Palumbo raises its profile

 The Naples-based Palumbo group is taking control of Malta Shipyards, thereby increasing its opportunities in the cruise ship and ferry repair /conversion sectors

Earlier this year the Palumbo group finalised terms with the Maltese government, allowing it to take over the former Malta Shipyards facilities in Cospicua, after a lengthy privatisation process. The long-established Malta Shipyards was closed as a state-owned entity, and its remaining workers laid off, in March this year.

Work is now underway to prepare them to re-open under the privately-owned Palumbo group management within the very near future. According to managing director Antonio Palumbo, “The restructuring plan envisages bringing these areas up to our high standards so that they can meet the needs of customers. Flexibility and optimisation of working time have been the basis of the success of Palumbo Shipyard in Italy, and we will try to replicate that in Malta.”

The official signing of the contract transferring ownership to the Palumbo group took place on 3 June this year in Valetta, at a ceremony attended by Tonio Fenech, the Maltese minister of finance, economy and investment, as well as the Italian ambassador to Malta, Paolo Andrea Trabalza. A new entity, Palumbo Malta Shipyard, was created as a result of the agreement signed.

Some details of the contract terms have also been made public. Palumbo will pay a total of €18 million over a ten year period, as well as an annual payment of €1.66 million to the Maltese government.

The total area being transferred to Palumbo Malta Shipyard is around 220,000m²,, which will be mainly used for repair, maintenance and conversion work. The company will operate four drydocks, of 360m x 62m, 260m x 40m, 216m x 40m and 98m x 35m, as well as 2,000m of quay for alongside projects.

According to Mr Palumbo, “The priority now is to create a task force to establish an action plan to allow an early resumption of activity at the Malta Shipyards site, in stages, and gradually make the yard fully operational with appropriate investments.”

The deal provides that Palumbo will invest more than €20 million over the next five years, although it has yet to announce precise details of the investments which it will make to upgrade facilities. As Mr Palumbo says, “Our plans have to take into account the need to redevelop and improve the yard and raise its quality standards. We have set ourselves a target of reversing the negative trend of yard unreliability due to management problems, by recovering the historical know-how and considerable potential that exists in Malta and to restore its international credibility.”

The purchase of the Maltese yard will significantly enhance the Palumbo group’s position in the Mediterranean shiprepair and conversion market, creating a strategically located network of facilities. The company currently operates a 70,000 dwt drydock in Messina, measuring 267m x 38m, and two floating docks in Naples, the largest of which has a 6,000 tonne lift capacity and is 120m in length. Since Malta’s drydocks can accommodate vessels up to 300,000 dwt and 360m length, Palumbo will in future be able to target a much wider range of types and sizes than it can at present, including large cruise ships and ferries.

There is no doubt that having the Maltese yards within its control will boost Palumbo’s international profile, transforming it into a recognised major player within the region. The purchase would seem particularly timely, since competitors nearby, in Barcelona and Marseille, which have the potential to dock the largest cruise ships, are at present reported to be going through difficulties (the large Marseille drydock is not operational while there are unconfirmed reports that UNB in Barcelona has served notice to end its lease with the port authority).

Palumbo has been operating in the repair and conversion market since 1967, and cruise ships and ferries make up a significant part of its workload. According to the company, last year was a satisfactory one, with its Naples and Messina sites handling a similar volume of work to that seen in 2008. In recent months, the company has been working on two key projects, a cruiseferry for Moby Lines and a Grimaldi roro ship.

Moby Corse was a particularly extensive project, involving a comprehensive refit of a ship that Moby Lines purchased from Brittany Ferries, which operated under the name of Pont L’Abbé (it previously served DFDS as Duke of Scandinavia and before that as Dana Anglia, having been built by Aalborg Vaerft in 1978). As well as repainting the vessel in Moby’s distinctive new ‘Loony Tunes’ livery, Palumbo undertook a complete refit of the interior cabins and public areas, including the self-service restaurant, pizzeria and pub. The ferry left the yard on 20 April for new deployment between Toulon and Bastia.

As a well as investing in enhancing its Malta facilities, Palumbo has been upgrading its domestic yards, including the recent introduction of a 700 tonne capacity dock crane. The company has also added new sheds for building megayachts, which is a key target market for the group.

The company has received an order from Monaco-based Columbus Yacht Ltd for a new 54m yacht, which is expected to be launched by the end of the year. Further negotiations with the same company for a 70m yacht are underway. Work is already in progress on two megayachts of 65m and 75m length. PST