Colombo Dockyard gears to face market challenges

Colombo Dockyard was set up in August1974 to provide ship repair facilities. The shipyard has evolved over the past four decades from a small-time workshop to a full service ship repair facility acclaimed as an international shipyard competing with the best in the world.

The shipyard was also entrusted with the responsibility of building small patrol boats for the Navy and work boats for the ports during the early era.

The ship repair sector has been driving the shipyard to greater heights over the past decades, across recessions, 1990s, 2008-13 and boom periods, 1980s, 2004-7.

The shipbuilding sector has been the driving force of the technological development of the shipyard through the acquisition of the skills and knowledge to build sophisticated Offshore Support Vessels for the oil and gas exploration and production companies.

1974-1984: Formative decade

In the early days the workforce was small and the Colombo Dockyard team handled many challenging repair projects, gaining a reputation among international callers, especially Greek, Indian, Pakistani and Russian.

Many foreign vessels were Greek trampers and Russian research vessels and tugs that were accommodated in Drydocks one, two and three. The local fleet owned by the Ceylon Shipping Corporation (CSC) were regular callers patronising Colombo as their home port.

This was the formative decade of the shipyard, which was guided by visionary leaders, who had identified the potential of Colombo.

Boat building was done on a small-scale, building to meet the needs of the Navy, such as 14-metre and 20-metre patrol boats, 40-metre Offshore Patrol Vessels and towing tugs, barges, launches for the Sri Lanka Ports Authority.

1984-1994: Consolidation and expansion

Many historical milestones were accomplished during this decade. The 125,000 DWT drydock was commissioned in1988. The first tanker was secured at dock number four (MT Arun Khetarpal owned by the Shipping Corporation of India).

The land mark repair project of collision damage repairs to MT Palanimalai (also owned by the Shipping Corporation of India) was completed within 25 days, where 100 tons of steel was renewed. During the decade various vessels from tankers, cattle carriers, French Naval vessels, general cargo vessels to bulk carriers were handled at the Dockyard. Some of the unique vessels handled during this era were the French naval vessel Jules Vern, MV Dulos (Library Ship) and MV Mukairish Al Sades (cattle carrier).

Shipbuilding activity too grew gradually with the experience gained and the company began exporting boats to the Maldives and the Republic of Burma. Shipbuilding also augmented its activities by gaining aluminium boat building technology to build fast patrol boats for the Sri Lanka Navy.

The turning point for the shipyard from being Government-owned to a fully privatised facility with a majority holding by Onomichi Dockyard Co. Ltd, Japan came in 1993.

1994-2004: Venturing into complicated projects

This was the decade which transformed the facility to a truly international shipyard, with the influence of the Japanese management. ISO 9001: 2000 quality certification by Lloyds Register Quality Assurance, UK was a significant milestone during this era.

The repair sector was performing the majority of tanker repairs in drydock number four, where in some years we had carried out drydocking of 12-14 tankers annually.

This era also marked the first Offshore Drill unit repairs. Shipbuilding progressed well with the majority of the aluminium fast patrol boat of the Sri Lanka Navy being supplied by Colombo Dockyard. Wth the Sri Lanka Ports Authority's modernisation of the Colombo Port, the building of complex harbour berthing tugs was entrusted to Colombo Dockyard.

As a socially responsible organisation, yard safety practices were given high priority during this decade. This also helped the company to take on mega projects in the marine and land-based sector, such as the construction of the LPG storage terminal for Shell in Muthurajawela.

2004-2014: Ship repair sector goes international

This decade had a mixed effect on the repair industry, as the shipping market peaked to its highest levels in history (2007-8) and, thereafter, the historic economic crash.

The tanker fleet which had been the shipyard's core business generator had been phased out, due to IMO double hulled tanker regulations coming into force in 2010. As a result multiple drydocking of various types of smaller vessels were the common feature for dock number four (125,000 DWT) in recent years.

This decade can be considered as one of the most important eras of the shipyard, highly sophisticated and challenging projects were handled, such as retrofit repairs to ORV Sagar Kanya (2006) and retrofit repairs to Floating Dock FDN -1 (2005).

The experience and the confidence gained from successfully handling these projects paved the way for the shipyard to venture aggressively into international shipbuilding projects focusing on the offshore industry.

Passenger vessels

This was a significant turning point in the history of the shipyard, from a small player to a truly international ship repair and building facility.Since the Shipyard stepped into the offshore sector in 2005, there has been no turning back as the Shipyard's market position has grown from strength to strength and it has carved out a position as a reputable Offshore Support Vessel building yard.

These Offshore Support Vessels are in operation in oil exploration hot spots such as Indonesia, Malaysia, Brazil, Russia, India, Africa and Singapore. The shipyard has also been successful in building passenger vessels. We built 250-passenger cum 100-ton cargo vessels and 400-passenger cum 250-ton cargo vessels for the Government of India, which demonstrates the credibility the shipyard has achieved internationally.

In 2008-9 the ship repair sector recorded the highest revenue in the history of the shipyard, even though the global economy had crashed and the shipping industry experienced recession in 2008.

The end to terrorism in May 2009, was a great relief to all business ventures in the country, especially in the shipping sector. The negative aspects such as high war-risk premium for vessels calling at Colombo had been gradually lifted creating a level playing field. The positive image of Sri Lanka on all fronts also played a key role in attracting high-end ship owners to Colombo.

Experience

Colombo developed a reputation as a hub for Offshore Support Vessel repairs during this period, with many of the offshore support vessels from Bourbon Offshore, France, Tidewater-USA, ONGC, SCI and Great Offshore, India, coming to Colombo for repairs. This resulted in the yard repair teams gaining a wealth of experience in the high-end offshore projects.

Colombo Dockyard's services and capacity were recognised by global ship owners and managers. Frame Agreements with Bernhard Schulte Ship Management (HK) and AP Moller Maersk to repair their fleets were signed.

This is a proud achievement for Colombo Dockyard, competing head to head with bigger shipyards across the globe.

Competition has increased in giant leaps, with many new facilities launching operations regionally and internationally such as in Pipavav Defence and Offshore Engineering Company Limited, Gujarat, L and T Shipbuilding, Katupalli, Tamil Nadu, Sembmarine Kakinada, Chowgule and Company (Pvt) Ltd. (Shipbuilding), Goa. International yards: Oman Shipyards (Duqm) and Nakilat Damen Shipyards, Qatar along with the many Chinese yards also intensified competition.

Future challenges

The tight market conditions over the past few years will continue for the next few years. We have managed to survive one of the longest recessions in shipping history up to now. Collectively as one team we have to work to increase productivity and reduce cost. We have to compete with regional shipyards that have come up in numbers over the past decade.

- Colombo Dockyard media release