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Nam Cheong to build shipyard, training centre in Labuan
MALAYSIAN offshore support vessel builder Nam Cheong plans to redevelop the facilities on a 7.3-hectare site in Labuan, Malaysia, for a shipyard and training centre.
The mainboard-listed company on Monday said its wholly-owned subsidiary, Nam Cheong Dockyard (NCD), has signed a memorandum of understanding with Labuan Corporation, an agency under the Ministry of Federal Territories, to lease the land.
NCD will turn the existing Labuan Halal Hub Complex in Kiansam into an integrated marine engineering and construction facility, meant to support the growth of oil and gas industries in Labuan, Sabah, Sarawak and Brunei.
NCD will invest some RM60 million (S$19.7 million) in the redevelopment, and also move its fabrication and shipbuilding-related activities in Indonesia and China to Labuan starting from January 2020, according to Malaysian media reports.
The new complex will include a warehouse for supply base, yard utilities, waterfront bulk head facilities for ship repairing, ship berthing and fabrication workshops, as well as a training centre for workers.
A definitive agreement is expected to be inked by the end of 2019, and operations will begin in 2021.
Upon completion, the operations on the land will contribute positively to Nam Cheong’s financial performance from the fiscal year 2021 onwards, the group said.
Nam Cheong’s own fleet is also allowed to use the ship repairing, ship berthing and supply base services on the land.
The group added that this latest move sets a foundation for it to expand its revenue streams into ship repair, offshore engineering procurement and construction, supply base and logistics for offshore marine support, on top of its existing shipbuilding and chartering businesses.
Shares of Nam Cheong rose 0.1 Singapore cent or 14 per cent to trade at 0.8 cent as at 9.01am on Monday, after the announcement was made.