Interclean's entry could help ease financial woes

Dionisia Tabureguci
All hope is not lost at the Fiji government shipyard. With the official entry last month of Interclean Industrial Services, a New Zealand owned company which specialises in providing a range of industrial services, the Fiji Ships and Heavy Industries Limited (FSHIL) may just be in for some breathing space. And there is every chance this partnership could help edge it out of the doldrums it had been in when it was privatised in 1996 by the then Rabuka government.

The commission-based arrangement between Interclean (Fiji) Limited (IFL)-the locally domiciled operation of its New Zealand parent company Interclean-and FSHIL will see the latter subcontracting some operations of its ship repair and maintenance arm to IFL.

This partnership is the first tangible relationship that a ruling regime has managed to secure for the state's seemingly ill-fated shipbuilding, repair and maintenance business, which is operated by FSHIL, an entity that has been running as a government commercial company since 2003.

Unlike the partnership struck with MCI-Carpenters in 1996, when the government at the time decided to immediately privatise the shipyard business, the FSHIL-IFL alignment is more cautious, with both sides willing to first work out a symbiotic arrangement to see how well it would go.

“We have not entered into any partnership yet,” says Anil Singh, Interclean's group financial controller.

“The future prospect is there. But we want to work this way and see how things go. We want to go into this on a contract basis to see if we can work with Fiji Ships.”

Big changes: Singh and Interclean's chief executive officer Alan Hill have been in the country in the past few months to set up the Fiji operation and help train FSHIL workers absorbed by Interclean.

Space has been allocated to IFL at the Walu Bay FSHIL's slipway facility, just outside Suva, where it would be taking on the core functions of the slipways using a fleet of new and state-of-the-art equipment already brought in.

“I'd say our work here would be focused on industries and marine surface preparation,” says Hill. “We wish to add value to Fiji Ships by doing additional work. Instead of just doing the underwater hull, we have brought in a vacuum unit to enable us to do internal work in a vessel. We can do additional tankage and deck work, for example,” Hill adds.

Interclean's arrival should see big changes not only in FSHIL's financial state of affairs but also in the day-to-day operations at the slipway. This would fit perfectly with the new corporate direction FSHIL is taking, part of which would involve the leasing of the shipyard premises and the consolidation of all operations at the slipway in a planned $1.02 million workshop-cum office complex.

While FSHIL's ability to optimise potential in ship repair and maintenance business has always been limited by the lack of investment in infrastructure, IFL's entry should see at the very least, the improvement of efficiency at the existing slipways.

IFL is not here to sit around and wait for work to come. To show it means business, it has already spent some 80 percent of the $2.5 million it had allocated for investment in this job. It is also enthusiastic about taking on the challenge of clearing out the two-year old backlog of ships to be slipped.

“Weather dependent, it usually takes Fiji Ships seven days to put a ship back to sea on a 500-tonne slipway,” says Hill.

“One of the Blue Lagoon boats came up on the 500-tonne slipway about two weeks ago. When the boat came up, it was cleaned and blasted and put back to sea in three days. Chris, an engineer with Blue Lagoon, said he has never seen anything like it in the nine years he's been working for the company,” says Singh, to demonstrate the IFL's efficiency.

This efficiency has been made possible by using new technologies, which Singh believes is something lacking in Fiji.

IFL's machinery includes trucks fitted with vacuum loading facilities for the removal of both dry and wet sludge products and a machine called Genie Boom, used for faster access to the cleaning of the ships.

State-of-the-art: “We use Genie Booms, instead of scaffolding, to go up and down the side of the ships,” Hill explains.

“We don't work with scaffolding, which is the traditional access method here. It usually takes three days to put up the scaffolding around a boat. But with the Genie Boom, we start working as soon as we put up the boat on the slip or as soon as the head comes up the slip. You can keep on pulling and you can keep on working.”

It cuts down access time considerably, the work done on ships is further enhanced by the use of high pressure water jetting, which is one of the company's specialities.

“We propose to use water to blast the vessels instead of the current method, which is hand grinding,” says Hill. “Taking paint off manually day in and day out takes a longer time.

“We use water at between 6000 and 1000 PSI (pressure measurement) to do that in one operation. Also, instead of fan blasting or abrasive blasting, we use 40,000 PSI of water, which removes all paint back to bare steel and removes the corrosion in the ship to enable you to paint a good clean surface.

“Water also cleans salt and contaminants out of the steel.”

With improvements in efficiency, another challenge remains which FSHIL management and Hill believe would, if overcome, properly bring out the potential locked in this low performing state asset.

FSHIL chief executive officer Dale Alderdyce had highlighted the need for a larger slipway to cater for vessels with registered tonnage of over 1000 tonnes, the absence of which has meant that FSHIL is losing out on potential business.

FSHIL board chairman Viliame Gonelevu had noted, in the company's 2004 annual report, that the construction of a 4000-tonne slipway with a side jetty was under discussion and there were encouraging signs the project would eventuate.

“The company was also looking at bringing in a second hand 4000-tonne floating dock to aid the 1000-tonne slipway, which was constantly breaking down.”

Says Hill: “We are currently doing a lot of work in New Zealand for a Fiji shipping company that cannot do its work in Fiji because there is no capacity here for the larger vessels.

“They have to be taken and slipped outside the country now. We have been told there will be a bigger slipway here by 2007. If that eventuates, our technology would really be extremely efficient in terms of turning those bigger vessels around.”

As those in the shipping industry are fond of pointing out: with around 1000 vessels in and around Fiji waters which need to be surveyed, slipped or docked, dry-docked or have some other form of maintenance done to them, it is a shame that we do not have the facilities in place to capitalise on this need.

“Fiji is the central point in the South Pacific so it is very important for the fishing industry and the shipping of goods, that there is a maintenance depot or a maintenance repair facility to cater for those industries,” says Hill.

He is optimistic about the future of Interclean Fiji and, like any commercial operator, is not ruling out the possibility of a closer working partnership with FSHIL when a bigger slipway eventuates.

For now, the company is planning to clear up the two-year backlog and gradually introduce quality standards to streamline services offered to slipped and docked vessels.

And Interclean promises to put its money where its mouth is, provided each stakeholder plays its part.

“We have more equipment coming,” says Singh. “If we work together to lift the standard of the slipways, there is potential for FSHIL to make money faster because if they're giving us 100 boats now, we will definitely be doing 150 to 180 boats. So if they're doing $100 million now, we can take that to $180 million.”