OBG talks to Chris Potter, Chief Executive, Arab Shipbuilding & Repair Yard (ASRY)

Interview: Chris Potter

What sorts of opportunities are there to diversify the ship repair industry in Bahrain?

CHRIS POTTER: Bahrain has always had a geographically strategic position, especially in terms of shipping. With convenient access to some of the world’s most prominent shipping lines, finding maritime diversification options is not a challenge, but it is becoming competitive. There are opportunities in offshore repairs, which have already started to be tapped and have proven to be a lucrative new market for Bahrain largely due to the relatively high levels of activity and players in the region. The naval repair sector is also another area for growth because the US Navy’s Fifth Fleet is headquartered here, as well cooperation agreements with the leading UK firm A&P Group for the repair of Royal Fleet Auxiliary vessels operating in the Arabian Gulf. Beyond that, there are potential markets in the less established new-build sector, which are currently already being explored.

How will the growing regional competition from new shipyards affect Bahrain’s shipbuilding industry?

POTTER: Competition in the shipyard business is a positive factor for Bahrain for two reasons. First, it demands innovation, which in turn attracts more business. If there are more options in terms of technologies and proficiencies in the region, international ship and rig owners will have more reason to include Bahrain in their repair schedules. Which yards those owners choose will depend on which yard has the most experience.

Second, increased competition will highlight Bahrain’s heritage of vessel repair expertise. No other country in the region can claim over 35 years of global standard ship repair, just as no other shipyard in the region can claim to be the first ISO certified yard, or to have serviced over 3,750 vessels. That depth of knowledge becomes acutely highlighted in comparison to the relatively young yards that have emerged. More experienced yards have workforce skill levels, fair pricing structures and quality control systems that are very hard to replicate without a long-standing track record.

Aside from ship repairs, what are other ways to develop Bahrain’s marine industry?

POTTER: A significant share of the global marine business is concentrated in the Middle East, so expansion is always an option assuming the market conditions are favourable. The commercial shipping market relies heavily on trade between the Middle East and the Far East, especially for bulk chemicals and the like. Improving the container network in the region would support growth as the majority of trade is in tankers and dry bulk. The future of the transport sector and related industries will depend on how world trade and the global economy recovers. As the oil market and construction sectors pick up, more oil tankers and dry bulk vessels will come in. The major mover in world trade is the shipping industry and the signs of recovery are present.

Locally, Bahrain’s marine industry is currently undergoing a transformation, with the goal of becoming a maritime hub in the region. The General Organisation of Sea Ports (GOP) has created a document known as the Strategic Plan 2011-16, which sets out six objectives as a roadmap of the country’s marine aspirations. A state-of-the-art marine repair and fabrication complex is only one part of the plan to reposition the country to the forefront of the global maritime industry.

There are several pillars on which the Kingdom’s marine industry must depend if it is to capitalise on further openings. The first of these, a modern port, is embodied in the new Khalifa bin Salman Port, while the second, an accessible and well-organised free zone, is fulfilled by the Bahrain Logistics Zone. There must also be an updated legal framework in which the marine industry can flourish, and to this end the new Bahrain Maritime Code is currently under legislative review. Once completed, these developments will keep the Kingdom on track to become a premier trans-shipment hub for the Northern Gulf markets. These initiatives serve to boost the maritime profile of the Kingdom and develop it in a cohesive way, so that global marine players will begin to recognise Bahrain’s unique offering.