Growth in Ship Building and Repair in Dubai
The Energy Year talks to Jamal Abki, General Manager of Grandweld Shipyards, about how the company adjusts to market volatility and the outlook for the shipbuilding industry. Grandweld is a fully integrated shipyard providing shipbuilding, ship repair, and engineering solutions to serve the global offshore and marine industry.
How would you describe the company’s trajectory?
With a 40-year track record, we have pioneered the shipbuilding and design industry in the UAE and the region. We introduced several ship designs which are very successful and became very popular among ship charter companies and oil majors. Grandweld offers a full range of services from ship design and ship building to repair, conversion and maintenance. We now have customers from around the world, with a loyal base of tier 1 companies from Singapore, Europe and the GCC region.
The facility we operate is part of the DMC [Dubai Maritime City] site. We built it ourselves based on our needs for productivity and efficiency. It is optimally designed and also follows environmentally friendly standards.
DMC has extraordinary facilities including two ship lifts and a highly flexible drydocking system with the capacity to dock up to 32 vessels at a time. It does up to 10 docking and undocking operations per day. With direct access to the sea, DMC has its own large port with almost 2 kilometres of wharfage that are especially set up for ship repair and ship building companies.
We are the largest and most successful company within the DMC complex, accounting for about 35% of the business here, with by far the most market share. Around 70% of our activities are directly or indirectly related to the oil and gas industry and the demand we experience is about 50% for repair services and 50% for shipbuilding.
How do you adjust to the volatility of the markets?
The marine industry, especially in our sector, is very much dependent on the oil and gas industry, which has gone through challenging times. We monitor these developments and we see it as important to diversify our activities from pure oil and gas works. We are obviously still ship designers, builders and repairers, and we now have about 30% of our business from trading ships including bulk cargo vessels and tankers, for example. We are also looking at opportunities in the wind farm industry. The way ahead is to work with the challenges and be prepared as a company to overcome the ups and downs of the energy industry.
One way we have innovated is through the creation of another division for our ship repair services. Since the space for drydocking ships is saturated, we have expanded afloat ship repair services, which includes repairs of vessels in various ports, at anchorage and will also include riding squads for vessels while sailing. We have always done afloat ship repairs however our clients are requesting more of our high-quality services in this sector.
Where do you see the shipbuilding industry heading?
There are good signs that make us optimistic about the stability and growth of the oil and gas industry and with that the marine sector, recent years’ turmoil has had a significant impact on the market. Strict finance terms within the banking industry has made ship owners careful with asset procurement. Owners are also more cost sensitive than before and there is a shift in the industry culture pushing owners to revamp old assets and upgrade them one way or another to meet the requirements and save costs.
With oil production in the region high, we see increasing pressure to expand fleets, and vessel charter rates are slowly increasing. This has had a very positive effect on the ship building and ship repair industry, however charter rates still need some time to catch up with the capital cost of new ships. The cost constraints have been positive for our ship repair business with subsequent growth in our market share in this sector that is also due to our excellent reputation in this industry, while the ship building sector has been strong.
Companies rely on our ship building expertise and our ship building order book has been full for several projects for these oil companies. We have a direct relationship with major oil companies such as ADNOC and Aramco which we are currently working on. During COVID we were busy building ships and since then we also secured orders with Jana Marine Services in KSA and other customer from Europe.
How crucial is technology adoption for your company?
As a company, you need both the technology and the experienced people. We truly believe that we have the best teams around, be it for design or production, and we continuously train them and lead them so as to grow all together. Investing in technology is important to us and we have invested strongly in digitalisation of our processes over the last 2 decades. For example, our productivity has been vastly improved as we are able to build 3D models for our designs faster than our competitors. We have installed factory machinery that is CNC operated and integrated with our IT infrastructure and we are also now implementing AI for certain parts of our processes. There are aspects of our business where these technologies are not easily integrated, but these challenges are opportunities for us, as our successes in digitisation have definitely given us an advantage over our competitors.
We are still looking at the areas of production which are most standardised to see how we can fit the technology in, especially depending on the types of vessels. It’s a work in progress and we are investing in that direction.
In which ways is sustainability being integrated into your activities?
Sustainability is an important question for us. Within the company we have established certain management systems to measure our impact and record our improvements. Our building is LEED Gold certified, and so has aspects that contribute to lowering our carbon footprint such as solar cells. We have an extensive recycling program and we also changed our abrasive blasting practices to the much more environmentally friendly water blasting system.
On the other hand, we are also coming up with new concepts for the vessel design and production process. We have developed hybrid systems with batteries and generators and we are increasingly collecting data about our vessels and have found that up to 50% of carbon reduction can be achieved through simply rearranging the systems and power requirements – such as horsepower reduction – of the vessels.
Could you share your vision for the future of Grandweld Shipyards?
One element for the next couple of years will be to further look for opportunities to diversify our work towards new sectors. We do see a lot of tenders issued and we are participating in a number of these. We are building many international clients, including for European clients, for example, and also see the West Africa and Asian markets as potential avenues for expansion. We will continue to nurture our strong base in the GCC region while expanding our shipbuilding exports and ship repair services for our international customers.