What you need to know about Nam Cheong's 'most ambitious' newbuild programme

It's eyeing RM1.3b vessel deliveries in FY13.

According to CIMB, underpinned by Malaysia E&P strength and an improving OSV market, Nam Cheong has launched its most ambitious newbuild programme to date. It plans to deliver 19 vessels worth RM1.3bn in total for FY13 and another 28 vessels worth RM1.7bn for FY14.

Here's more:

Keeping its ears close to the ground, Nam Cheong plans to sell its maiden 6,000 bhp AHTS. The general view among industry watchers and shipbrokers is that the 6,000 bhp AHTS of 8o-tonne bollard pull, or commonly referred to as the ‘six-eighty’ group, will be the workhorse of the near future – the next generation of the 5,000 bhp AHTS.

Although there is almost no difference in towing power between the 5,000 bhp and 6,000 bhp AHTS, the 6,000 bhp class is more versatile due to its increased deck space and accommodation.

We are impressed by Nam Cheong’s market intelligence and, based on its track record for PSV sales, believe that sales of the 6,000 bhp AHTS will similarly do well. Nam Cheong foresaw that demand for PSVs for Asia Pacific waters would gain traction and started selling this vessel class in 2011.

It has sold 15 PSVs worth an estimated RM1.3bn. Traditionally, oil majors in Asia Pacific have used the 5,000 bhp AHTS to carry out towing and supply functions.

However, as E&P shifts to deeper waters, it is more economical and fuel-efficient to use PSVs to carry out supply runs.

Nam Cheong is also building more accommodation barges and accommodation work boats. Again, this is a reflection of market trends and in response to Petronas’s hook-up and commissioning programme.

Perdana Petroleum, a beneficiary of the hook-up programme, has bought four of such units from Nam Cheong over the past year.