IHC Merwede tops ¢2bn in orders

Ongoing improvements in project management made a major contribution to a rise in net profit from €64m in 2007 to €76m in 2008, although profitability last year was hit by large and unpredictable price rises from within the supplier market. In addition to a 50% global market share in generally custom built dredging equipment, IHC Merwede also builds complex offshore construction vessels and equipment. Both markets performed well until the fourth quarter of 2008, at which time client caution set in. Despite this, the company entered 2009 with a massive €2bn order book.

Last year saw IHC Merwede sell 14 custom built vessels to the dredging and offshore sectors plus another 23 of its standardised Beaver cutter suction dredgers. Five large cutter suction dredgers were sold into the Chinese market and built at IHC’s partner Dalian Liaonan Shipyard.

The global economy is driven by a number of long term factors which IHC Merwede sees as relevant to its business. These include the continuing rise in the demand for energy, the rapid expansion of transport across the world, the increased demand for infrastructure from developing economies, and calls for a new approach to water management.

As a consequence of the credit crunch, a number of large dredging projects in the Middle East have recently been suspended but governments throughout the world want to stimulate their economies and large scale infrastructure projects are widely seen as a means of doing so. So although the current dredging market is characterised by a careful approach, IHC Merwede still reads long term prospects as favourable.

The offshore market is also adopting a ‘slightly careful’ approach at the moment but the major oil companies have indicated that they will go forward with their investment plans for the development of new oil wells.

Recognising the competitive advantage of technical excellence, IHC Merwede invested some €30m, or 3% of revenue, on product development last year and plans to invest even more than that this year.

Work continues on the development of the ‘life cycle support’ concept for the maintenance of the vessels it builds. IHC Merwede has reached an agreement with Belgium’s DEME Group, which includes Dredging International, about the joint development of a forecasting model for maintenance work on dredging equipment.