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Brexit opportunities interest A&P

Shiprepair & Maintenance: 3rd Quarter 2018AP Brexit

The past few months have seen a double digit growth in business for the A&P group, which operates yards in Falmouth, Tyne, Tees and Great Yarmouth. The company reports an 18% uplift in the volume of work across all four facilities during the first half of the year, with a particularly strong performance at its North East yards.

 

Many businesses in the UK are clearly concerned by the prospect of Brexit, with confidence ebbing away in some sectors. A&P, however, is more upbeat. Managing director David McGinley says: “We see Brexit as an opportunity, although it is not without its risks. We expect it to open up more collaborative possibilities with European businesses as many of the bigger players rethink their options. It is quite possible that one-time competitors might become partners.”

 

A&P sees particular opportunities in the offshore renewables market, as a result of that sector’s appetite for a UK supply chain. “With three locations on the east coast, we are well placed to secure work relating to offshore wind farms under construction across the UK Continental Shelf,” says McGinley.

 

With regards to post-Brexit risks, A&P highlights concerns over the availability of materials, spares and labour once the UK is out of Europe. “Labour is perhaps our biggest concern and it is because of this that we have invested heavily in our apprenticeship programme,” McGinley points out. “This allows us to actively encourage and support the trades we find the most difficult to recruit, such as welders and platers, and bring new talent into the business. In the face of Brexit this is a business critical issue.”

 

In general terms A&P reports steady improvement in the shiprepair and conversion markets in the UK, despite tough competition with other yards in the UK and Europe, and this is reflected in a number of notable projects this year. One of the highlights of 2018 to date was the docking of four sister ships at the Tyne facility with 24 hours, in-between scheduled departures and arrivals, for a large European customer. “The success of this project was hugely reliant on schedule management to ensure that each ship was delivered to us on time, while also recognising the knock-on impact to the client if we failed to manage the planned and emergent workscopes effectively,” McGinley says.

 

In Falmouth, programmes of high profile work with the Ministry of Defence have continued to be very significant. RFA Tidesurge was docked in Falmouth this summer and preparations are underway for the fourth and final tanker in this series, RFA Tideforce, to arrive shortly for an extensive refit. The Falmouth facility is also delivering a refit for RFA Argus as part of A&P Group’s contract to provide maintenance support to a cluster of vessels, which also include the RFA Mounts Bay, Cardigan Bay and Lyme Bay. A&P’s specialist defence team has recently supported RFA Cardigan Bay while on operations, completing a two week maintenance period in the Middle East, and carried out an eight week alongside repair programme for RFA Mounts Bay in the Caribbean.

 

Outside the naval sphere, perhaps the most significant partnership arrangement for A&P follows the signing of an agreement with Condor Ferries that covers the maintenance and repair of the ferries Commodore Clipper, Commodore Goodwill, Condor Liberation and Condor Rapide until 2021. The forward planning made possible as a result of the long term agreement not only ensures that Condor secures a dry dock well in advance of works being carried out, but also enables the A&P team to plan drydock schedules with a high degree of certainty. At the same time, the repeat custom guaranteed by the scheme enables A&P’s marine engineers to gain in-depth knowledge of the vessels, resulting in more efficient refits. The pre-planning phase of the partnership process will see A&P and Condor working closely together to identify potential issues and minimise risk.

Greater collaboration
The arrangement is attracting interest amongst other customers and could be replicated. “We see a greater sense of collaboration with customers who are keen to harness our experience when planning repair and conversion projects,” adds McGinley.

 

Looking ahead, A&P has a healthy programme of repair and maintenance activity for the remainder of 2018. This includes work on HMS Enterprise, a multi-role survey vessel, and HMS Mersey, a River-class offshore patrol vessel, for scheduled maintenance on a contract awarded from BAE Systems. McGinley adds: “We’re also actively pursuing a number of projects in the reactivation market as clients are starting the planning process to bring vessels that have been in long term lay-up back into service. The buoyancy of this market is directly connected to renewed confidence in the offshore market and we expect this to increase throughout 2018 and into 2019.”

 

Reflecting A&P’s greater optimism over the market and Brexit, the group has an ongoing investment programme spanning all four sites. This includes inspecting, maintaining and updating cranes, to ensure they meet the longer term requirements of the business, and upgrading the paint and blasting facility at Tyne.

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