shipyards operation review - sembcorp marine · seiso, seiketsu and shitsuke (sorting, arranging,...

SHIPYARDSOPERATION REVIEW

Looking ahead, we will adopt a two-prongedapproach in sustaining growth for the SembCorpMarine Group. Firstly, we will continue to strengthenour home-based shipyards to provide complementaryfacilities and capabilities within the Group. Andsecondly, we will strengthen our global presencethrough a network of strategically located shipyards.

Mr Wong Kok Siew/Tan Kwi Kin,Chairman/President & CEO, SembCorp Marine LtdChairman’s & President’s Letter to Shareholders, 2003 Annual Report

PPL Shipyard (Singapore)

Mauá Jurong Shipyard (Brazil)

Cosco (Dalian) Shipyard (China)

Jurong Shipyard (Singapore)

Sembawang Shipyard (Singapore)

Jurong SML Shipyard (Singapore)

Karimun Sembawang Shipyard (Indonesia)

SembCorp Marine 200396 SembCorp Marine 2003 97

Jurong Shipyard had a busy year in 2003, having achieved a dock utilisation rate of 85 per cent.

Notable Projects 2003

Vessel Type Customer

Kome-Kribi 1 Conversion to FSO Modec International LLC

Stena Spirit & Nordic Spirit Shuttle tanker conversion Ugland Nordic Shipping AS

Fluminense FPSO conversion Modec International LLC

P-43 FPSO conversion Kellogg Brown & Root Hallliburton

Thomas Mann 2,500 TEU container newbuilt Reederei Karl Schluter

Capella Voyager Tanker Repair ChevronTexaco Shipping

Orpheus Asia Tanker Repair Idemitsu Tanker Co.

ISO 9001:2000 and OHSAS RecertificationFor its commitment to occupational safety and health,Jurong Shipyard was accredited with OHSAS 18001:1999surveillance audit in April 2003 by ABS QualityEvaluation, Inc, an independent third party registrar.OHSAS was an occupational health and safetyassessment series, which complied with the Singaporelegislation and international standards related to theOil Companies International Marine Forum.

SafetyWith its continual emphasis on safety, the shipyard sawa lower accident frequency rate of 2.7 in 2003 ascompared to 2.99 in 2002. To encourage greater safetyawareness among employees and subcontractors,several activities were held during the year includingbi-monthly poster displays, monthly safety quiz contestsand Safety Poster Competition. A multi-lingual in-houseDVD was developed to educate employees on currentsafety legislation, yard rules and regulations and safetyprecautions.

Ministry of Manpower Safety Registered Courses

Other Safety Courses

Jurong Shipyard

Course No. Trained

Safety Instruction Course 6for Repair Managers

Safety Instruction Course for 141Direct Employees (SIC)

Safety Officers Training Course 1

Shipyard Supervisor 30Safety Course (SSSC)

Shipyard Safety Assessors Course 3(Hot Work Certification)

Total 181

Course No. Trained

Behavioural Based Safety (BBS) 70

In-house Fire Watchman/ 5Fire-fighting Course

Marine Signalmen/Rigger Course 18

Safety Orientation Course (SOC) 433for New Contractor Workers

Safety Induction Programme Briefing 180

Lifting Supervisor Course 10

Safety Legislation Workshop 3

Fire & Rescue Training 5

First Aid Course 62

OSHAS 18001 Internal Auditor Course 54

Risk Assessment Course 67

Total 907

The Safety and Fire Section also conducted a total of28 fire and evacuation drills in 2003 to fine tune its fire-fighting and evacuation system. The drills alsofamiliarised all our direct employees and subcontractors– including ship crew, security guards and utilitiespersonnel - with emergency preparedness on boardvessels.

Various courses, workshops and seminars were alsoconducted to equip employees with knowledge ofproper procedures and best practices. These includedMinistry of Manpower Safety Registered Courses andother in-house training courses.

To ensure that high standards of quality prevailed in allaspects of its operations, the shipyard further underwentthe ISO 9001:2000 surveillance audit by ABS QualityEvaluation Inc. in September 2003. It also achieved re-certification of Singapore Quality Class accorded bySPRING (Singapore Productivity and Innovation Board)Singapore.

