Singapore's SembCorp has formed a stategic joint venture agreement with Saudi Arabia's Nasser Mohammed Al-Mukairish & Partners to establish SembMarine Middle East (SMME).
SMME will in turn become a founding shareholder in the Floating Dock for Shipbuilding and Ship Repair Company (FDSCO), which will build, own and operate the FDSCO Shipyard in Saudi Arabia over a 30-year term.
Sembcorp will invest $6.6 million in cash for a 60% stake in SMME, while Al Mukairish will subscribe for 40% through an investment of $4.4 million.
SMME will keep $1 million as working capital and will invest $10 million into FDSCO for a 2.5% equity stake.
The 21 hectare FDSCO Shipyard will be constructed on Al Jazeera Island, which is a part of the Yanbu commercial port, facing the Red Sea.
The yard will offer a wide range of shipbuilding, ship repairing, marine engineering facilities and services to the regional heavy industry.
The FDSCO Shipyard is expected to be fully operational by 2009.
"Through SMME, SCM will invest in and provide technical and management services to FDSCO," SembCorp senior vice president of corporate development Ng Thiam Poh said.
"SMME will also provide opportunities for SembCorp to grow its marine, oil and gas business in the Middle East."
© Upstream 2007
