Malaysian shipbuilders advised to clear backlog of orders

17 November 2006

Malaysian shipbuilders advised to clear backlog of orders

Malaysian shipbuilders must buck up and clear backlog orders fast or risk losing their competitiveness and business to foreign players, Maritime Institute of Malaysia (MIMA) director general Datuk Cheah Kong Wai said.

Speaking at the opening of MIMA’s seminar on The State and Future of Malaysian Shipyards: Towards Improved Capability and Capacity on Thursday, he said a recent report said local players were not keeping up with their regional counterparts in terms of expediting their jobs.

“Needless to say, if this situation persists, our yards will lose their competitiveness and business to foreign yards,” he said.

Cheah said the operations at the local shipyards were hampered by lack of skilled manpower and technological abilities, which partly explained the long time they took to meet the orders.

Many were now working overtime, mostly to meet backlog orders that could stretch well into 2008 due to a booming global shipping industry, he said.

Malaysia imported RM3.2bil worth of various marine transport products last year compared with RM2.2bil worth of exports, mainly contributed by petroleum production platforms.

Major imports items, including cruise ships, ferry boats and cargo barges, accounted for a staggering RM2.2bil of the total imports.

Cheah said the recent development in shipbuilding and shipyard industry did not augur well for the government’s move to promote shipbuilding and ship-repairing as one of five strategic thrusts for the long-term growth and viability of the marine transport sub-sector as well as to reduce the outflow of capital for the acquisition of marine transport products.

Malaysia, in many aspects, is trailing way behind its regional counterparts like Singapore, South Korea, Japan, as well as China on a backdrop of promising and booming global shipbuilding industry.

“To compound the matter, there is rising competition from newcomers in developing countries, like Vietnam and Thailand that offer low labour cost and harbour big ambitions, carving their names in shipbuilding,” Cheah said.

Although local shipyards had made much improvement over the years in many aspects, he said there was still much work to be done for Malaysia to be considered a serious player in the sector.

“While the outlook for global shipbuilding sector is bullish and exciting, our yards have not been able to truly capitalise on the sector’s purple patch and live up to the nation’s growing maritime reputation,” he said.

Local shipyards, according to him, were also saddled with problems of manpower, rising operational costs and excess capacity.

Many have limited shipbuilding and ship-repairing capabilities and specialise mainly in building and repairing low-value and small vessels.


Source: http://biz.thestar.com.my