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Aker Solutions to Invest USD 60 Million in an Umbilical Plant

17 April 2012

The Star reported that Norway based oil & gas firm Aker Solutions will invest USD 60 million to set up an umbilical manufacturing plant in Pekan in Pahang.

Mr Crawford Tennant Aker Solutions Asia Pacific umbilicals president said that the facility is expected to begin operations in the fourth quarter of 2013. He added that "It will be the first steel tube umbilical plant in Asia Pacific."

An umbilical is a cable which supplies required consumables to an apparatus. The umbilicals from Aker Solutions will be deployed on the seabed to supply necessary controls and chemicals to subsea O&G gas wells, subsea manifolds and any subsea system requiring a remote control.

The plant, which will complement the group's two existing plants in Norway and the United States, will be located on a site measuring 80,000 square meters and is expected to employ between 120 and 150 people initially. Aker Solution's plants in Norway have an annual cable output of between 300 kilometers and 500 kilometers.

Mr Tennant said he expected the Malaysian facility to have a similar output eventually. He added that "The plant will primarily serve clients within the region. But we will also cater to global demand as well, if necessary. We hope to get the first umbilical out either by the end of next year or by the first quarter of 2014."

He said the setting up of the plant in Malaysia would expand Aker Solution's manufacturing capacity and strengthen its position as a leading producer of steel tube umbilicals.

Mr Tennant also said ground works on the site had already begun, with construction expected to commence by the end of the year. He added that "Setting up a plant here also makes it more cost efficient to deliver our products to clients within the region than by sending them from either Norway or the United States."

Mr Tennant said he was optimistic about the outlook for steel tube umbilicals in the region. He added that "We see the demand for umbilicals growing in the next few years. Some of our bigger projects currently are in the region. On the global front, some projects slowed down following the global economic crisis but it's picking up again. We're now seeing an increase in tender activity for umbilicals globally."

Aker Solutions has been present in Malaysia since 1981. Being in the country for over 30 years, Mr Tennant said it was a natural decision to build the facility here. He added that "It was part of our strategy to build the facility in Malaysia."