Contractors looking further afield for new works

Perth-based contractors Decmil Group and Forge Group have reacted to the mining slowdown by seeking work in other industry sectors, with the two companies announcing new deals today outside their traditional scope, worth a combined $207 million.

Decmil said today it had been selected to build the federal government’s $137 million asylum-seeker processing facility on Papua New Guinea’s Manus Island.

The 600-bed Manus Island Regional Processing Centre, being built for the Department of Immigration and Citizenship, will also comprise a 200-room accommodation village for staff, as well as health, welfare and recreational facilities.

Works will commence on site this month, with the facility expected to be complete by January.

Decmil chief executive Scott Criddle said the contract showed that Decmil’s core capabilities, developed in the mining and oil and gas sectors, were transferable to other sectors.

“It is no secret that market conditions within the resources sector have been challenging over recent months,” Mr Criddle said.

“We are therefore delighted to have secured this contract as it broadens the scope of work that Decmil is involved with on a number of fronts.”

At 10:30AM, WST, Decmil’s stock was up 10.4 per cent, at $1.90.

Meanwhile, Nedlands-based Forge Group said it would conduct works on Yara International’s ammonium nitrate plant on the Burrup Peninsula for Spanish contracting group Tecnicas Reunidas SA, in a deal worth $70 million.

Forge said construction of the Technical Ammonium Nitrate processing facility would commence in September and be complete by May 2015.

Works include structural, mechanical, electrical and instrumentation installation.

Managing director David Simpson said the contract would require a workforce of up to 230.

“Importantly, as an industrial chemical project, the Burrup TAN project further diversifies our revenue and earnings,” Mr Simpson said.

“We are actively pursuing opportunities which will give Forge Group exposure to these growth markets.”

The $800 million TAN project will have the capacity to process 760 metric tonnes of nitric acid each day, and 965 metric tonnes of wet ammonium nitrate daily.

It will also produce 915MTPD of dry ammonium nitrate.

At 12:00PM, WST, Forge shares were up 14 cents, at $4.23.