ECONOMIC DEVELOPMENT - UAE Interact

120UNITED ARAB EMIRATES YEARBOOK 2006ECONOMIC DEVELOPMENT121Mussafah district, ADSB is the only shipbuilding facility in the Arabian Gulf withthe capability to build and repair sophisticated naval and commercial vessels. It isbuilding an increasing number of naval vessels for the UAE Navy and commercialboats for a wide range of clients in the shipping and related industries.In February 2005 ADSB signed a contract with the Omani Ministry of Defencefor the construction of a 64-metre naval landing craft for the Royal Navy of Oman.The vessel has been designed locally and contains a number of special featuresto satisfy the customer’s operational requirements. This is the first naval newconstructioncontract awarded to ADSB from outside the UAE.ADSB’s facilities for manufacture, repair and upgrade of naval and commercialvessels have been greatly enhanced by new high-tech composite workshops.The new facility provides ADSB access to the important ‘Military and CommercialComposite Vessel’ market that exists within the region. Its new 4400-square-metremoulding workshop for advanced composite vessels was completed in May 2005.These new workshops are sized for the construction of vessels up to 50 metresin length.ADSB will deliver the first of four naval vessels that constitute the US$500 million(Dh1.83 billion) Baynunah contract to the UAE Navy in 2008. The other threevessels forming part of this order will be ready at approximately six-month intervalsfollowing the first.The non-military side of ADSB’s shipbuilding and repair business has also beenexpanding at a rapid pace, and it now completes more than 150 commercial shiprepair jobs each year. The company is competing for commercial contracts fromoperators of tugboats, barges and support vessels for the oil and gas industry,including the Abu Dhabi National Oil Company (ADNOC) and its subsidiaries. Agrowing number of local companies are showing interest in ADSB for their repair,refit and new building programmes.ADSB’s total revenue for the first half of 2005 exceeded Dh20 million, while netprofit for the period reached Dh10.6 million, demonstrating growth of 9.5 per centcompared to the first six months of 2004.Maritime City’. Boats made in the UAE tend to benefit from highly skilled labour andrelatively low operating costs. Six large manufacturers dominate the UAE’s boatbuildingmarket and more than 500 luxury yachts are in operation in the country.Gulf Craft, the UAE-based builder of leisure boats and luxury yachts, had aboutDh100 million in sales in 2004. The company has a good export market and isinvesting Dh80 million in two new shipyards in the UAE – one of which will beginconstruction in 2006 within Dubai Maritime City.Emirates Ship Investment Company (EShips)Emirates Ship Investment Company LLC (Eships) is the new name for CombinedCargo UAE LLC (CCU). The original company was established in 1996 as a shipinvestment company based in Abu Dhabi. Eships currently has three shareholders:Oman & Emirates Investment Holding Company has a 34.22 per cent stake, whilstAbu Dhabi Investment Company and Mubadala Development Company each havea 32.89 per cent stake.Eships’ fleet profile has changed considerably and is growing at a fast pace.The company still operates trans-shipment vessels and bulk carriers, but therehas been a drive towards small IMO II/III products tankers and the company ismoving into the LNG sector. Eships plans to become a major regional shippingcarrier with a strong presence in the Arabian Gulf, Indian Ocean, South Asia, andSoutheast Asia. It intends to be operating at least ten bulk carriers, 20 tankers andfour LNG carriers by 2010.The company has consistently turned a profit since it was established in 1996.In 2005 Eships had a consolidated balance sheet with assets in the region ofUS$76 million. Net income in 2004 was around US$19.8 million from revenuesof close to US$46 million. In comparison, revenues in 2003 totalled some US$28million, with a net profit of just over US$6 million.The company’s strategy now is to invest in Panamax and Capesize tonnage,either through chartering in vessels or direct ownership, depending on the market.In mid-2005 Eships began its foray into the Panamax market by chartering theJapanese-controlled, 76,000-dwt new-building bulk carrier Penda Bulker.Other Shipbuilding CompaniesDubai Drydocks is investing Dh165 million in a new shipbuilding venture calledSafina. The latter will be located next to the Dubai Maritime City and will be ableto build small, medium to large vessels. Dubai Drydocks has already built 43vessels. It recently won a contract from ENOC to build four bunkering tankers,valued at US$40 million (Dh144 million), its largest order so far.Boat-BuildingThe region’s boat-building industry is experiencing strong growth, fuelled by thedevelopment of marinas and massive waterfront housing developments such as‘The Palm’ islands, ‘The World’, ‘Dubai Waterfront’, the ‘Waves’, and ‘DubaiAbu Dhabi National Tanker Company (ADNATCO)ADNATCO is a wholly-owned subsidiary of Abu Dhabi National Oil Company. Inmid-2005 it announced a fleet renewal programme. At that stage ADNATCOowned and operated a fleet of five product tankers, a molten sulphur carrierand two RoRo (roll-on/roll-off) vessels. In 2002, ADNATCO started its RoRobusiness after signing a deal with Abu Dhabi-based petrochemical companyBorouge to transport polyethyelene to Mina Zayed and Jebel Ali in Dubai.Dubai Port AuthorityIn 2004, the Dubai Ports Authority (DPA) posted a record growth of almost 25per cent in the total number of containers handled at Port Rashid and Jebel Ali