Shipbuilder IHC eyes acquisitions in Asia

Dutch shipbuilder IHC Merwede hopes to announce the acquisition of a few Asian shipyards next quarter as it sticks to an aggressive plan to expand internationally and grow by 50 percent in five years, a senior company executive said on Monday.
The specialist shipbuilder, which generates more than 1 billion euros ($1.34 billion) in revenue, expects huge demand for its oil drilling and deep-sea mining ships as China, India, and Southeast Asian nations compete to secure commodities to fuel their economies.
IHC, the world's leading builder of dredging ships, is in the "advanced stages of negotiations" with a number of shipbuilding companies with operations in Asia, said Denis Welch, the chief executive of IHC's Southeast Asia operations.
He declined to name the companies or specify the potential value of the acquisitions, as talks were still ongoing. IHC currently does not have its own shipyard in Asia, operating instead through joint ventures. "The idea here is that we establish a footprint by having manufacturing capability over here to build ships," the Singapore-based executive said in an interview. "We have a few options that we are looking at the moment."
IHC's president told Reuters earlier this year that revenue should rise by 10 percent this year, and continue to grow significantly for at least five years. The firm's ambitious growth plans, however, were dampened by uncertainty in the global financial markets. Last month, major shareholders Rabobank and Dutch billionaire Cees de Bruin shelved plans to sell nearly half the company to outside investors to fund take-overs.
IHC must now rely on its underwriting capacity of 1.5 billion euros ($2 billion), of which 900 million is already committed. IHC has prospered building one-off ships to dredging companies such as Koninklijke Boskalis Westminister NV . It expects future growth to be in its offshore oil drilling and deep-sea mining business. "I can only see continuing unrelenting demand to find more oil because the market fundamentals are there. The demand for energy is insatiable," Welch said, adding that offshore exploration would remain economically viable as long as Brent crude oil stayed above $70 a barrel. Brent crude traded at $110.86 a barrel on Monday, up 92 cents.