Security: Achieving International Ship and PortFacility Code ComplianceJurong Shipyard was certified by MPA in accordanceto IMO’s International Ship and Port Facility Code. Theshipyard was presented a Provisional Statement ofCompliance of a Port Facility for meeting IMO’sInternational Code for the Security of Ships and PortFacilities at its facility in Jurong Shipyard on March 12,2004. The approval of the shipyard’s facility securityprocedures and plans was well ahead of Singapore’searlier deadline of April 1, 2004 and the official IMO’sJuly 1, 2004 deadline. This achievement of an earlyISPS certification demonstrated the shipyard’s securitypreparedness and pro-activity. Security constituted animportant aspect of our business deliverables in viewof the shipyard’s business clientele such as the oil majorsand the major international shipping community.

Frequency Rates(Per million man-hours)

6.00

5.00

4.00

3.00

2.00

1.00

0

Source: Ministry of Manpower

6.00

5.00

4.00

3.00

2.00

1.00

0

97 98 99 00 01 02 03

5.19

3.88

3.15

2.17

2.902.70

2.99


Sembawang Shipyard had an eventful year in 2003,having achieved a dock utilisation rate of 50 per cent.

ISO 14001 RecertificationAs an endorsement of Sembawang Shipyard’s soundQuality, Safety and Environment management systems,several recertifications were accorded to the yard duringthe year. In March 2003, the shipyard receivedrecertification on ISO 14001 Environmental ManagementSystems and maintained its Advanced Level 8 standardsin the International Safety Rating System andInternational Quality Rating System for businessexcellence, accredited by Det Norske Veritas Ltd.

Notable Projects 2003

Vessel Type Customer

Prince William Sound Tanker Repair Alaska Tanker Company

Iron Monarch Cargo Repair BHP Biliton

Jo Mrevik Chemical Tanker Repair Jo Tankers AS

Murex Tanker Shell International Trading and Shipping

Superstar Capricorn Passenger vessel repair Star Cruises

W.D. Fairway Ship conversion Boskalis Westminster

Saipem 3000 Crane barge conversion Saipem SPA

Sembawang Shipyard

EnvironmentFor better workplace management, Jurong Shipyardcontinued to adopt the 5S Housekeeping approach, aJapanese system based on the acronyms Seiri, SeitonSeiso, Seiketsu and Shitsuke (sorting, arranging, cleaning,maintaining and self-discipline). As an incentive foremployees and subcontractors to maintain goodhousekeeping standards, the 5S Housekeeping Awardswere presented to deserving sections and stores yearly.In 2003, the workshop, store and best sub-contractorstores with the best housekeeping record wererecognised. The Best Canteen Stall Awards were alsopresented to stalls that achieved high standards ofhygiene and nutritional value in the food served.


6.00

5.00

4.00

3.00

2.00

1.00

0


Facilities UpgradingTo meet increasing project demands, the shipyardincrease its cranage capacity during the year with theaddition of two new cranes – a 40-ton crane and a10-ton crane at West Quay and South Quay respectively.With the new additions, Jurong Shipyard would have atotal of 25 level-luffing cranes with a lifting capacity ofup to 150 tons servicing its 2,728-metre berthing quaysand four graving docks of total capacity 1,100,000 dwt.The 40-ton crane would have a maximum outreach of80m at 15 tons and 50m at 40 tons, with the ability todirectly transport materials from vessels at the WestQuay to the workshop without the additional use oftransport. It would also be capable of lifting a 40-tonload from ships including double banking vessels dockingat South Quay West. The 10-ton crane, which wouldhave a maximum outreach of 45-tons at 10 tons and100m at 5 tons, would serve vessels at South Quay Eastand South Quay.

97 98 99 00 01 02 03

4.70

4.30

3.10

4.104.30

2.902.99


SafetySembawang Shipyard reported an accident frequencyrate of 2.9 in 2003, which was lower than the industryaverage of 3.4 for the year. Adopting a total approachto safety management, the shipyard launched thebehaviour-based safety comic book and video in October2003 to reach out and to educate its employees andsubcontractors. The shipyard also implemented the“SSPL Accident Classification Format” and formulatedSafe Work procedures pertaining to “Entry into FixedElectrical Installation” and the “Lockout Tagout” systeminto the Permit-To-Work System and EmergencyProcedures with regards to Dock and PontoonEvacuation, Environmental Emergency and HazardousSubstance Fire-fighting. To ensure emergencypreparedness in the shipyard, a total of 54 fire and rescueemergency exercises were conducted during the year.The shipyard was also awarded the Certificate ofParticipation in the Mass Evacuation Drill organised bythe Singapore Defence Force in November 2003.

