U.S. SHIP MAINTENANCE & REPAIR— A $50 BILLION TO $60 BILLION 10-YEAR MARKET

By James R. McCaul, President International Maritime Associates, Inc.

10-YEAR FORECAST OF BUSINESS OPPORTUNITIES IN U.S. NAVY SHIP MAINTENANCE AND REPAIR International Maritime Associates, Inc., (IMA), Washington, D.C., has just published a 280-page report which forecasts business opportunities in Navy ship maintenance from 1989 through 1998. It addresses the combatant fleet, Military Sealift Command (MSC) ships, Ready Reserve Force (RRF) ships and Navy service craft. The report also contains a database of contract awards for ship maintenance over the past four years.

It is the most comprehensive business analysis yet made of Navy ship maintenance and repair. The report will be a valuable long range planning tool for any firm involved in the marine and naval business sectors.

Long Term Business Outlook IMA's report separates future business opportunities into work (1) open to coastwide competition, (2) limited to homeport area shipyards, and (3) reserved for commercial nuclear- qualified or naval shipyards.

The report forecasts job starts and expenditures in each of these categories over the next 10 years—the 10-year market could total between $50 billion and $60 billion. East/ Gulf Coast yards could be awarded about 55 percent of this total—$27.5 billion to $33 billion, while West Coast yards could receive about 45 percent—$22.5 billion to $27.5 billion.

Coastwide overhauls—IMA projects approximately 200 overhauls will be open to competition by commercial shipyards over the next 10 years. About 55 percent will be on the East/Gulf Coasts, 45 percent on the Pacific Coast.

Captive area work—The report forecasts more than 1,700 short-term starts (less than six months duration) will be contracted to ship-repair firms over the next 10 years. This work will be reserved for firms in the homeport areas. About 55 percent of the captive work will be on the East/Gulf Coasts, 45 percent on the West Coast. Norfolk, Va., San Diego, Calif., Charleston, S.C., Mayport, Fla., and Long Beach, Calif., will account for 1,200 of the 1,700 short-term availabilities.

Reserved work—About 600 job starts are projected to be earmarked for the eight naval shipyards, three Navy-owned overseas ship-repair facilities, or the nuclear qualified submarine yards (Newport News and GD-Electric Boat).

Impact Of Technology Change New naval ships are designed for extended intervals between overhauls.

Emphasis is being placed on short, frequently scheduled periods during which repairs and maintenance are performed. This has major impact on the geographical distribution of work—as short term availabilities are generally reserved for ship-repair firms in the ship's homeport area.

Gas turbine propulsion will continue to replace steam turbine propulsion in surface ships. Over the next 10 years, 55 gas turbinepowered ships will enter service, while 58 steam-powered Navy ships are retired. Gas turbines require different maintenance than steampowered plants. One result will be less work available to contractors who repair boilers and perform other work related to steam plants.

These are just a few of the technology changes impacting future ship maintenance which are described in IMA's report.

Market Share Assessment The report contains an extensive database of Navy and MSC ship maintenance over the past four years. Data are organized by company and by ship class. The user can quickly profile firms performing Navy ship maintenance and repair.

Exhibit 1 is an excerpt from one of the tables showing ship maintenance awards organized by ship type.

A separate section provides tabulation of contract actions for ship and marine equipment maintenance and repair for each year from FY 1984 through FY 1988. The data show contract actions exceeding $25,000—including initial contracts and subsequent contract modifications.

It provides a base of information for competitive analysis.

U.S. Navy Ship Maintenance, Repair and Modernization: A Ten Year Forecast of New Business and Appraisal of Market Share, published October 1988, is available for $550. To order, contact: International Maritime Associates, Inc., 835 New Hampshire Avenue, NW, Washington, D.C. 20037; telex: 64325 IMA; telefax: (202) 333-8504.

Bath Launches Aegis Cruiser Monterey Bath Iron Works, Bath, Maine, recently launched the U.S. Navy Aegis guided missile cruiser USS Monterey (CG-61) at ceremonies at the shipyard.

She is the fourth Aegis cruiser launched by the Maine yard, which presently has seven of the vessels under contract. The ship is 567 feet in length, with a beam 55 feet. She is powered by four GE LM2500 gas turbines. The Monterey is scheduled to be commissioned in early 1990.

Maritime Reporter Magazine, page 28,  Dec 1988

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