Singapore Technologies Engineering’s (ST Engineering) Marine business has acquired the site and assets of an existing shipyard in Singapore at 55 Gul Road from Keppel FELS.
The site and assets were acquired for $95 million for ST Engineering’s commercial ship repair business.
The assets acquired include three floating docks, existing buildings, workshops, and machinery.
“This asset purchase obviates the need to build a greenfield shipyard, which would require much higher construction and material costs as well as lead time,” says ST Engineering.
The new Gul yard replaces ST Engineering’s Tuas shipyard, as its lease will expire at the end of 2024.
The new yard measures 141,000 sqm with a gross built up floor area of 74,593 sqm. It has a remaining lease until August 2030 which can be extended by another 20 years. It will be progressively upgraded to a smart shipyard that includes end-to-end digitalisation processes.
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ST Engineering has another shipyard at Benoi which is mainly for shipbuilding.
According to the group, its ship repair business in Singapore has “performed well”, adding that it has been “profitable over the years”.
“Taking over this brownfield site versus constructing a replacement greenfield site is an effective way to minimise capex. More importantly, building on the existing infrastructure and facility enables us to start operating immediately and effectively with minimal disruption to our operations,” says Ng Sing Chan, president, ST Engineering’s Marine business.
Shares in ST Engineering closed 5 cents higher or 1.35% up at $3.76 on Feb 2.