Sindora.com.my

The Star Online
By SHARIDAN M. ALI

EA Technique Sdn Bhd, which is 51%-owned by Sindora Bhd, has secured long-term contracts worth about RM430mil for all its three tankers under construction.

Managing director Datuk Abdul Hak Md Amin told StarBiz that the contracts were for 10 years with options to extend for another three years.

“The ships under construction comprise two clean product tankers and a black oil tanker due for staggered delivery from end of this year to the first quarter of 2010.

“Additionally, EA Technique has ordered four mooring boats, of which two will be delivered in September and another two in May next year,” he said.

“The vessels under construction have a total value of about RM200mil,” he added.

Currently, EA Technique has five clean product tankers, a liquid petroleum gas tanker and five offshore vessels.

All its tankers are in the small-size range of about 10,000 dead-weight tonne (dwt).

At a recent agreement signing ceremony with Orkim Sdn Bhd, a new tanker operator under the Sindora group, Abdul Hak told reporters the present charter rates reflected about 10% drop year-on-year due to the global economic slowdown and overcapacity.

“But I believe rates will firm up next year with an increase of 5% to 10%,” he said, adding that current rates for small clean product tankers were between US$10,000 and US$13,000 per day.

The projected increase in clean product tankers could be due to the International Maritime Organisation’s deadline for ship owners to use double-hull tankers by 2010 that may prompt the scrapping of old and single-hull tankers of over 25 years.

Clean product tankers usually carry refined products such as gasoline, diesel fuel and jet fuel.

But according to Abdul Hak, the company is protected from the fluctuation of the spot-charter market rates as most of its vessels are in long-term contracts where the rates are locked according to the agreed period.

“Nevertheless, we do expect a slight decline in revenue as we are not fully immune to the global economic downturn. We are now looking at other avenues to compensate that,” he said.

Going forward, Abdul Hak said EA Technique was looking forward to team up with Orkim Sdn Bhd, in which it would acquire 31% stake on a staggered basis for RM17.14mil.

The acquisition will be completed by January 2011. For a start, EA Technique will acquire 15.1% in Orkim for RM9.37mil next month.

Orkim currently has seven clean product tankers under construction. Sindora already has a 22% stake in Orkim.

“Once we are together (with Orkim), we will synergise our operations to complement each other,” he said.

Under the Sindora group, the shipping business is expected to have a combined fleet of 26 vessels by 2011. The division is forecast to generate an annual revenue of RM200mil by then.

On its shipyard project, Abdul Hak said it was still awaiting approval from the relevant authority and construction was expected to start next year.

EA Technique, via its wholly-owned subsidiary Johor Shipyard and Engineering Sdn Bhd, has signed an agreement with Tanjung Langsat Port Sdn Bhd to lease for 30 years a 20-acre at Tanjung Langsat Industrial Complex in Johor.

When fully operational, the shipyard can accommodate the construction and maintenance of vessels up to 10,000 dwt.