120UNITED ARAB EMIRATES YEARBOOK 2006<strong>ECONOMIC</strong> <strong>DEVELOPMENT</strong>121Mussafah 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 <strong>UAE</strong> 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 <strong>UAE</strong>.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 <strong>UAE</strong> 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 <strong>UAE</strong> tend to benefit from highly skilled labour andrelatively low operating costs. Six large manufacturers dominate the <strong>UAE</strong>’s boatbuildingmarket and more than 500 luxury yachts are in operation in the country.Gulf Craft, the <strong>UAE</strong>-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 <strong>UAE</strong> – 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 <strong>UAE</strong> 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
122UNITED ARAB EMIRATES YEARBOOK 2006Port. Since the establishment of the DPA in 1991, it has demonstrated consistentand steady growth. In 2004 DPA accommodated 6.42 million TEUs (twenty-footequivalent units, a standard shipping container) and was ranked as the tenthlargest port in the world. In mid-2005 DPA announced that it had achieved a 22per cent increase in container traffic in the first half of the year compared to thesame period in 2004, continuing its progressive performance in port operations.Loading and discharging of forest products grew by 9 per cent, foodstuff increasedby 21 per cent, metals increased by 8 per cent and petroleum products grew by23 per cent compared to 2004. DPA handled a total of 3,631,108 TEUs and 7651vessels of all types in the first six months of 2005. Container vessels made up3279 of the total vessels, marking a 34 per cent increase over 2004.Expanding its port management agreements has been a key plank in DPA growthstrategy and in July 2005 The Abu Dhabi Seaport Department and Dubai PortsAuthority (DPA) executed a Management Services Agreement for the operationof Mina Zayed. Under the terms of the agreement, DPA took over the day-todaymanagement of operations of Mina Zayed, which is being integrated intothe global DPA network and now being marketed jointly with other ports such asJebel Ali and Mina Rashid. This strategic alliance enables the <strong>UAE</strong> to furthercompete at the regional and international levels, making a positive contributionto the national economy.In May 2005 Dubai Ports International (DPI) took charge, under a 30-yearconcession, of the Port of Fujairah’s container terminal, which is now known asDPA (Dubai Ports Authority)-Fujairah Terminal. DPI is spending around Dh568million (US$155 million) to develop and operate the terminal. While DPI willoperate the container terminal, all non-containerised cargo, such as general cargo,oil, aggregate and project cargo, will continue to be handled by the Port of Fujairah.The agreement between the Fujairah Port Authority and DPI also includes anoption to mutually extend the concession by a further 20 years, potentially takingthe contract through to 2055. DPI also has contracts for operating five internationalports: Jeddah in Saudi Arabia, Djibouti, Vizag and Kochi in India and Constanzain Romania.In late 2004 DPI acquired CSX World Terminals a leading international terminaldeveloper and operator headquartered in the United States, with operations in Asia,Europe, Australia and Latin America. This transaction makes Dubai Ports, whichincludes DPI and DPA (Dubai Ports Authority), the sixth largest global ports operator.Dubai Maritime CityDubai Maritime City, which is being designed as a multidimensional centre forthe global maritime community, will accommodate up to 5000 companies inoffices and workshops. A range of clustered facilities currently scattered aroundDubai and the region will be housed in the new city.
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