EnvironmentEnsuring more effective waste management is a constantchallenge for the shipyard especially with increasingwaste tonnage from bigger projects. Rising to thischallenge, the shipyard’s Housekeeping Committeecontinued with its mission of keeping waste disposalcosts low with centralised bays for general waste, emptyoil drums and used anodes as well as anti-crow bins topromote housekeeping. The yard also adopted a moresystematic approach including disseminating bulletinsto educate employees on proper disposal andhousekeeping practices, conducting regular zoneinspections around the yard and onboard vessels andimplementing a “fine chit” system to subcontractorswith poor housekeeping performances.

Jurong SML Shipyard’s two yards experienced abusy year in 2003. Dock utilisation rates were 76 percent at Jurong SML Shipyard and 77 per cent atSML Shipyard. Combined steel throughput for bothyards per year stood at 1,524 tons, mainly forsteel erection and fabrication for repairs andnewbuilt projects.

Major projects undertaken during the yearcomprised four units of fast boat - KP Kolibri, KPEnggang, KP Balam and KP Murai - which were deliveredto the owner two months ahead of schedule. Threeunits of the fast boat were delivered in 2003 with thelast unit due in the first quarter of 2004.

Both yards received thei r ISO 9001-2000recertification by Det Norske Veritas in 2003. Accidentfrequency rates were recorded at 2.7 at Jurong SMLShipyard and 14 at SML Shipyard in 2003, compared to5.0 and 7.7 respectively in 2002. As a people-orientedorganisation, the company continued to promote safetytraining and healthy lifestyles. Jurong SML Shipyardwas awarded the Singapore Health Award (Silver)from the Health Promotion Board in recognition of itseffort in promoting and improving the lifestyle ofits employees.

ISPS Code CertificationJurong SML was the first medium-sized shipyard to beawarded the Provisional Statement of Compliance of aPort Facility (ISPS Code) on February 26, 2004 by theMaritime and Port Authority of Singapore. SML Shipyard,located in Shipyard Road was also awarded theProvisional Statement of Compliance under the ISPSCode on February 26, 2004.

PPL Shipyard, an 85 per cent owned shipyard,continued to focus on repairs of mobile rigs andrig construction. In 2003, it delivered one unit ofJack-up rig to GlobalSantaFe International. The secondunit of jack-up is due for delivery in the first quarterof 2004.

In January 2004, the shipyard secured a US$110 millionEPC construction project to construct one unit of BakerMarine Pacific Class 375 Deep Drilling Offshore Jack-up for Kristiansand Drilling. Construction of the jack-upis based on PPL Shipyard’s proprietary design – theBaker Marine Pacific Class 375. The contract includedan option for an additional jack-up, if exercised within18 months from date of signing.

Jurong SML Shipyard PPL Shipyard

Security: Achieving International Ship and PortFacility Code ComplianceSembawang Shipyard was the first major shipyard inSingapore to achieve IMO’s International Ship and PortFacility Code Compliance. The shipyard was presenteda Provisional Statement of Compliance of a Port Facilityfor meeting IMO’s International Code for the Securityof Ships and Port Facilities at its facility in Sembawang.The approval of the shipyard’s facility security proceduresand plans was well ahead of Singapore’s earlier deadlineof April 1, 2004 and the official IMO’s July 1, 2004deadline. This achievement of an early ISPS certificationdemonstrated the shipyard’s security preparedness andpro-activity. Security constituted an important aspectof the business deliverables. In view of the shipyard’sbusiness clientele such as the oil majors and majorinternational shipping companies.


Restructuring of Karimun Sembawang Shipyard’soperations continued into 2003 following SembCorpMarine’s acquisition of the remaining 35 per cent interestin the shipyard in 2002. Following the restructuring, thefloating dock located in Karimun was moved toSembawang Shipyard in February 2003.

