Gulf Region Turning into Hub for Ship Repair Services

Wednesday, March 26, 2008
The Gulf region is fast turning into a major hub for ship repair services and conversion projects, with Dubai Drydocks in the UAE and the Arab Ship Repair Yard (ASRY) in Bahrain experiencing a significant increase in business volumes, as reported.There are several reasons for the growing interest of ship owners and management companies in GCC-based ship repair yards, the most important being the cost factor.
It is but obvious that ship owners will always seek the best deal possible when negotiating repair operations. Labor and steel parts are the most important components of any basic repair operation, and therefore hold the key to competitive pricing.
The GCC region enjoys a significant advantage in this regard largely due to easy availability of affordable & experienced labour from close traditional maritime markets of India, Bangladesh, Sri Lanka and the Phillipines.
The cost of repair in the Middle East is estimated at 100 to 105 compared to 250 in Japan, 140/150 in Europe, 110/115 in Turkey and Balkans. China and Indonesia though offers repairs on a scale of 50/65 and about 60/75 respectively in comparison.
Despite the low repair costs in Far-East based ship repair yards, what works towards the advantage of UAE and Bahrain is the large number of 'westbound traffic' out of the Gulf region. The region has been constantly witnessing a substantial increase in maritime trade and a large number of cargo ships, which traditionally sailed through to the Indian Sub-continent and beyond to South East Asia, are now choosing to turnaround at the Middle East ports instead, and rely on feeder vessels to carry cargo for the regional deliveries. What this essentially means is that demand for repair services for the large number of mother vessels and feeders plying in the region is on the rise.
It is but a fact that ships prefer drydocking on the routes on which they trade. Given the fact that drydocking is a highly expensive operational exercise, most shipowners prefer to drydock their vessels within the confines of the routes on which they operate. Deviation is avoided as it would further add to repair costs and operating expenses.