ST Engineering’s Marine business has acquired the site and assets of an existing shipyard in Singapore from Keppel FELS for $95m for its commercial ship repair business.
The assets acquired include three floating docks, existing buildings, workshops, and machinery.
“This asset purchase eliminates the need to build a greenfield shipyard, which would require much higher construction and material costs as well as lead time, ” the Singaporean multinational technology and engineering group said.
The new Gul yard replaces ST Engineering’s Tuas shipyard, as its lease will expire at the end of 2024.
The approximately 141,000 sqm Gul yard, with a gross built-up floor area of 74,593 sqm, has a remaining lease until August 2030 which can be extended by another 20 years. ST Engineering has another shipyard at Benoi which is mainly for shipbuilding.
The group said that its ship repair business in Singapore has performed well and has been profitable over the years and continues to grow.
In order to maintain its competitiveness in the ship repair segment, ST Engineering plans to upgrade the Gul yard to be a smart shipyard, adopting end-to-end digitalisation that will power the ship repair cycle and processes. The new Gul yard will also be used to support the group’s other marine segments, such as module fabrication and offshore renewable projects.
“Taking over this brownfield site versus constructing a replacement greenfield site is an effective way to minimise capex. More importantly, building on the existing infrastructure and facility enables us to start operating immediately and effectively with minimal disruption to our operations,” said Ng Sing Chan , President, Marine.
The announcement follows the group’s recent divestment of its U.S. marine business, VT Halter Marine and ST Engineering Halter Marine and Offshore, Inc. (STEHMO). Bollinger Shipyards Lockport, L.L.C. (Bollinger) bought the stake in the said yards for a cash consideration of $15 million.