Abu Dhabi Ship Building teams up with BVT

The new company, to be named Gulf Logistics and Naval Support will target estimated US$200 million regional market for ship maintenance.

Abu Dhabi Ship Building (ADSB) has linked up with a UK naval group to create a company called Gulf Logistics and Naval Support, which will tap into the region's estimated US$200 million (Dh736m) maritime maintenance industry by providing support to Gulf navies. The joint venture between ADSB and BVT Surface Fleet, a builder of warships for the UK navy, has been formed to target maintenance and support services. Homaid al Shemmari, the chairman of ADSB, said the venture "enables us to focus on supporting our customers over the long-term life of their vessels by providing services from maintaining their vessels to managing their bases and training their staff." ADSB has taken a 70 per cent stake in the new company, which will set up at its naval shipbuilding business in Abu Dhabi. At its shipbuilding and repair yard in the Musaffah industrial zone, ADSB is in the midst of completing its largest contract to date - a Dh3.67 billion order for six "Baynunah" corvettes for the UAE Navy, each 72 metres long and armed against land, air and seaborne threats. BVT, which is itself a joint venture between the British shipbuilders BAE Systems and VT Group, will own the remaining 30 per cent stake, and yesterday's agreement caps a month during which BVT also signed a 15-year contract with the UK ministry of defence. The deal involves provisions to build warships and provide after-market services and support to the UK's Royal Navy. This has improved the company's long-term prospects, after reports surfaced that it was under pressure to close some of its UK shipyards when it completes a large aircraft carrier order in 2014. Potential customers for Gulf Logistics will include navies, coast guards, marine police, homeland security agencies and special forces in the GCC, its two shareholders said yesterday. In the UAE, there are more than 200 vessels owned by state organisations, including the newly established Critical National Infrastructure Authority (CNIA), which was set up to guard the country's strategic assets such as islands and offshore oil and gas installations. The agency recently acquired vessels from the UAE coastguard, and also ordered 34 fast interceptor vessels from ADSB in February, worth Dh460m. Gulf Logistics's customers could also include foreign naval forces, among them the French, US and British navies, which have established bases in several GCC states. As part of the agreement, BVT said it would shift facilities it owns in Egypt and Jordan, as well as its customer base there, over to the new venture. ADSB is traded on the Abu Dhabi Securities Exchange and 40 per cent owned by Mubadala Development, an investment arm of the Government. The shift into services is a familiar theme for Mubadala's affiliate companies. The investment agency has partnered with Sikorsky Aerospace Services of the US to set up a local military aircraft services firm. Al Taif Technical Services, another Mubadala affiliate, has already begun a long-term contract with the UAE Armed Forces to service their fleet of land vehicles. Mr al Shemmari said: "GCC governments have increasingly been moving towards outsourcing services to make savings and increase efficiency, and Gulf Logistics and Naval Support is ideally placed to help them achieve their objectives." [e-mail]