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Austal may start production at Cebu shipyard in Q1

in Manila

AUSTRALIAN shipbuilder Austal expects to begin building vessels at its newly acquired Philippine shipyard in the first quarter of 2012, depending on orders. And it will be investing US$5 million to upgrade the shipyard's existing facilities.

As part of a strategy to regionalise its manufacturing base for commercial vessels, Austal in November last year bought for US$7 million the former FBMA Marine shipyard at the West Cebu Industrial Park at Balamban in Cebu province, central Philippines.

The 15-year-old FBMA Marine shipyard was established by the Philippine conglomerate Aboitiz Group to build aluminium fast ferries and utility vessels for overseas clients.

In 2009, the shipyard stopped operations as orders dried up because of the global economic crisis.

Austal's recent purchase, however, has given the specialised shipyard a new lease of life.

Austal's chief executive officer Andrew Bellamy said the acquisition is an important milestone in Austal's corporate strategy to meet the requirements of key commercial vessel markets by further regionalising its shipbuilding operations.

'Our strategic review earlier this year (2011) found that there is strong demand in specific segments of the international commercial vessel market, such as fast crew transfer boats, work boats and 30 metre to 50 metre ferries,' he said.

'With our Australian and United States manufacturing operations increasingly defence focused, we identified the need to regionalise our manufacturing base in order to be successful in those commercial vessel markets.'

Austal will primarily construct small and medium-sized aluminium passenger ferries, work boats and transfer vessels such as Austal's Wind Express series of wind farm support vessels at the Philippine shipyard.

The shipyard is purpose-designed and built for building aluminium vessels of that size and type and will also have the skilled workforce and facilities to be able to undertake service and maintenance work.

Austal is retaining its large commercial vessel manufacturing capability in Australia.

The Philippine shipyard has a history of aluminium vessel fabrication, and has previously delivered medium and high-speed ferries, patrol boats and specialist work boats to operators based in Europe, Mexico, Australia and other parts of Asia.

Austal's significant intellectual property in the design and construction of commercial vessels will be utilised at its Philippine operations, which will help ensure that Austal's quality and performance standards are maintained.

'Our planned infrastructure enhancements combined with the existing pool of skilled local tradespeople and ancillary industries will support the same safe, efficient, high-quality production we achieve in our other shipyards,' said Mr Bellamy.

'Austal now has an order book of approximately US$1.8 billion, nearly all of it related to defence work and over 80 per cent attributable to our US operations. The new shipyard in the Philippines provides the right foundation to grow that order book further through increased commercial vessel sales,' he said.