Saudi yard inks deal to localize rig product manufacturing
International Maritime Industries (IMI), the largest maritime yard in the MENA region, has signed a long-term agreement with JSA Loadmaster to enhance its efforts to localize its supply chain in Saudi Arabia.
The agreement will enable JSA Loadmaster, a joint venture between Jackup Structures Alliance (JSA) and Loadmaster Industries, to localize its rig product manufacturing in Saudi Arabia and boost its lifecycle and maintenance support.
Through the agreement with IMI, JSA Loadmaster is expected to contribute around SAR 750 million ($200 million) to the Saudi economy over the next eight years. The company will produce rig rack and chord, as well as derricks and other engineered structural products in the Kingdom.
IMI, a joint venture between Aramco, Lamprell, Bahri and Hyundai Heavy Industries, will benefit from being able to source products locally for rig manufacturing, reducing the cost of importing products from abroad. As part of the agreement, IMI will guarantee the ordering of rack and chord for four rigs, with an extension option of an additional two rigs.
The long-term agreement was signed by Fathi K. Al-Saleem, President and Chief Executive Officer of IMI and Jay Fogal, Managing Director of JSA Loadmaster Arabia and President and CEO of Jackup Structures Alliance, during a ceremony at Dhahran, Saudi Arabia.
Fathi K. Al Saleem said: “As part of IMI’s localization strategy, the agreement lays the foundation for the establishment of a local, cost-competitive manufacturing operation where all manufacturing and delivery activities occur in the same place”.
Jay Fogal said: “Our team embarked upon this journey with IMI and ARO four years ago with the support of Loadmaster’s Chairman, David Russell. As we developed our understanding that we could add significant value to the IMI initiative, we formed JSA Loadmaster under the leadership of our Middle East VP Shaun Hanton, supporting Saudi Vision 2030”.
IMI’s localization efforts are focused on the procurement of materials and services used in rig and vessel production, as well as maintenance, repair and overhaul (MRO) practices. The company intends to form more long-term partnerships with suppliers that are committed to localizing the manufacturing of their products in Saudi Arabia.