TAS to sell 3 tug boats to Indonesia

  • Business
  • Monday, 21 Jul 2014

KUCHING: Sarawak-based shipbuilder TAS Offshore Bhd is set to secure more sales orders for its offshore supply vessels (OSVs) to Indonesia, which it had penetrated last year.

Managing director Datuk Lau Nai Hoh said TAS would likely ink the contracts soon for the supply of three anchor-handling tug supply (AHTS) vessels to an existing Indonesian client.

He told StarBiz that TAS had delivered one AHTS vessel each to two Indonesian clients, who had placed the orders in March and October last year. The two vessels were the first to be sold to Indonesia, which is TAS’ traditional key market for the supply of tugboats for the mining and timber industries.

“We are also in advanced negotiations with interested foreign parties for the supply of three similar OSVs,” he added.

Over the years, TAS has established a firm footing in the United Arab Emirates (UAE), where it has sold more than 20 OSVs.

For the financial year ended May 31, 2014, TAS posted a sharp increase in group revenue to RM254.3mil from RM138mil in 2013 due to robust sales of the OSVs and other types of vessels.

Sales to UAE contributed RM100.6mil, or nearly 40%, to group turnover, while revenue contributions from Indonesia was RM75.4mil, Singapore RM36.7mil, Saint Vincent RM32.3mil and Malaysia, RM9.3mil.

The group’s net profit jumped to RM28.8mil from RM13.5mil during the period under review.

Lau said the group was currently constructing six more OSVs in an established contract shipyard in China, adding that some of these build-to-stock vessels would be ready for sale by late this year and next year.

He said the AHTS vessels built by TAS were priced between US$12mil and US$15mil each.

“The increase in demand for energy and high-resilient crude oil prices of about US$110 per barrel will continue to spur oil majors to maintain, if not increase, the expenditures on (oil) exploration, and particularly, production.

“Increase in demand for modern jack-up rigs entering the market will result in the need for more OSVs. Thus, we expect the demand for both platform support vessels and AHTS vessels to be strong,” he added.

Lau expects some of these offshore developments to come from Indonesia, Malaysia and Myanmar. He also foresees the oil and gas industry in the region requiring the provision of various OSVs.

“We are optimistic in our outlook that new demand for OSVs with higher technical specifications suitable for deep-sea operations would grow, and demand for OSVs used in shallow waters remains firm.

“Our build-to-stock business model has propelled the group to a favourable position to meet the market demand for the OSVs, and a shorter delivery time period required by the buyers,” he said.

TAS outsources the construction of most of the group’s OSVs to the contract China shipyard, while its shipyard in Sibu is involved in the construction of tugboats, landing craft and other types of vessels.

“The tugboat market has slowed down,” said Lau, adding that the group’s order book currently stood at some RM330mil.

On the plan by the group to venture into the vessel-chartering business, Lau said TAS was still exploring opportunties and working on a possible tie-up with a strategic partner.

Last Thursday, TAS appointed former Sarawak agriculture director Datuk Mohammed Sepuan Anu, 68, as its chairman.

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Business , TAS Offshore


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