AJOT – Advanced Ship Recycling Facility Opens in Roosevelt Roads, Puerto Rico

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31 December 2015 – A new ship recycling facility, representing a new era for safe and environmentally sustainable operations and industrial development in Puerto Rico, has been established on the grounds of the former US Naval Base at Roosevelt Roads, in Ceiba, Puerto Rico, by the US-based Marine Environmental Remediation Group (MER). The new facility will initially employ approximately 700 people and will inject into the economy an estimated capital investment of $19 million for the reclamation of steel and other metals recovered using state- of-the-art “green” technology, and the re-selling of vessel machinery and equipment recycled from sea-going vessels and platforms which have been retired from use. The 4,000 LDT retired pipe-laying vessel Lone Star has already been moved into place as preparations for recycling begin. “We would like to thank Governor Alejandro García Padilla and his office, Secretary of Economic Development and Commerce Alberto Bacó Bagué and his staff, the Executive Director of the Puerto Rico Industrial Development Company (PRIDCO) Antonio Medina Comas and his entire staff, especially Jan Modesti Torres, Executive Director Malu Blázquez Arsuaga and the staff of the Local Redevelopment Authority for Roosevelt Roads (LRA), Mayor of Ceiba Angelo Cruz Ramos, Mayor of Naguabo Noé Marcano Rivera, and the Executive Director of INDUNIV Research Consortium Iván Lugo, and many others who have all played a substantial role in helping to create this tremendous opportunity to make the Commonwealth of Puerto Rico the new home of world-leading technology and environmentally-friendly vessel recycling operations” said MER CEO, Martin Vulaj.

Operated locally by MER Group Puerto Rico, the newly refitted MER Group US East Coast/Caribbean Facility has been established on land leased from the Local Redevelopment Authority. The recycling operations will employ technological innovation and patented proprietary procedures, which significantly reduce risk to the environment and the safety of personnel associated with conventional ship-breaking activities.

“Steel is a uniquely recyclable metal because the recycling process does not significantly diminish the strength of the material. Recycling steel benefits the environment because it provides an economic alternative to mining and smelting ore. Since ships are made almost

entirely of steel, they provide an efficient way to produce large quantities of high-quality steel for recycling, and processed plate and structural steel from ships is in great demand worldwide” noted MER Group Clarence LaMora. MER will supply the steel produced at Roosevelt Roads to consumers around the world, which will result in increased global trade with Puerto Rico.

Worldwide, ship recycling provides more than 600 million tons of steel and other recovered materials, representing approximately 40% of global demand for raw materials, and generating a combined revenue exceeding $200 billion. In 2014, facilities in India, China, Pakistan and Bangladesh represented 91% of all vessel demolition, with India holding the largest market share. Considerably stricter environmental regulations in the United States and Europe require vessel demolition to be carried out at facilities conforming to recently established and considerably higher operational standards, creating a new market for advanced vessel recycling technologies and procedures.

Green: MER has pioneered an environmentally-sensitive process of dismantling obsolete vessels that meets or exceeds all U.S. EPA, OSHA, state and Commonwealth regulations. These standards will also become the required performance levels for European Union-flagged and owned ships under the new EU Ship Recycling Regulation. Conventional ship breakers, on the other hand, simply drag a vessel up onto the beach, where the hull is cut into sections with any contaminants dropping directly onto the ground, and exposed to the open air.

The difference in the MER approach is to utilize a vertical reduction employing a Ship’s WaistcoatTM (a proprietary invention developed by MER), which prevents contaminants from touching the surrounding water. Vessel deconstruction is performed through the removal of larger intact sections (referred to as “modules”) while maintaining the ship’s watertight integrity, trim and stability. The modules are then transported to an indoor cutting facility that captures and filters contaminants that would otherwise simply be released into the air. Inside, the modules are processed to appropriately sized recyclable material. MER also takes the step of storing its processed metal under cover to avoid contamination of the environment from stormwater runoff. Once the ship has been reduced to the lower hull area, still afloat and capable of being towed, the remaining section (referred to as the “canoe”) is towed either to a dry dock or to MER’s Peerless Roller Slip (another proprietary invention developed by MER to protect the environment by keeping the hull of the ship off the ground – and out of contact with the soil) in which the final cleaning and demolition is performed. Once finished and all the sections of the ship have been removed, the Peerless Roller Slip is scoured, removing any potential environmental contamination, prior to being re-used to receive the next canoe.

Safe: Conventional ship breakers disassemble ships with little regard for the engineering involved in the original construction, and workers are provided little or no instruction and are rarely provided adequate protective equipment. Sadly, due to a lack of organization, training and protection, fires, explosions and serious injuries and deaths are common at conventional shipbreaking yards. MER’s operations, by contrast, are carefully managed and the disassembly of each ship is carefully planned before operations begin. MER’s entire recycling team is rigorously trained and certified by a professional training staff for the work that is performed and all operations are supervised by expert managers and foremen who have years of experience conducting this work safely. “MER’s core is supported by the men and women in the operations department who recycle these ships. We as a company owe it to our teammates to keep them safe by reducing risks that could cause workplace accidents, and this is accomplished through the development of a culture of safety in operations which is achieved by training and certification, safety awareness, and provision of all appropriate protective equipment,” said Mr. LaMora.

Former US Environmental Protection Agency (EPA) Administrator Christine Todd Whitman said “MER Group’s patented technology and processes will revolutionize the ship recycling industry and will help to turn currently unsafe and environmentally unsound practices into a thing of the past. We at the Whitman Strategy Group are pleased to continue our association with MER Group and look forward to seeing economic growth and job creation emerge from these efforts.” The Whitman Strategy Group joined MER’s Advisory Board in October and added their expertise to that of retired US Navy Rear Admiral Richard Camacho, former CEO of BAE Systems Ship Repair Bill Clifford, and former CEO of Stanships Paul Sa.

With almost 3,000 linear feet of quay at the current facility, MER will be able to accommodate multiple vessels simultaneously. MER plans to recycle at least 50,000 LDTs annually. The Atlantic VII, a 3,124 DWT retired general cargo vessel built in 1977 is currently being towed to the new MER US East Coast/Caribbean Facility, and will arrive in the next few days, and MER is in the process of acquiring additional ships for processing at its new facility in Puerto Rico. MER is also actively hiring and training for the 700 full-time, permanent skilled jobs that are being created in Roosevelt Roads, Puerto Rico.