PROSPECTUS - Swissco Holdings Limited

Prospects, Future Plans and Business Strategy
The marine industry has been one of the bright spots in the recessionary economic climate in
Singapore in the past few years. The prospects for our OPL business are expected to be good for the
next few years so long as the Singapore port continues to be one of the world’s busiest port in terms
of vessel and cargo tonnage. As more vessels pass through Singapore, many of them will choose to
rendezvous at OPL for crew change and to replenish their supplies and they will require our services.
The prospect of the offshore support services industry depend on the price of oil and natural gas that
directly determines the level of activities in the offshore oil and gas industry in this region. Higher oil and
gas prices have the potential of increasing exploration, development and production as the price
justifies the capital expenditure for such activities. The price of oil and natural gas is affected by demand
and supply for such natural resources globally. With the economic recovery of the developed countries
the demand for oil and gas to fuel industry and for domestic consumption will increase. Supply on the
other hand depends on global political and economic environment, advances in exploration and
development technology and government restrictions placed on exploration and production activities.
Arising from an upturn in the regional economies, there is a resurgence in maritime traffic and marine
infrastructure development activities such as expansion of ports and berths, dredging and land
reclamation. This will lead to an increase in the employment of marine logistics support vessels and in
turn lead to an increase in demand for repairs and maintenance of vessels by their owners to keep them
operational.
We believe that with growth resuming in the global economy, trade will increase and therefore this will
improve the prospects of the marine industry generally. The recent strengthening of shipping freight
rates is a good indicator of the health of the shipping industry that our business supports. We are
cautiously optimistic that our prospects in both the marine logistics and ship repair and maintenance
services sectors that we serve, are likely to be good due to our strong competitive position.
To take advantage of the growth opportunities, we plan to:
Expand and upgrade our fleet
We will continue to build new vessels to replace older ones and to increase our existing fleet of support
vessels and tugboats and barges. The specification of our new support vessels will extend our fleet
capability to support a wider range of services required particularly by the offshore oil and gas industry
in this region. We have accepted delivery of three new barges in February and May this year, of which
two new barges are 500 GRT and above. In addition to these three new vessels, two other new vessels
that will be delivered at the end of this year are specialised vessels for the oil and gas industry and are
expected to attract better charter terms due to the wider range of services they can perform.
Penetrate new markets
Our Group is fully committed to tap the potential of the offshore oil & gas industry and the marine
infrastructure developments within the region. We have been operating in Indonesia and Malaysia
through our associated companies. With the delivery of five new vessels in 2004 and eight new vessels
in 2005, we believe that we are well-positioned to expand further into the marine logistics industry. This
would similarly apply to our repair and maintenance business as it extends its operations to new
centres that have a pool of skilled or easily trainable but lower cost workers to man its yards. We will
be exploring opportunities in the region where there is a demand for quality marine repair and
maintenance facilities.
Expand our ship building capability
We will continue to upgrade our skills and the capability of our ship repair and maintenance yards to
build new smaller to mid-sized capacity support vessels. It is an extension of the yard labour and project
management ability. We have an advantage in that we have an ongoing need for new vessels and it is
only the opportunity cost of utilising our own facilities as compared to the more cost competitive ship
builders in the neighbouring countries that cause us to presently build our new vessels at third party
yards.
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