Bahrain Review

Asry improvements paying off

Asry has made strong gains in rig repairs

Asry, the leading ship and rig repair yard in the Arabian Gulf, has said its work expertise together with the onsite specialist contractors initiative (Project Jupiter) and corporate restructuring is helping it maintain and grow its market share.

Restructuring had helped it gain greater naval business for ship repairs and a penetration of the Saudi rig repair market through the opening of an office in Dammam, the company said. 

Despite marketing challenges, the focus on internal improvements had boosted operational efficiency, created departments leading to revenue growth and helped the company maintain its leading position among regional shipyards in 2014, it said.

“In general terms, the maritime repair market in 2014 continued to remain under pressure from over-supply of repair capacity, ship owners restricting their repair scopes, and the general age profile of the ships remaining low, therefore requiring less maintenance,” the company observed in a year-ending statement. 

Berge: keeping a strong focus on growth

Berge: keeping a strong focus on growth

“Evidence of this market tightening shows when looking at the number of vessels docking for repair at Asry (in 2014), which is similar to 2013, yet yielding smaller revenues than in the latter year. This indicates the revenue-per-vessel is down in 2014, which is an indicator of general market hesitancy,” it added.

Asry chief executive Nils Kristian Berge remarked: “Ship owners are still feeling the effects of the global shipping downturn, and as a repair facility it is our responsibility to give them peace of mind that their maintenance budgets are being used in the most efficient manner possible. Asry is already known for its timely quality service, but by investing in even greater excellence, we can reassure our customers, new and old, that every dollar they spend on maintenance with us is providing essential optimisation to make their fleet as profit-efficient as possible.”    

Having anticipated the ongoing market pressure, Asry’s senior management identified that the most successful way to maintain and grow market share in 2014 would be through absolute excellence in quality of service. To this end, two initiatives were implemented at the start of 2014 with the aim of staying one step ahead of the competition.

 

PROJECT JUPITER

The first was Project Jupiter – the initiative to make Asry the leader in onsite specialist contractors in the Middle East. 2014 has seen several global contractors, including ABB, Solas, MAN and Seven Seas, increase their investment at the shipyard to provide more substantial services to ship and rig owners. Having a smart mix of contractors based in the yard makes customer’s repairs quicker and more convenient. With several more international names lined up to boost their presence at the Bahrain-based shipyard, current investment from Specialist Contractors in the yard in 2014 already totals approximately $3.7 million, and with new confirmed clients in the pipeline, that number looked set to rise to at least $9.2 million by the end of 2014.

Asry already accommodates 33 specialist contractors, including leading names such as Alfa Lavel, Gates, Blohm+Voss, Harris PYE, Goltens, and more. As Project Jupiter continues, 2014 will see several more global names take a permanent and significant presence in the yard. In Q1, ABB Industries opened their workshop in Asry to provide onsite international factory warranties to all service jobs done at the shipyard, including dedicated machines and engineers at a workstation within the shipyard, and access to their worldwide service network. Solas signed an agreement which will see a 2,000 sq m service centre for life boats, life rafts and fire fighting and life saving appliances in Asry, Seven Seas’ new $800,000 facility has two workshops, one for metal fabrication, producing HVAC and architectural items and another shop for carpentry, which makes high quality furniture and architectural items, predominantly for offshore solutions. 

 

CORPORATE RESTRUCTURING

The shipyard has maintained its prominence in the Gulf maritime repairs market

The shipyard has maintained its prominence in the Gulf maritime repairs market

The second internal improvement initiative was a corporate restructuring to streamline the organisational structure and make operations more customer-focused. After several months of analysis and consultation, it was discovered that there were opportunities to improve the structure for greater customer satisfaction. As Berge explained, “We have an opportunity to provide our customers with better levels of efficiency, quality and safety excellence, by conducting an adjustment in the organisational structure.”

Outlining the structure in more detail, he said, “there are two main features to Asry’s new organisational structure: “Firstly, several divisions have been integrated into a more streamlined set of 10 clear and distinct primary divisions. Secondly, the recognition that the key to Asry’s future success is customer satisfaction has lead us to identify which of the 10 divisions are revenue-generating, and which are not. This important identification allows us to setup processes, reporting lines, and job responsibilities in a way that ensures customer satisfaction becomes the highest priority.”

 

RESTRUCTURING ACHIEVEMENTS

The new organisational structure was implemented throughout 2014 and has already resulted in two strategic successes; the creation of the Navy, Defence and Industrial Projects (ND&P) Department; and the establishment of a new representative office in Saudi Arabia.

Firstly, the new ND&P department dedicated to military projects is a specialised team expanding Asry’s strong experience in the defence sector to become one of Asry’s primary differentiators from other regional yards. This new move is already on its way to achieving its goal of capturing approximately 60 per cent of the regional naval market, up from approximately 45 per cent previously.

Secondly, a new representative office in Al Khobar in Saudi Arabia has been building Asry’s penetration of the kingdom’s market, particularly on the offshore side. The Saudi Arabian contribution to total sales up to June 2014 in 2014 was approximately 46 per cent, which is a significant amount, and reflects the importance of the geographical area to Asry’s business. Compared to the same period the previous year, which was approximately 18 per cent, there has been a large rise. This is predominantly due to the offshore services division which is largely Saudi-based revenue.