Plans to double the size of one of Europe’s leading offshore heavy engineering facilities have slipped by two years amid continued uncertainty over the subsidy regime for offshore wind farms.
Fife’s Burntisland Fabrications yesterday (FRI) said work to increase the capacity of its base in Methil would begin between “early 2016 and 2017” much later than the early 2014 to 2015 timescale initially proposed when plans were revealed in September.
The news came as BiFab already one of the continent’s leading oil and gas fabricators and contractors told how it almost doubled turnover during the 12 months to the end of 2013.
Accounts published at Companies House revealed sales of more than £141m last year, but also underlined a “cautious” approach in the renewables industry following disappointment over government payments and delays in consenting.
BiFab, in which Perth-based power giant SSE holds both a 15% stake and manufacturing options, followed the utility in sounding a circumspect note on marine wind farm investments. Earlier this year SSE rocked the industry by revealing it was reducing its exposure to a string of interests in the offshore wind sector.
“We remain very cautious regarding the uncertainty and continual delay in offshore wind projects and at the same time await the outcome from the UK Government regarding the EMR and CFDs for the offshore wind industry,” BiFab directors said in their report, also restating a long term aim to bolster the company’s order book by winning business with other utilities.
Discussions over the plan for new engineering facilities which would up maximum production from 80 jacket substructures a year to around 150 continue.
Managing director John Robertson told The Courier his business was at “maximum capacity” with oil and gas work but said he was keen to secure “continuity of work” for the future.
He said delays in the renewables sector had had knock-on effects for BiFab’s expansion plans, but stressed that Scotland’s manufacturing sector had much to be proud of.
Company directors said they were “pleased” to report a near-100% increase in sales during 2013 and revealed they would be targeting further 30% growth over the coming two years.
“This is a strong indication that the market, particularly in the oil and gas sector, is on the upturn creating good opportunities for BiFab as we continue to increase our overall market share,” their statement said.
Works on huge fabrication deals for Premier Oil’s Solan project and GDF Suez’s Cygnus development remain on schedule in what the board called “a major success story” for the firm. The first jacket for the latter is due to leave Fife this weekend.
BiFab said its “very experienced management team” and “highly skilled workforce” had given it a strong position within the UK and continued to support its international ambitions.
The value of its order book reached £300m at the year end. BiFab, in which Gothenburg-headquartered investment firm JCE Group holds a 50.1% stake, said it was hopeful that the current workload would “bridge the gap” ahead of business it anticipates from major offshore wind projects.
The company’s accounts show a pre-tax profit of £5.8m last year an £11m turnaround on the previous period’s £5.6m loss. It directly employed a monthly average of just over 200 people during 2013, including 29 apprentices, but now boasts a total contracted workforce of 2,000 people across its three yards at Methil, Burntisland and at Arnish on Lewis.