SINGAPORE – Vard Holdings Ltd. has closed its Vard Niterói yard in Brazil and temporarily laid off the entire workforce of its Vard Brevik yard in Norway as a result of an offshore market that “remains challenging,” the company said in its 2Q and 1H 2016 financial results.
“Following the delivery of an AHTS for DOF in April, and the completion of outfitting works in relation to a liquefied petroleum gas (LPG) carrier for Transpetro, Vard Niterói in Brazil has closed off all its projects during the quarter,” the Fincantieri company said in a statement, noting that the closure lowered its exposure in Brazil.
“Yard operations have since been shut down, and the leased land area has been returned to the owners in mid-July. Most of the workforce has been terminated following the yard’s closure, with some key personnel transferred to Vard Promar to further strengthen the management team there,” it continued.
Going forward, Vard’s Brazilian activities will be concentrated on Vard Promar. Work on projects there, comprising three more LPG carriers and two PLSVs, is progressing in line with forecasts.
The temporarily lay-offs from Vard Brevik likewise resulted from sustained periods of inactivity. Its Norwegian shipyards “experiencing varying degrees of utilization,” Vard explained.
“With several offshore projects in advanced stages of construction, and one cancellation pending, the challenge is to bridge a period of low workload while awaiting the arrival of hulls for new projects from Romania. To this end, the entire workforce at Vard Brevik has been laid off temporarily, while the group seeks new opportunities to utilize the idle capacity.”
However, the company reported that its Romanian and Vietnamese yard utilization rates remain strong. Nine of the 15 module carrier vessels from the recent Topaz Energy and Marine contract win are expected to be built entirely in Vard Braila and Vard Tulcea in Romania, and Vard Vung Tau in Vietnam’s utilization has been secured through 2017.
The group is pursuing active leads in other non-offshore segments, the company said, as well as exploring “non-traditional markets” such as the expedition cruise and aquaculture sectors. Its Vard Aukra yard is expanding its services in the aquaculture market after delivering several barges.