Shipyards have been extremely busy for the last five years, and new yards have sprung up in Mexico, Vietnam, Indonesia, China, and elsewhere to help meet the huge demand for new and upgraded rigs and vessels. A building trend that many assumed would create a brief increase in construction work is ongoing, with a number of yards listing orders through 2012.

The Keppel yards have been particularly busy – and extremely profitable. In a presentation of the company’s financial results for the first half of 2008, Keppel Corp. Ltd. Group Finance Director Teo Soon Hoe reported that the company recorded a profit after tax and minority interest (PATMI) of S$561 million, a 10% increase over the same period last year. “This is the strongest half-year performance that the group has ever achieved,” he said.

According to the half-year report, revenue grew by 8% to $4.9 billion for the group. Keppel Offshore & Marine achieved steady earnings, with PATMI recorded at $287 million, which made up 51% of the group’s total earnings.

The healthy order flow for both jackups and semisubmersibles brought total orders secured for the first half of the year to $3.6 billion. The net order book increased from $11.8 billion to a new record of $13 billion, with deliveries extending into 2012.

Keppel is one of the largest builders of semisubmersibles and holds about 25% of the global market share. And since the demand for semis and jackups remains strong, demand for the company’s services will follow.

Sembcorp Marine (made up of the Jurong Shipyard, Sembawang Shipyard, PPL Shipyard, SOME, Jurong SML, and the Karimun Sembawang Shipyard in Indonesia) has also reported an enormous number of contracts and has at present a very long order book.

In early August 2008, Sembcorp Marine announced the company had experienced record growth for 2Q 2008, with earnings increasing by 51% from $85.1 million in 2Q 2007 to $128.3 million in 2Q 2008. Group operating profits increased 51% from $74 million in 2Q 2007 to $111.5 million in 2Q 2008, while pretax profits registered an increase of 51% from $106.7 million to $160.7 million for the corresponding period.

The 2Q statement says the group’s order backlog is at an all-time high at $9.6 billion, boosted by $4.4 billion of new orders secured in 2008. New rig orders continue to come in, with increasing demand for deepwater rigs. The positive outlook for the offshore production market will see increasing demand for fixed and floating production systems, including FPSOs, Sembcorp Marine says. The company’s current order book stretches deliveries and completion to 2012.

Shipyards around the world are working at capacity, and modifications and expansions are in the works to extend capabilities. With the amount of work pushing the limits of capacity, it is a good time for innovative thinkers to offer construction alternatives. And that is exactly what one Houston-based company has done.

Horton DDS has introduced a way to build deepwater floating systems through a highly automated, purpose-built, movable production facility using integrated design/build methods. Developers say the design is modular and repeatable, and the production line will be able to create large-scale components ready for final assembly, which maximizes the percentage of the total build process accomplished using automated equipment.

Produced components are repeatable and have been designed for minimal assembly complication, reducing the level of sophistication required of the assembling yard. The assembly process consists of stacking components on standard skid ways and floating them off using a barge instead of a dry dock.

The selling point of this design is its simplicity. The high-volume “shipyard” consists of a specially designed production facility, yard assembly areas on skid ways, and a simple barge for floating off the hull and installing topsides via floatover.

The proprietary designs and production facility, combined with standard industry equipment including barges and skid ways, create an economic, high-throughput
delivery system that the designers claim can be applied worldwide.

With full order books making it harder every day to book work in the world’s established yards, the time might be right for this new approach to construction.