Denis Welch, CEO, Drydocks World - SEA
JUDGING BY the length and veritable strength of his Curriculum Vitae, Denis Welch is without doubt an engineering man through and through. Yes his shipbuilding and shiprepair credentials are robust enough to make him a strong choice to head up Drydocks World’s march into the South East Asian market but it is the engineering theme that has dominated his working career.
In Denis Welch’s own words, the common denominator “has been engineering-led manufacturing and lots of similarities and experiences that are relevant to the issues we have today, particularly given that we are facing a diverse set of challenges”.
It was during the old Swan Hunter days on the Tyne that Denis first cut his teeth as a naval architect before moving on to spells at A&P, the Gotaverken repair yard in Sweden before “I decided to get a proper job and joined British Shipbuilders on the repair side on the Tyne,” he mused.
Further spells in industry as well as the automotive and aerospace sectors saw him come to Singapore with Intelligent Engineering where he was tasked with setting up a new company in the region before he was approached by Drydocks World to head up the new company formed in April last year.
Just over two years ago, Drydocks World, previously known as Dubai Drydocks, made its first steps towards becoming a global shiprepair and marine group with the $424m takeover of Singapore-based Pan-United Marine. A few months later, it launched another takeover of the larger Labroy Marine for $1.62bn and by the end of 2007 it controlled both shipyard groups, taking them private and de-listing them from the Singapore Exchange.
The acquisitions gave Drydocks four yards, one in Singapore now called Drydocks Singapore, and three on the neighbouring Indonesian island of Batam: Graha, Nanindah and Pertama. The task since then has been to rebrand and integrate the yards into the Drydocks World group.
Drydocks World started dredging operations at a fifth yard on a 174-hectare (430-acre) site in Batam, Indonesia in late September. The new yard, PT Maritime Centre, will be operated by a 80/20 joint venture between Drydocks and offshore engineering company and land rig builder, Fabtech.
Denis Welch
Suggesting that the new yard on Batam could be a business developed to be more vertically integrated than just marine, Denis Welch told SMI: “We are awaiting the responses to the reclamation tenders which have been issued and we will be making a decision sometime in the summer about the speed at which we reclaim a new site.
"At the moment we are planning to put a ship lift there that will handle newbuilding and repair activities but we are looking at a track of land for industrial use – it could be alternative energy or power generation – all of these are areas where the aggregation of shiprepair skills can be easily extrapolated out to other industrial areas.”
The obvious question during these times of financial woe and newbuilding and shiprepair orderbook cutbacks is why plan ahead with a new facility when there is no apparent shortage of yards ready and willing to build or repair any ship?
“I guess the decision we make today will impact on capacities and capabilities in two to three years time and I believe we have a level of confidence that we can say we can make money from the investment,” he answered categorically.
Welch is equally pragmatic about the future and believes that any investment, no matter if it is made by oneof the world’s largest ship building and repair businesses, has to stand on its own. “That is not to say we won’t decide to change the speed of bring-ing it onboard or the emphasis. But the Indonesian investment has been critical to meeting our commitments to our customers. Singapore is a good geographical location but the land and labour is cheaper in Indonesia and the efficiencies in Batam are compelling in direct comparison with Singapore.”
Denis Welch acknowledges that the financial crisis will have an adverse effect on global shiprepair, even to the extent that yard closures will be inevitable. “There will be some form of a Darwinian shake up of the repair sector. Those that are historically in the wrong location will go to the wall.
A shipyard of Drydocks in Batam. Photo by Leong Chan Teik
Denis Welch
“There has been such a rapid rise of capacity in China and historically there has been a response from companies in ship repair to move into ship building. We might see some of them chase the repair business again. But while trading conditions are depressed in China compared with the recent past, there will notbe an increase in the number of vessels trading in Chinese waters whereas our location is ideal. We have the world’s trade passing our doorstep and people like to repair where they are trading. We do see increasing pressure on pricing in ship repair so we are having to constantly sharpen our pencils,” he said.
So how easy is it to manage a business with a turnover of over US$1bn and a staff complement of 30,000? Are you a delegator or a ‘doer’ or a little bit of both?
“I hope I am the latter,” he smiled, “but I am more of a doer than a delegator at the moment but that isn’t part of my history. John Parker, from my days at British Shipbuilders, said about management style that if you are on a journey you need a leader but if you are not on a journey then management will do. And I think that while we bring our business together here we need leadership which has to transcend itself into delegating clear objectives.
“We have good people in the team and we are looking to strengthen the team further so part of this is addressing that issue and ensuring we have respect for each other. We are taking allour managers through an in-house training programme called PORT – people, ownership, relationship building and task management – a six day course delivered in three modules. At the end of this year all our managers will have been through this course – 10,000 hours of off the job training. This is the level of commitment we have to recognise,” he concluded.
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