Regional Approach to domination in Dredging Industry
Sometimes , I wonder why Dredging Industry is being largely dominated by very few large companies, mainly from Europe.
There is a new challenge to this domination is emerging from China.
There are few notable companies from Middle East, South Asia , South East Asia and Japan but they are more regional in nature.
Why this Industry did not grow as more open and encompassing , Where there will be more choice, competition and better price discovery.
There are many historical reasons and explanations for it but we would focus here on what should or could be done :-
why one should be in Dredging Business:-
a) Any activity where Water is involved would some way or other would require dredging .
I) It could be to create depths at Harbours, Channels, Inland Water -ways, Lakes and Ponds for various navigational requirements, To build/enhance/maintain capacity for Storage of Water or for potable or non - potable use and Environmental objectives .
ii) For reclamation of Land to cater for forever increasing land Demand for Urbanization and Infrastructural activities, and for "islands" for Oil and Gas Industry and Wind Energy Sector.
iii) Dredging and Reclamation plays a vital role in interventions for mitigating some of the Climate change effects or results, especially with the threat of rising seas to the coastal cities and vulnerable coastal eco- systems.
Returns and Sustainability :-
Though returns will be on case to basis and depends upon many factors ( Competition, Client, Financial Management of the Company, its project Management Skills and so on ) but in General the Gross Profit is way above any other Business can provide ( exception may be software Industry ).
Sustainability of this industry does not depend upon the" Demand" factor in General as the need of dredging will exist as long as Humans have any interface with Water , whatever that may be.
The Way Forward :-
To borrow a concept from Airline Industry, a successful dredging needs to aim for regional domination by following "Hub and spoke Strategy".
The Dredging company may have its headquarters or base at a major coastal city in the Region. She can own a strategic fleet of Dredgers and Equipment appropriate for the market size of the region.
This way, the company will have :-
a) Strategic benefit of lower cost of mobilization/ demobilization, which is a very significant cost to the Client.
b) Employ local/ regional talent in order to substantially reduce Cost to the Company of employees.
c) In certain regions and counties , local content has a preference.
d) The Expertise, trained manpower and Consultants for each region are available from Local Pool.
e) Local support Equipment , even dredgers are available to hire/ lease/ purchase.
f) The Finance at a reasonable interest are available on case to case basis.
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