ASRY, one of the Middle East’s most established shipyards, has maintained its position in 2014 despite challenging market conditions by focusing on internal improvements which have boosted operational efficiency and created departments leading to revenue growth.
Two main projects in particular have resulted in strong revenue retention – Project Jupiter, the initiative to make ASRY the leader[ds_preview] in Onsite Specialist Contractors; and a corporate re-structuring, which has boosted operational efficiency and created departments leading to revenue growth.
In general terms, the maritime repair market in 2014 continued to remain under pressure from over-supply of repair capacity, ship owners restricting their repair scopes, and the general age profile of the ships remaining low therefore requiring less maintenance evidence of this market tightening shows when looking at the number of vessels docking for repair at ASRY, which is similar to 2013, yet yielding smaller revenues than last year. This indicates the revenue-per-vessel is down in 2014, which is an indicator of general market hesitancy.
In ASRY Chief Executive Nils Kristian Berge’s words, »Ship owners are still feeling the effects of the global shipping downturn, and as a repair facility it is our responsibility to give them peace of mind that their maintenance budgets are being used in the most efficient manner possible. ASRY is already known for its timely quality service, but by investing in even greater excellence, we can reassure our customers, new and old, that every dollar they spend on maintenance with us is providing essential optimisation to make their fleet as profit-efficient as possible.«
Having anticipated the ongoing market pressure, ASRY’s Senior Management identified that the most successful way to maintain and grow market share in 2014 would be through absolute excellence in quality of service. To this end, two initiatives were implemented at the start of the year with the aim of staying one step ahead of the competition.
The first was Project Jupiter. 2014 has seen several global contractors, including ABB, SOLAS, MAN and Seven Seas, increase their investment at the shipyard to provide more substantial services to ship and rig owners. Having a smart mix of contractors based in the yard makes customers’ repairs quicker and more convenient. With several more international names lined up to boost their presence at the Bahrain-based shipyard, current investment from Specialist Contractors in the yard in 2014 already totals approximately 3.7mill. $, and with new confirmed clients in the pipeline, that number looks set to rise to at least 9.2mill. $ by the end of the year.
ASRY already accommodates 33 Specialist Contractors, including leading names such as Alfa Lavel, Gates, Blohm + Voss, Harris PYE, Goltens, and more. As Project Jupiter continues, 2015 will see several more global names take a permanent and significant presence in the yard. ABB Industries opened their workshop in ASRY to provide onsite international factory warranties to all service jobs done, including dedicated machines and engineers at a workstation within the shipyard, and access to their worldwide service network. SOLAS signed an agreement which will see a 2,000m2 service centre for life boats, life rafts and fire fighting and life saving appliances in ASRY, Seven Seas’ new 800,000$ facility has two workshops, one for metal fabrication, producing HVAC and architectural items and another shop for carpentry, building high quality furniture and architectural items, predominantly for Offshore solutions.
The second internal improvement initiative was a Corporate Restructuring to streamline the organisational structure to make operations more customer-focused. After several months of analysis and consultation, it was discovered that there were opportunities to improve the structure for greater customer satisfaction. As Berge explains, »We have an opportunity to provide our customers with better levels of efficiency, quality and safety excellence, by conducting an adjustment in the organizational structure.« Outlining the structure in more detail he says, »there are two main features to
ASRY’s new organizational structure: Firstly, several divisions have been integrated into a more streamlined set of ten clear distinct primary divisions. Secondly, the recognition that the key to ASRY’s future success is customer satisfaction has lead us to identify which of the ten divisions are revenue-generating, and which are not. This important identification allows us to setup processes, reporting lines, and job responsibilities in a way that ensures customer satisfaction becomes the highest priority.«
The new organizational structure has already resulted in two strategic successes; the creation of the Navy, Defence & Industrial Projects (ND&P) Department; and the establishment of a new Representative Office in Saudi Arabia. Firstly, the new ND&P department dedicated to military projects is a specialised team expanding ASRY’s strong experience in the defence sector to become one of the yards primary differentiators from other regional yards. This new move is already on its way to achieving its goal of capturing approximately 60% of the regional Naval market, up from approximately 45% previously. Secondly, a new representative office in Al Khobar in Saudi Arabia has been building ASRY’s penetration of the Kingdom’s market, particularly on the offshore side. The Saudi Arabian contribution to total sales up to June 2014 was approximately 46%, which is a significant amount, and reflects the importance of the geographical area to ASRY’s business. Compared to the same period the previous year, which was approximately 18%, there has been a large rise. This is predominantly due to the offshore services division which is largely Saudi-based revenue.
Arran Dall
