Sri Lanka Dockyard says ship building recovery not in sight yet

ECONOMYNEXT – Sri Lankan shipbuilder Colombo Dockyard said 2017 was yet another tough year for ship yards despite an uptick in orders with a full recovery in its main market still a year or two away.

The yard, majority owned by Japan’s Onomichi Dockyard, has been making losses caused by the cancellation of contracts owing to the shipping and oil price slump which hit demand for new ships and repairs.

Its sales rose 21% in 2017 from the previous year but it still made a loss, albeit lower than in 2016.

“Despite an uptick in ordering, 2017 was another difficult year for the shipbuilding industry, with contracting remaining well below trend and most shipyards continuing to feel the pressure,” Colombo Dockyard chairman Toru Takehara.

“Some sectors saw improved contracting activity, while deliveries remained relatively firm, but shipbuilders will be looking to see more positive changes before predicting a return to better times,” he told shareholders in the company’s annual report.

Colombo Dockyard had been focussing on the Offshore Support Vessel (OSV) sector in recent years.

Takehara said the market was not active yet because of the long term recession of the crude oil production industry.

“Taking into consideration of the laid-up OSVs worldwide, it will take another 1 or 2 years for demand’s to become active again,” he said.
(COLOMBO, March 12, 2018)

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