fazelbhoy said.
He urged leading ship repair companies to rely on current, modern technology and a well-trained safety conscious workforce in order to ensure that repairs are done right.
“There are always the mavericks who start up a ship repair service based on a handful of mechanics or welders but do not necessarily have the depth of expertise, marine knowledge, class requirements or the infrastructure to support extensive repairs,” he said.
Source: Gulf News