CSBC Corp optimistic about its repair business with contract for two vessels

Posted on 29 January 2019
 

Source: Taipei Times

CSBC Corp, Taiwan (台灣國際造船) yesterday said it was optimistic about its repair business for this year after the shipbuilder secured NT$380 million (US$12.34) in government contracts to repair a military ship and a research vessel.

CSBC has signed an open contract to repair the Republic of China Navy’s Panshi, a fast combat support ship, with the deal covering all maintenance work for five years, CSBC president Tseng Kuo-cheng (曾國正) told the Taipei Times by telephone.

An open contract is an agreement in which terms and clauses can be changed or modified without mutual consent among the signatories.

“Usually there is no settled price in an open contract, but the Ministry of National Defense has made it clear that the repair budget for the Panshi would stand at NT$280 million,” Tseng said.

CSBC, which began work on the 20,000-tonne vessel in 2012, delivered the ship in 2015.

The company rarely signs open contracts, but won this one after the ministry said it was better that the ship’s builder do the repairs, Tseng said.

It was unclear what maintenance the ship needs this year, but CSBC expects to book steady revenue over the next five years, he said, adding that work would be done at its Kaohsiung facilities.

CSBC, the nation’s only listed shipbuilder, this month also signed a contract with the Council of Agriculture’s Fisheries Research Institute to repair the agency’s first fisheries research vessel, Tseng said.

“We did not see many rivals for the tender, as it is not easy to repair a 25-year-old vessel,” he said.

CSBC would need to complete the work at its Keelung facilities by the end of this year, he said.

“Overall, we have had a good beginning to the year and hope to win more repair contracts,” Tseng said.

Although maintenance only contributes 3 percent to 5 percent to CSBC’s overall revenue, the gross margin from such work is quite good, he said.

Meanwhile, CSBC said Orsted A/S had not notified it to suspend a contract to develop pin piles for offshore wind projects.

The Danish firm this month announced it was suspending its offshore wind projects in Taiwan after failing to receive an establishment permit for projects off the Changhua County coast and was unable to secure a power purchase agreement at last year’s feed-in tariff rate.

Separately, CSBC said that it would raise NT$2.25 billion in fresh funds to fuel development.

The company plans to issue 100 million new shares, with most of them to be purchased by a state-run institution, which it declined to specify.

The company’s state-owned stakeholders include the Ministry of Economic Affairs and China Steel Corp (中鋼).

They hold a combined 41.5 percent stake in CSBC, which would still be the largest stake after CSBC’s scheme is completed, the company said. 



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