The shipyard operated primarily from its 20-hectare siteon Karimun Island in Indonesia, approximately 40kilometres southwest of Singapore. Its business was re-focused on new fabrication (steel and pipe work), tankcleaning and other layout and afloat repair.

In 2003, a total of 13 vessels undergone afloat repairsand 6,100 ton sludge cleaned. Two units of crane barges,each about 780 ton were under construction in theshipyard. The yard was also building the forward bodyof the 2,500 TEU container ship and two units of 2,600TEU containership steel sub-block fabrication of about1,800 ton each for delivery by the fourth quarter of 2004.It also engaged in the construction of four sets of 2,600TEU container ship hatch cover, each 800 ton to bedelivered by third quarter of 2004.

Cosco (Dalian) Shipyard enjoyed a fruitful year in 2003,repairing a total of 175 vessels in the shipyard and 16vessels at anchorage at an estimated value ofRMB3,500,000 per vessel. Foreign vessels accountedfor 90 per cent of the vessels repaired. Productionoutput comprised 1,600,000 m2 of grit blasting, including120,000m2 of tank coating and 25,000 tons of steelrenewal.

Significant projects undertaken by the shipyard duringthe year included the construction of a 125 metre longand 15,500-ton barge in March 2003. Its crane-steel-legand pontoon-fabrication projects were completed inNovember 2003. The shipyard was further awarded twoship repair projects by Sinopec and CNOOC duringthe year.

The shipyard’s capabilities were further enhanced withthe completion of a new 100,000 dwt pier, which wouldincrease its production output significantly. The pierwas built in only five months and was officially openedon August 1, 2003. Preliminary work also began for theconstruction of another 300,000 dwt dock to betterserve the offshore and VLCC market.

Mauá Jurong in Brazil had a busy year in 2003. Itsrevenue in 2003 was US$146 million, 98 per cent higherthan the US$74 million achieved in 2002. Manpower asat December 31, 2003 stood at 1,671.

Contributions from ship repair were higher as theshipyard took on several major offshore repairs for drill-ships, jack-ups and conversion of research ships forPetrobras, Transocean, Pan Marine, AP Moller and BJServices. During the year, the shipyard delivered theP-48 production modules to owner. P-43, which hadundergone marine conversion at Jurong Shipyard inSingapore, arrived at Mauá Jurong in October 28, 2003for integration and commissioning which were scheduledfor completion due in the third quarter of 2004.

Jurong Marine Contractors

Jurong Marine Contractors maintained a pool of residentskilled subcontractors to complement SembCorpMarine’s shipyards’ direct workforce. Playing an importantrole in the marine industry, these subcontractors providedspecialised services not normally performed by shipyardsand supplemented the skilled manpower of theshipyard’s direct workforce.

In 2003, the number of registered subcontractorsincreased to 71 groups in tandem with the increase inshipyard workload. Total workforce stood at an averageof about 4,000. The company continued to coordinatethe training and upgrading of skills, work quality, safetyand supervisory standards of these subcontractors.Such efforts were vital in sustaining and improving theoverall productivity of the shipyards.

For 2003, the safety performance of the subcontractorsat 2.78 per million man-hours was higher than the 2.62frequency rate recorded in 2002. This increase wasattributed to the higher number of relatively new foreignworkers, who suffered mainly hand and finger injuries.Addressing this problem, the company together withJurong Shipyard’s Safety Department, devised newmeasures for 2004 to reduce the finger-and hand-relatedincidences.

Manpower training and development

In anticipation of higher demand for 4G and 6G weldersfor offshore projects, Jurong Marine Contractorsimplemented the “skill-mix” formula for all steelworkand pipefitting subcontractors. Under this formula, 50

per cent of the steelwork contractors’ workforce wouldbe trained for 4G skill, while 30 per cent of the pipefittingsubcontractors would be trained at 6G level skill. Theskill-mix formula resulted in 87 steelwork contractorsachieving the 6G level and 142 pipefitting contractorsachieved the 4G level in 2003.

