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 Emperor Wang
    
Location: On an island, in a river
Fetish? What fetish?
 |  | Davie Shipyard Back From the Dead
< on 11/13/2007 10:41 PM >
|  | | | An interesting article on this storied Canadian shipyard from the business section of today's Montreal Gazette. The recovery is all the more amazing when you consider that the equipment came within days of being auctioned off and dismantled for good in the summer of 2006.
Google Maps imagery.
Born-again Davie shipyard is bustling
Listing expected soon on the TSX. $635 million in work over next 30 months
MARK CARDWELL, Freelance
Published: Tuesday, November 13, 2007
It isn't the million-dollar view of the snow-capped Laurentians, Montmorency Falls or St. Lawrence River that Gilles Gagné enjoys seeing most from his third-floor office window in this working-class city opposite Quebec.
It's the bustle below in a born-again shipyard that many thought wasn't worth a plugged nickel only a year ago.
"It's been quite a turnaround," said Gagné, president and chief executive officer of Davie Québec Inc., now owned by a Norwegian company that pulled the shipyard back from oblivion.
The Norwegian parent company, Davie Yards ASA, was recently approved for listing on the Oslo Stock Exchange and is expected to be offered soon on the TSX
The new entity is part of Teco Group, a Norwegian company that twice saved the 182-year-old enterprise from liquidation. Now up and running, the new company has landed contracts to build five ships worth more than $635 million during the next 30 months.
As of this week, roughly 425 skilled tradesmen - mostly steel workers such as platers and welders - have been recalled since and are now working on site.
Gagné expects that as many as 900 people will be on the job by next summer when simultaneous production on as many as four of the five ships on order will be under way.
Part of the first vessel - one of the three Vik-Sandvik class ships being built for a Norwegian company that services the North Sea oil industry - was laid down in one of the two massive drydocks on Oct. 29.
When it is finished next year, the vessel will become the 717th ship built at the Davie yard since 1825, joining a roster that includes sailing ships, steamships, tugs, destroyers and many of the biggest ocean- and Great Lake-going cargo ships built in Canada.
In addition to the three Cecon vessels, Davie will reconvert two cruise ships for Ocean Hotel, a Cyprus-based company.
Davie has also signed a memorandum of understanding with another Norwegian client to build two more ships for the North Sea oil fields.
Those 130-metre-long vessels would be worth another $190 million apiece and would be delivered in 2011.
If that deal goes through, it would represent more than $1 billion in orders.
"And it doesn't end there," Gagné said, althoug he wouldn't reveal the names of other potential clients the yard is in negotiations with.
After being approved for listing on the Oslo Stock Exchange on Sept. 28, Davie Yards ASA, applied for a secondary listing on the TXS last week via a security known as American Depository Receipts (ADRs), which gives the holders the same financial benefits they would have received had they owned common shares of the issuer.
According to a statement from Davie ASA, it will offer CDRs as part of an initial public offering and a second offering.
The company said that the primary issue will be about $55 million, while the second offering will be $50-million.
Monies raised from the financing will be used to repay the $18-million purchase loan from Investissement Québec, the provincial government's investment arm, and to provide working capital.
According to Gagné, most of the $20 million earmarked for upgrades and modernizations to machinery and buildings has already been invested.
Once owned by Paul Desmarais and Canada Steamship Lines, the company controlled by the family of former prime minister Paul Martin, the shipyard ran aground under the watch of Dominion Bridge before being taken over by the Quebec government.
It was managed from 2001 onward by a court-appointed trustee who had tried unsuccessfully to sell it while continuing operations with a skeleton crew that included Gagné.
The deal with Teco almost fell apart on several occasions.
For Gagné, the low point came at the end of August 2006, when Teco refused to put "a few million more" into the deal to meet the demands of the liquidator.
"I thought it was all over then," Gagné recalled.
"After all we'd been through, it was crushing."
But Teco found another partner and raised its ante, finally closing the deal in October 2006.
Since then, the parent company's success in selling contracts in its home market has made its $20-million purchase of the 57-hectare shipyard and all its equipment - which was estimated to have a replacement cost of as much as $700 million - look like the deal of the century.
"Chalk it up to networking," said Bernard Beaudreau, an economics professor at Université Laval who has followed the Davie shipyard saga for the past decade.
"The problem with Davie, from the end of the 1970s, has been lack of orders. Now, with a foreign owner, life is great."
In addition to giving a boost to the local and regional economy, the phoenix-like rise of Davie is also being heralded as a boon for the Canadian shipbuilding industry.
"It's a significant development because we need the added capacity," said Peter Cairns, a retired admiral and the head of the Shipbuilding Association of Canada, which represents most of the country's largest shipbuilding firms, including Irving, Washington Marine and Canadian Shipbuilding & Engineering.
According to Cairns, in addition to taxes that the shipyard will pay to Lévis and the jobs it will provide in the Quebec City area, the technical skills and trades that will be acquired through the building of North Sea oil-related ships will help it meet and adapt to the growing needs of the federal government, which must overhaul its $10-billion fleet.
"Lots of ships need to be renewed" said Cairns, adding that the list includes "everything you can think of, from icebreakers and Arctic patrol ships to frigates and Coast Guard vessels."
© The Gazette (Montreal) 2007
It's great to be alive! |
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SPEK Photo
 
Location: Where you were not.
"Chere cachère!"
| |  | Re: Davie Shipyard Back From the Dead
<Reply # 1 on 11/14/2007 1:03 AM >
| | | | I have been watching the place for a while, even took a look around. It's not dead yet good for Levi! not as nice for us.
Pour fins d'archives.
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