Strategic Marine (S) Pte Ltd has signed a deal with PT Trakindo Utama Singapore Branch, an authorised Caterpillar dealer for 50 of its C32 ACERT IMO III engines, amid severe disruptions to the supply of this critical shipbuilding key equipment given the pandemic which has caused disruptions to global logistics and supply chain bottlenecks.
The deal will allow Strategic Marine, a leading shipbuilder of specialty aluminium craft, to significantly shorten its production timeline for new vessels, and ensure visibility to the supply of fast crew boats and crew transfer vessels – which are among its core offerings.
This guaranteed pipeline of engines means the likelihood of unforeseen construction delays has been significantly reduced, even as lead times across the wider industry soar to an estimated 70 weeks, up from the typical average of 15 weeks.
Clients will also benefit from pricing and delivery certainty, as vessel costs have been locked in to hedge against rising prices. Strategic Marine has observed healthy demand for its ships from clients in Asia and Europe and received a significant number of enquiries from potential buyers. It recently signed a deal for six vessels, with another six currently under discussion.
The Company initiated negotiations for its engines with Caterpillar dealer PT Trakindo Utama Singapore Branch in January 2022 following a detailed study of market demand and equipment supply conditions. This included the possibility of exacerbated supply chain delays, given the prolonged global semiconductor shortage caused by Covid-19 stop-work measures amongst others.
“We are constantly assessing the market and exploring ways to reduce delays surrounding critical equipment for our projects and ensure continued timely delivery of our projects,” says Strategic Marine Chief Executive Officer, Chan Eng Yew.
He adds: “Amid the disruptions caused by Covid-19, our priority is to shield customers from uncertainty by tapping on robust relationships with close partners such as PT Trakindo Utama Singapore Branch. Negotiations were tough, but fair for both parties.”
Said Mr Widjanarko Hidajat, General Manager at PT Trakindo Utama Singapore Branch: “Strategic Marine’s vessels have run on Caterpillar engines for the past two decades. It is on the strength of this relationship that we have been able to confidently commit 50 engines to our strategic partner and are delighted to support them as they continue to grow their business amid these challenging times.”
The 50 Caterpillar engines, which will be IMO III compliant if a selective catalytic reduction system is added, will be installed in vessels at Strategic Marine’s new Singapore shipyard at 5 Benoi Road. Recently acquired in February 2022, the 30,924 square metre yard will significantly boost the company’s capacity for shipbuilding, as well as repair and maintenance projects.