The merger of Singapore's two biggest shiprepair groups--Keppel Hitachi Zosen (KHZ) and SembCorp Marine--may come sooner than most people think. Only informal talks have taken place so far but, according to a Singapore Business Times report, both sides see the wisdom of rationalising their operations to combat stiff competition from yards in the Middle East and China.
"How and when this will work out I am unable to tell you at this point in time, "Choo Chiau Beng, chairman of Keppel Fels Energy and Infrastructure and chairman-designate of KHZ, was quoted as saying. "But we do hope the merger will take place sooner rather than later. This is because we think there are advantages in taking that route to set up an enlarged marine group to meet rising competition from countries like China and the Middle East."
KHZ managing director Charles Foo said that because of over-building of dry docks and floating docks during the past five years, there was now over-capacity in the industry, despite the closure of several docks by Keppel when it moved out of its harbour site. Foo also feels there is wasteful competition between the two.