Austal Expanding Philippines, Henderson Shipyards

Australian shipbuilder Austal has started works to expand its commercial shipbuilding facilities in Western Australia and Asia.

The company said it has finalized the details of its previously announced USD 30 million investment for capacity expansion.

Austal first noted potential plans to expand its existing commercial shipbuilding facilities in mid-CY2017, following a significant increase to its orderbook at that time. This growth has continued with Austal’s current commercial vessel orderbook now extending out until early 2021, including five large vessels.

After conducting an extensive analysis, Austal has selected its existing Philippines and Henderson shipyards for the capacity expansion. Works will be funded from Austal’s ongoing cash reserves, according to the company.

The works are expected to be completed during CY2018 at Henderson and in early CY2019 in the Philippines.

Austal CEO David Singleton said the investment was primarily focused on the large ferry market where Austal holds a competitive advantage through its high-speed vessels, and modular construction approach.

“The capital investment in the commercial operation will increase Austal’s ability to secure and deliver large high speed aluminium vessel contracts in highly cost effective shipyards,” Singleton said.

“The demand outlook in the market for large high speed aluminium vessels underpins Austal’s decision to focus its investment in this sector,” he added.

Specifically, the AUD 6 million capital investment to upgrade the facilities at Henderson will include enhanced launch facilities to support large vessel construction and infrastructure upgrades to support improved efficiency across the operations.

The investment is in addition to last year’s expansion of capacity with the establishment of a Pacific Patrol Boat shipyard in a new facility in Naval Base. This facility is primarily focused on steel ship construction and will deliver the first of 21 vessels later this year.

In addition, Austal will invest circa USD 18 million to more than double the capacity of its existing Philippines shipyard. The upgrades to the facilities will include a new assembly hall that will be 120 meters long, 40 meters wide, and 42 meters high. This will enable the shipyard to assemble the largest commercial vessels.

The facility upgrades will also include additional assembly bays, material storage and accommodation facilities to allow the workload at the site to increase to more than twice its historic peak. These facilities are due for successive completion through 2018, with all construction complete by early 2019.

Singleton said the new assembly hall would enable Austal to construct two large vessels in parallel in Henderson and the Philippines.

In addition to the investment outlined above, Austal has recently commenced a small commercial shipyard operation in Vietnam. It is located in the highly industrialized and marine support precinct to the south of Ho Chi Minh City. The location was selected to provide additional aluminium construction support to Austal’s commercial operations both for modules for larger ships and to build smaller high speed aluminium vessels, the company explained.

Austal Vietnam operations are operating in a leased facility requiring only minimal capital investment. The operations are currently completing registration and qualification from both the Vietnam authorities and from DNV GL classification society.