IHC Merwede expands production capacity

News – September 9, 2008

IHC Merwede has announced details of a major expansion of its capacity, and says it can look back on an excellent first half year in 2008.

Recent highlights include:

• Revenue for first half of 2008 of Euros 512 million, which is 54 per cent up on first six months of 2007.

• Orderbook as at 30th June 2008: Euros 1.77 billion,a 30 per cent increase

• Net profit for the first half of 2008 was Euros 48 million, a 60 per cent increase.

“The expansion of the company has continued and the financial results have increased to match,” said IHC Merwede in a statement. “A further increase in revenue and results is expected for the second half year of 2008.”

President Govert Hamers said: “At the end of the first six months of 2008, we had an order book of €1.77 billion. The ongoing expansion of our company can also be seen in the number of orders. I expect the order book to be even larger at the end of this year. Given this growth, we are working hard on expanding production capacity.”

“An important step in the process of expanding our production capacity is the establishment of International Dredgers Heusden (IDH). The goal of IDH is to build ships at appropriate locations outside our own yards, with IHC Merwede being responsible. The sales, design and calculation for the assignments will be done by IHC Merwede. IDH will be responsible for implementing the assignment.”

Another major step in this process is the investment in a new factory for strategic dredger parts in Guangzhou in southern China.

“IHC Merwede already has a factory there for supplying parts,” said Mr Hamers. “The expansion in activities means that we must invest in this new factory measuring 35,000m². Rotterdam councillor Mark Harbers will open the new factory on November 3rd this year.”

The new factory emphasises the importance of the Chinese market for IHC Merwede. With this market in mind, IHC Merwede has developed stationary cutter suction dredgers including the IHC 7025MP and IHC 8527MP types, and the vessels are also being built in China.

This activity is expanding to such an extent that IHC Merwede recently entered into a joint venture with a Chinese ship yard in Dalian to respond effectively to this market flow.

The joint venture is known as the IHC (Dalian) Dredging Vessel Technology Development Company Ltd.

The same yard in Dalian will also be building four split barges for Van Oord on behalf of IHC Merwede.

Alongside production capacity, IHC Merwede also has its own service centre in China, in Tanggu, with service engineers trained in China, a warehouse for spare parts and a mobile training centre with a simulator for training dredger operators.

In Belgrado, IHC Merwede has outsourced the building of hulls for the standard cutter suction dredgers of the Beaver type to a local yard.

Said Mr Hamers: “In time, we want to enter into a collaboration agreement with the yard for the construction of complete medium-sized Beaver cutter suction dredgers. I wouldn’t want to rule out the possibility that we may even be building (small) trailing suction hopper dredgers there.”

Section construction started at the Heusden location (otherwise known as VSH, the Verenigde Scheepswerf Heusden) a year ago. Four orders have now been received by Heusden for the construction of small or medium-sized dredging vessels.

Investment at the Krimpen aan den IJssel site is reaching the final stage, and work on the completion quay and the panel line is in full swing. IHC Merwede in Krimpen aan den IJssel will soon have a compact, complete and competitive yard for the construction of complex vessels up to 38m wide.

“Finally, we are looking throughout the entire company for additional ways of reducing throughput times in order to enhance production capacity further,” said IHC Merwede.