Partners in Innovation

As partner to Jurong Shipyard, the contractor groupsunder Jurong Marine Contractors also participated inthe Safety Innovation Team and IDEA awardcompetitions. The team won two IDEA awards andreceived cash prices of $1,000 each. Ten contractorgroups were shortlisted to test bed the new radio-frequency identification system, which could monitorthe workers’ punctuality and attendance. Each of theten contractors was given a palm and a radio frequencyidentification reader and would be trained on usage bythe shipyard.

EDB SME LIUP Affiliate Programme

To boost standards of marine excellence, JurongShipyard worked with the Economic Development Boardto strengthen the capabilities of its resident contractorsunder the newly initiated Marine Group Local IndustriesUpgrading Programme and Small and Medium Enterprise

Karimun Sembawang Shipyard

Cosco (Dalian) Shipyard

Mauá Jurong Supporting Services


6.00

5.00

4.00

3.00

2.00

1.00

0


97 98 99 00 01 02 03

4.28

2.99

2.582.34 2.21

2.782.62

SembCorp Marine 2003104

Affiliate Programme. The programme was a new initiativein which big and small players in the marine sectorwould work together towards greater excellence for theindustry. It aimed to develop promising marine-small and medium-sized enterprises in the areas ofentrepreneurship promotion, innovation, managementand human capital development. Jurong Shipyardselected five of its affiliates for participation in theprogramme.

Jurong Machinery & Automation

Jurong Machinery & Automation continued to engagein the manufacture and repair of ship parts and engine.Total revenue in 2003 was $23 million drawn mainly fromHVAC project and electrical and instrumentation workson newship and ship repair projects. During the year,the company also upgraded its equipment with thepurchase of three sets of HVAC Leakage Test Equipment,the E & I Loop checkers, cable laying stands and newhydraulic cable cutting and clamping tools.

In 2003, the company received a safety award of $4,200for achieving the lowest frequency rate of 1.9 per millionman-hours. The company trained 30 electrical fitterswith 3G welding pass, upgraded six 3G welders to 4Gand 20 general fitters to be electrical terminators.

Jurong Clavon

Jurong Clavon’ s main activities included the provisionof a wide range of blasting and painting services forshipyards. Its turnover for 2003 was $26 million. To meetthe stringent requirements of customers, Jurong Clavonimplemented the quality management system thatwould cover the entire blasting and coating process,starting from inspection of the purchased materials toprocess control and inspection. Employees were sentfor training on a regular basis to update themselves onthe blasting and painting technology.

Moving forward, the company planned to expand intothe design and fabrication of blasting and coatingequipment and system business by becoming a specialistin turnkey projects for complete system design andequipment and hardware supply and fabrication to thesurface preparation, coating application and corrosioncontrol services industries.

JPL Industries

JPL Industries was set up as the environmental arm ofSembCorp Marine. In 2003, a breakthrough was achievedwhen the recycled copper slag was approved by theauthority for use in structural works. Recycled copperslag could now be used as partial replacement of sandin concrete for the Changi water reclamation project.Due to market acceptance, sales of the processed recycledslag increased by 21 per cent in 2003.

To promote further market awareness, JPL Industriesparticipated in ENVIRO ASIA 2003 organised by the WasteManagement and Recycling Association of Singapore andco-organised by the National Environmental Agency. JPLIndustries’ representative was elected as a committeemember in Waste Management and Recycling Associationfrom 2003 to 2004.

Bulk Trade

Bulk Trade had a profitable year in 2003 with a turnoverof $53.6 million. This was contributed by the buoyantmarine sector from shipyards in Singapore as well asshipyards in Middle East, Malaysia and Indonesia. Mainitems supplied included ship plates, steel pipes, pipefittings, diesel oil, welding electrodes and safety shores.Bulk Trade expected further growth in sales in 2004 withthe continued buoyant marine sector.

Bulk Trade - being the sole agent of Douglas Equipmentof United Kingdom for the Douglas Tugmaster rangeof aircraft towing tractors – would continue to promoteDouglas’ new TBL-600 Aircraft Towbarless Tractor to SIAEngineering Company for the new A380 Airbus aircraft.The company had supplied four units of TBL-400Towbarless Tractors for the B747 range of aircraft in 2001and 2002. Trading activities with Myanmar commencedonly in 2003 with volumes expected to increase in 2004.

shipyards operation review - sembcorp marine · seiso, seiketsu and shitsuke (sorting, arranging,...

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