The offshore hydrocarbon sector remains the premier customer for maritime goods and services in the region. But new needs are rapidly emerging. Massive land reclaims and artificial-island projects mean that construction companies increasingly rely on underwater or offshore operations while telecom operators need to install, inspect and repair ever-larger networks of underwater cables. Moreover, the emergence of the region’s commercial ports as regional and global trade hubs is spurring a large demand for specialised craft, such as tugboats and pilot vessels.
Seaspray Aluminium Boats was the first Middle-Eastern manufacturer of aluminum vessels, including dive-support and oil-spill vessels. Initially based in Ajman, it moved its operations to Sharjah’s Hamriyah Free Zone in 2005. In 2003, in partnership with Abu Dhabi Ship Building, it was awarded a contract to supply the United Arab Emirates and Oman Navy and Coast Guards with a total of 42 assault boats, and has since then added other military craft to its range of products.
Hot on its heels is a relative newcomer, NicoCraft, which was established in 2006 as a subsidiary of Nico International, a ship repair and maintenance company. NicoCraft is currently building its two first 19m and 30m crew boats in Fujairah, where its facilities are estimated at $3m. The company plans to build between four to six ships a year, and is counting on the specificity of its crafts – aluminum-built catamarans featuring innovative hull designs – to grab a share of the UAE and regional market.
“The local market has potentially unlimited growth for the next five years,” Peter Tinker, operations manager for NicoCrafts, told OBG. “The biggest problem is the current shortage of people in the UAE, especially engineers and technicians,” he added.
Professional boats are just part of the story and the near future could see the market for leisure boats skyrocket.
“With 150,000 private berths being delivered in the next few years in the region, it is obvious that the leisure boating market is going to be tremendously boosted,” an industry specialist told OBG.
Established in 1982, Ajman-based Gulf Craft is already successfully tapping on this market with craft ranging from fishing boats to powerboats and luxury yachts. A global brand producing more than 600 boats a year, Gulf Craft is looking to further expand through an IPO in 2007.
Companies traditionally specialising in utilitarian craft are also looking to enter this market. Seaspray Aluminium Boats, for instance, which already makes home boats, has produced a tailor-made yacht for a local customer. Another example is Ras Al Khaimah-based Libra Marine. Founded in 1992, it manufactures over 300 small craft a year, catering primarily to professionals and security services. It is increasingly focusing on the small leisure boats market.
In addition to strong local demand in both professional and leisure markets, cost is the main reason that has prompted shipbuilders to establish themselves in the Northern Emirates.
“We have established ourselves in Fujairah essentially because Dubai is overpriced,” Tinker told OBG. “The shipbuilding industry is an extremely competitive one, and keeping costs down is essential. Fujairah offers far more competitive real estate prices, for instance. Also, Fujairah’s Port Authority has been very cooperative with our project.”
According to another industrialist, labour costs in this segment are much lower than in Europe – 20 to 25% of European labour costs – a huge advantage in an increasingly global business where many key players are established in countries with high-labour costs.
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