Malaysia is not well known for its shipbuilding activities but it has for the past couple of decades been developing a robust industry centred on oil and gas. The oil town of Miri on the island of Borneo has firmly become the centre of shipbuilding in Malaysia.
Close to a dozen shipyards line the banks of the Batang Baram River, where they churn out numerous offshore vessels for both Malaysian and foreign customers.
A handful of shipyards elsewhere in Malaysia are also actively building for the offshore sector but not in the concentrated levels that can be found in Miri.
TradeWinds visited three of the larger shipyards in Miri. Their names, Shin Yang, Nam Cheong and Sealink, are quite familiar to any players in the Southeast Asian offshore scene and are becoming increasingly known to offshore companies further afield.
With the offshore sector still growing in leaps and bounds business at these yards remains brisk. In marked contrast to many commercial shipyards elsewhere in Asia, visitors to Miri’s shipyards will find them a hive of activity.
It is difficult to judge just how busy the yards are by examining their orderbooks. The reason is that most of the newbuildings constructed in Malaysia are built on a speculative basis and sold off once they are close to completion. The yards refer to this as building to stock.
On the surface this would appear a risky business model but in reality it has served them very well until now. Leong Seng Kiat, executive director of Nam Cheong, happily points out that his yard has built 72 speculative vessels over the past five years. “All were sold by the time they were completed,” he said.
(Source: Tradewinds August)
Download: Tradewinds August