ST Engineering acquires shipyard from Keppel
To boost its commercial shiprepair business, ST Engineering Marine has acquired the site and assets of an existing shipyard in Singapore from Keppel FELS for S$95M (US$72M).
Located at 55 Gul Road, the newly acquired shipyard has three floating docks, existing buildings, workshops and machinery.
By acquiring the existing shipyard, ST Engineering can avoid investing in the more costly development of a greenfield shipyard to replace its Tuas shipyard, whose lease expires at the end of 2024.
The existing Gul yard has an area of 141,000 m2, with a gross built up floor area of 74,593 m2, and a lease that runs until August 2030 and can be extended by another 20 years. ST Engineering has another shipyard at Benoi which is primarily focused on shipbuilding.
ST Engineering said its shiprepair business in Singapore “has performed well and has been profitable over the years and continues to grow.” To remain competitive in the shiprepair business, ST Engineering plans to transform the newly acquired yard into a smart shipyard, adopting end-to-end digitalisation that will power the shiprepair cycle and processes. The 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,” said ST Engineering Marine president Ng Sing Chan. “More importantly, building on the existing infrastructure and facility enables us to start operating immediately and effectively with minimal disruption to our operations,” he added.