Sembcorp Marine wins 8 ship refit order from Canadian shipper

The signing of the contract commits Sembawang Shipyard to a long-term alliance contract with Teekay Marines.

This contract signed in Vancouver, by Captain Graham Westgarth, President of Teekay Marine Services and Ms. Wong Lee Lin, Executive Director of Sembawang Shipyard, includes the repairs, refurbishment and upgrading of Teekay’s fleet of vessels docking in Singapore to Sembawang Shipyard. It also supports joint planning, information and experience sharing, thus leveraging complementary resources to achieve sustainable targets in the areas of HSSE (Health, Safety, Security and Environment), quality, cost-efficiency and timely deliveries. This partnership will lead to process-based improvements in refits and ship maintenance using best practices of both companies.

Captain Graham said, “this ship-repair alliance is between two companies which are keen on having continuous improvement in their organisations thus enhancing their competitiveness. The alliance will benefit both organisations as we will maximize our ships’ trading days through safe repairs, better planning, quality enhancement and maximization of resources utilization. Through such processes, we will be able to carry out our dry dockings and upgrades in a safe, efficient and cost-effective way. The selection of Sembawang Shipyard as our exclusive alliance partner in Singapore is in line with Teekay’s global refit strategy to work towards achieving such continuous improvement in repair processes and implementing best practices across Teekay’s entire fleet. Sembawang Shipyard is internationally recognised for its safety track record and as one of the most technically competent and efficient repair yards in the world. We have had many positive experiences with Sembawang Shipyard, which laid the foundation for us to enter into this long-term partnership arrangement with the Shipyard. More than these, the alliance is about trust and commitment between our two companies. We thus look forward to a long and successful partnership with Sembawang Shipyard.”

In another statement, Ms. Wong said, "Teekay is a world leader in global shipping and we are indeed pleased to be Teekay’s chosen partner. The Teekay-Sembawang Shipyard alliance is the result of a close collaborative relationship between two like-minded organisations with the intent of accomplishing mutually compatible goals. This innovative alliance enables synergistic value creation resulting from the co-sharing of knowledge, skills and experiences on the technical repairs, the operation of the ships and systems improvements. Sembawang Shipyard has a good track record in delivering alliance benefits to our partners. Our alliance structure and processes will bring about continuous improvements in the way Teekay ships are being repaired and upgraded. We look forward to a long-term partnership which will deliver visible mutual benefits to both companies, especially in the areas of HSSE, quality, planning and cost efficiency.”

In February 2011, Sembawang Shipyard repaired Teekay’s shuttle tanker, Navion Savonita, which is operated by Teekay Brazil. There are three other vessels scheduled for repairs in Sembawang Shipyard in the first half of 2011.

The above contract is not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of Sembcorp Marine for the year ending December 31, 2011.