It is upbeat about prospects on strong demand for its integrated solutions.

LEEDEN, formerly known as Ace Dynamics, is upbeat about its prospects ahead, thanks to the strong demand for its integrated solutions from the marine and oil & gas market. 'Our 1H07 net profit is already higher than FY2006, so we expect a record year of profitability this year,' said managing director Steven Tham.

For the six months ended June 30, the company reported a 71.1 per cent jump in net profit to $2.7 million, while turnover rose 30.2 per cent to $50.7 million. Leeden's positive assessment came as clients in the marine, oil and gas industry contributed some 50 per cent of its total turnover last year, and they include 'some major shipyards, rig building yards, fabrication yards in the region'.

With most shipbuilding yards enjoying record order books and visibility to 2010, Leeden is optimistic that this industry will continue to do very well in the near future.

As an integrated solutions provider, Leeden supplies industrial gases, welding and safety products. Under its gas division, the company offers a comprehensive range of industrial gases used in industries like shipbuilding, marine and oil & gas refining.

Its welding division supplies products such as welding equipment, accessories and consumables, while its safety products include workplace solutions covering personal protective equipment, fall protection equipment, environmental control and emergency response equipment.

As the products from the three divisions are largely complementary in nature, some analysts believed that Leeden is well positioned to benefit through cross-selling of products. DBS Vickers said in a report: 'For instance, Leeden is able to cross-sell welding gases as well as safety equipment to customers looking to purchase welding equipment.'

The firm already has a presence in Singapore, Indonesia and Malaysia, and there are plans to set up offices in Shanghai, Thailand, Vietnam and the Philippines next year. 'We are currently doing business from Singapore in these markets and we plan to further tap on existing demands there,' Mr Tham said.

China is seen as a big growth driver for the company, as it is already the third largest shipbuilder in the world. Indeed, 'it is poised to take over Japan and Korea soon to become number one in the world, and we believe our plans to penetrate into China is timely and will establish us in this market', Mr Tham said.

Leeden is planning to establish offices in Dalian in three years' time and in Guangzhou five years from now. Leeden said that the outlook for these markets look promising, with the rising offshore production activity driving indirect demand for integrated services.

The DBS report said that the growing demand for oil, coupled with escalating oil prices, have led producers to step up exploration and drilling activities.

Already, 'data from Energyfiles Ltd revealed that with crude oil prices sustained above US$40 per barrel since July 2004, offshore capex spending has risen 64.3 per cent over 2004-06', and this is projected to continue over the next few years, thus driving indirect demand for welding solutions along with it.

The order backlog for floating production systems is the biggest for many years and according to International Maritime Associates, around 65 of at least 122 projects in the bidding, design or planning stage as at July 2007 are expected to be floating production, storage and offloading units (FPSOs).

As these units typically require extensive corrosion-resistant process piping, the higher production of FPSOs is expected to drive the demand for welding products.

The analysts saw the company's expansion plans in Shanghai, Thailand and the Philippines over 2008 as a means of broadening its distribution network and increasing its revenue.

Noting that Leeden is already supplying to Chinese shipyards like Cosco Dalian Shipyard and Shanghai WaiGaoQiao Shipbuilding, DBS expected further growth in those segments as Chinese shipyards gain prominence in shipbuilding and repair.

Business Times 30th Oct 07