Austal Shipbuilding Expands to the Phillipines

Leading global shipbuilder and defense contractor Austal has acquired a shipyard in the Philippines as part of its strategy to regionalize its manufacturing base for commercial vessels.

The $7 million acquisition of the former FBMA Marine shipyard enables Austal to establish shipbuilding operations at the West Cebu Industrial Park at Balamban, in the province of Cebu. Austal will invest a further $5 million to enhance the shipyard’s existing facilities.

Austal plans to commence vessel construction in the first quarter of 2012, dependent on orders, and expects to employ about 30 workers during the start-up phase. Future workforce growth is expected in line with market demand, and the site allows for efficient expansion of the facility when future operational and market conditions require.

Austal Chief Executive Officer Andrew Bellamy said the acquisition of the former FBMA shipyard is an important milestone in Austal’s corporate strategy to meet the requirements of key commercial vessel markets by further regionalizing its shipbuilding operations.

“Our strategic review earlier this year found that there is strong demand in specific segments of the international commercial vessel market, such as fast crew transfer boats, work boats and 30 meter to 50 meter ferries.”

“With our Australian and United States manufacturing operations increasingly defense focussed, we identified the need to regionalize our manufacturing base in order to be successful in those commercial vessel markets.”

Austal will primarily construct small and medium sized aluminum passenger ferries, work boats and transfer vessels such as Austal’s Wind Express series of wind farm support vessels at the Philippines shipyard. The shipyard is purpose-designed and built for building aluminum vessels of that size and type and will also have the skilled workforce and facilities to be able to undertake service and maintenance work. Austal is retaining its large commercial vessel manufacturing capability in Australia.

The Philippines shipyard has a history of aluminum vessel fabrication, and has previously delivered medium and high speed ferries, patrol boats and specialist work boats to operators based in Europe, Mexico, Australia and Asia.

Austal’s significant intellectual property in the design and construction of commercial vessels will be utilized at its Philippines operations, which will help ensure that Austal’s quality and performance standards are maintained.

“Our planned infrastructure enhancements combined with the existing pool of skilled local tradespeople and ancillary industries will support the same safe, efficient, high quality production we achieve in our other shipyards,” said Mr Bellamy.

“Austal now has an order book of approximately $1.8 billion, nearly all of it related to defense work and over 80 percent attributable to our US operations. The new shipyard in the Philippines provides the right foundation to grow that order book further through increased commercial vessel sales,” he said.

The acquisition of the Asian shipyard will have no adverse effects on Austal’s Australian and US operations, with both manufacturing facilities currently under contract for several significant multi-vessel, multi-year defense programs.

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