Austal’s pitch for Saudi ships

Shipbuilder Austal is preparing to take on US competitors targeting a massive Saudi Arabian naval expansion, with chief executive Andrew Bellamy arguing the work could be done in Australia.

The Royal Saudi Naval Force has been planning an expansion of its eastern fleet, with a budget estimated at about $US20 billion ($26 billion).

Mr Bellamy said Austal had been invited to talk to the Saudi navy about the program.

US shipbuilders have been expected to build the warships, with defence publisher Janes reporting earlier this year that Lockheed Martin’s steel monohull version of the littoral combat ship was thought to be a leading contender.

But Mr Bellamy suggested the Saudis were leaning towards the type of LCS vessels that Austal builds for the US Navy.

“It’s my belief that ultimately the Saudi navy will operate an Austal-style concept which will be an aluminium multi-hull,” he said during a visit to the com-pany’s US facilities in Alabama.

If Austal secured orders, he said the vessels could be built in the US, Australia or Saudi Arabia.

While Austal makes LCS vessels in Mobile in the US, Mr Bellamy said Saudi ships could be built in Adelaide and the company’s WA shipyard in Henderson.

“It’s too easy to fall into the trap that says we can’t do this in Australia and export it,” he said.

The chief executive said Austal could establish a presence in Adelaide to tap into its shipbuilding workforce because Henderson did not have the capacity to meet such a large potential contract.

The company has been focused on the Middle East for new business. The Henderson facility is building two high-speed support vessels for the Royal Navy of Oman under a $US125 million contract.

Austal’s $US3.5 billion, 10-ship LCS program in the US has been set back by about six months after delays in completion of the first vessel. The frigate, known as LCS 6, is expected to be completed around August instead of in the New Year period as originally scheduled.

Austal USA president Craig Perciavalle said the programs of both Austal and Lockheed Martin had been rescheduled under agreement with the US Navy.

“As far as the navy is concerned we’re recalibrated and on schedule,” Mr Perciavalle said. “LCS 6, being the first one that we built as a prime (contractor) there’s going to be some learning curve for us to go through the first few ships.”

Austal is going it alone after building two LCS vessels with General Dynamics as the prime contractor.

The company first flagged the delay in February, saying earnings margins in the US operations would be affected.

Yahoo News