LONDON, July 17 -- The Bahrain-based Arab Shipbuilding and Repair Yard, ASRY, set up two decades ago, has for the first time appointed an Arab chief executive officer, CEO, to run the company. The move in the pan-Arab industry is a milestone in the post-war Arab drive towards industrial diversification of their oil-centered economy under Arab management and workforce. ASRY has also since inception carved a niche in the region, vying with such formidable competitors as Singapore. The company is making profit and has won international recognition. In October, ASRY became the first major shiprepair facility in the Gulf and one of the first worldwide to achieve ISO 9002 ceritifcation, after a quality audit by Det Norske Veritas. However, the development of shipbuilding and repair facilities in other Gulf countries, such as the drydocks in the UAE emirates of Abu Dhabi and Dubai, could impact on ASRY's position. ASRY's board of directors on July 18 appointed Mohammed al-Khateeb as the company's new CEO. He had since a year ago served as deputy to CEO Hans Frisk, who is retiring. Frisk will act as a company adviser until Oct. 31. Al-Khateeb joined the ASRY board as secretary and legal adviser in 1974, three years before the yard was inaugurated in the tiny Gulf island state of Bahrain. He was subsequently appointed managing director of the company's wholly-owned marketing company, a position al-Khateeb will continue to occupy in addition to his role as the CEO. ASRY was one of the first pan-Arab industrial projects to be set up in Bahrain, which since independence in 1971 has been building up an industrial economy to face the consequences of its rapidly declining oil and gas resources.
Bahrain, boasting a superior workforce and a strategic location, attracted Arab funds for ASRY, a project of the Kuwait-based Organization of Petroleum Exporting Countries, OAPEC. ASRY is owned by the OAPEC member states of Algeria, Bahrain, Egypt, Iraq, Kuwait, Libya, Qatar, Syria and the United Arab Emirates. They are also the company's financial backers. The decline in oil markets and in world shipping led to severe problems for ASRY, whose revenues in 1983 totaled only $13.3 million, compared with $31 million in the previous year. In 1984, the company received financial aid from the OAPEC ccountries, and revenue rose slightly to $16.6 million. ASRY, with a launch capacity of 450,000 dwt, enjoyed an occupancy rate of 83 percent in 1985, with operating costs at $27 million. The outbreak of the 1980-88 Iraq-Iran War helped the yard, especially in 1987 when the combatants started a 'tanker war' in the Gulf. ASRY, then the only close haven for ships damaged by Iranian or Iraqi air strikes, posted a revenue of $22 million, compared with $11.3 million in 1986. The business enabled ASRY to record its first full-year profit, after losses of $10 million in 1985 and $8 million in 1986. Profits however declined to about $1.5 million in 1990, compared with a record $9 million in 1989. Plans to build a second dry dock, with a capacity of 180,000 dwt, were shelved. Profits rose to $1.5 million in 1995 from $800,000 in 1994, despite tough competition from Asian and European shipyards. Operating income rose from $7.3 million in 1994 to $8.5 million in 1995 and revenue increased from $68 million to $74 million. more
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london: xxx to $74 million. ASRY earned a record revenue of $37 million in the first five months of 1996, 32.5 percent higher than the same period in 1995, the ASRY board said. 'The demand on ASRY's services was very high, with 65 large ships having been repaired during the period,' said board chairman Sheikh Daij bin Khalifa al-Khalifa. ASRY'S recent high profile contract was for the repair of 125,862 cubic meters (4,405,170 cubic feet) Golar Freeze, a liquefied natural gas, LNG, tanker belonging to Norway's Gotaas-Larsen. This was ASRY'S largest tanker repair contract and the first LNG carrier to be repaired at the yard. Such vessels normally utilize Japanese or Singapore yards for regular repair work. ASRY also secured two damage repair contracts involving 84,040 dwt Bahamas-registered tanker Bonar Braver, owned by Norway's Bona Shipping, and the 8,647 dwt Panamanian-registered chemical tanker Bador, owned by Bakri Navigation, Jeddah, Saudi Arabia. Another Norwegian company, Fred Olsen & Co., has placed an $18 million order with ASRY to convert the 140,905 dwt, 1974-built conventional tanker Knock Taggart, to a specialized offshore floating storage unit for use off the Nigerian coast. This was ASRY's first venture into the conversion market, and the second floating storage unit conversion contract to be carried out by a Middle East shipyard. The first such contract went to Dubai Drydocks, which converted Stena Contender for SBM Engineering of Monte Carlo. The vessel was also to be deployed off the West Africa coast. ASRY has received a number of other bookings, including the 12,518 dwt Bahrain-registered liquefied petroleum gas, LPG, carrier Zallaq, of the Arab Maritime Petroleum Tanker Co., Bibby Line's 56,188 dwt Hong Kong-registered LPG carrier Staffordshire, and 47,471 dwt LPC carrier Gaz al-Kuwait, of Kuwait Oil Tanker Co., KOTC. Other ships in the yard or stemmed include two Very Large Crude Carriers, VLCCs, Kristen Navigation's 268,312 dwt Astro Beta, Vela Corp's 291,435 dwt Al Bali Star, three KOTC tankers -- 35,644 dwt al- Deerah, the 35,644 dwt al- Badiyah and the 96,888 dwt Sea Isle City -- and two general cargo vessels from Romania's Rom Line, the 8,750 dwt Nicoresti and the 8,825 dwt Moinesti. ASRY's order book also include Brazilian, Hong Kong, Liberian and Saudi Arabian oil, chemical and ore tankers and bulk carriers. Shipping analysts say ASRY and Dubai Drydocks have made substantial inroads into Singapore's regional primacy in repairing VLCCs and ULCCs -- ultra large crude carriers, in the last three years. This sector is the mainstay of the Singapore repair industry. ASRY is intent on maintaining its competitive edge. The ASRY board at its meeting gave the go ahead to a $6 million project to equip two repair jetties with floating docks and cranes. Work on the project will commence in the new year. This is part of ASRY's $87 million expansion program to be carried out over six years. The program includes construction of new land installations, assembly and erection areas, workshops, cranage and an outfitting area. The program will be implemented in three stages. The first stage will be to dredge a channel of a minimum 10 meters (33 feet) depth and to build a new quay wall of about 400 meters (1,320 feet) in length and 250 meters (825 feet) wide. This will be equipped with crane tracks, fenders, water and electricity supplies, sufficient to accommodate one large VLCC. In the second phase, ASRY will extend the quay wall to around 700 meters (2,310 feet). The third phase would see the berth extended further to between 1,000 (3,300 feet) and 1,100 meters (3,630 feet) in length, when a channel of about 1,100 meters (3,300 feet) by 250 meters (825 feet) will have been dredged. ------
Middle East Shipping Outlook is a regular weekly feature of United Press International's Middle East Business Information Services, MEBIS. sin-m
