Civmec to invest $80m in defence facility

Engineering and construction contractor Civmec said today it planned to spend up to $80 million establishing a new shipbuilding facility at Henderson, and use it as a springboard into the federal government’s $89 billion naval build in the coming decade.

The Civmec facility will be on a seven-hectare site adjacent to the company's existing workshop and will have the capacity to house up to 1,000 workers under the Forgas Marine & Defence brand.

It comes just less than a year after Civmec bought NSW-based shipbuilder Forgacs, as part of a strategy to win work on the east coast market.

More recently, Civmec incorporated a new valve services entity, ForgacsValco, which it said at the time was created in anticipation of a growing valve services market.

The Henderson facility is near the Royal Australian Navy’s Fleet Base West, at Garden Island.

That will put the company in a position to bid on projects such as the Offshore Patrol Vessel build, which will begin in Western Australia in 2020.

 Civmec chief executive Patrick Tallon said the facility would enable Civmec to pursue contracts for the construction and maintenance of a range of vessels, including offshore patrol vessels, for the Royal Australian Navy.

He said that sumarine-related work was still in early days, with DCNS currently collecting information from local companies.

When asked by Business News what would differentiate Civmec's offering from Austal, Mr Tallon said that Civmec has deep experience in steel fabrication, while Austal builds in aluminium. 

"We see this less about competition between WA companies, and more of an opportunity for the WA industry to work together to achieve a greater slice of the pie for the benefit of all Western Australians," he said.

"This facility will be state-of-the art and will make us competitive in Australia and overseas.

"We will be pursuing bids both nationally and internationally.

"We feel a standalone facility, operated by Forgacs Marine and Defence, is required to ensure there is absolutely no adverse effect to our present valuable clients that we deliver for in our other operating sectors.”

Executive chairman James Fitzgerald said Henderson had already been identified by the Commonwealth as one of two suitable locations for the continuous build of Navy ships.

"This is cause for great optimism and reflects highly on Western Australia’s industrial capability and capacity, to which this planned facility will be a significant addition,” he said.

Mr Tallon said Civmec had started with a small workforce in July 2009, and had 70 staff with a revenue of $20 million by mid-2010.

“Today, Civmec has grown to a workforce of over 1,550 people and in this 7-year period we have invested approximately $60 million in our existing Henderson facility,” he said.

“This investment has contributed to the groups combined revenue of approximately $2 billion and generated approximately $138 million in net profit.”

Earlier this week, Civmec won a $160 million contract to work at the Rio Tinto Amrun bauxite project in Queensland.