Steve Bailey, Australian president of Kvaerner Oilfield Products, said the closure was a result of the soul searching done by Kvaerner when the company found itself in serious financial difficulties two years ago and the Aker group took a controlling stake in the company.
"The troubles of last year identified a rash of Kvaerner companies that were doing the same thing, in effect competing against each other. We found we were actually bidding against each other in some instances.
"The unit (E&C) wasn't profitable in Australia and the Kvaerner's ruling was that business units with no history of profitability and no real likelihood of profitability were to be shut down.
"No one likes to shut down operations or put people out of work but that what is needed to be done for the whole group to move forward.
"There are so many engineering houses in Perth - they breed like flies. Kvaerner E&C could not compete in that niche - in the high end - on a cost basis. So that part of the business is pulling back to Singapore."
Kvaerner will have around 150 staff remaining in Perth, and about the same number in Melbourne. They are spread around the Kvaerner Process, Kvaerner Facilities Management and Kvaerner Oilfield Products business units.
"In the end it comes down to being able to deliver a product more efficiently," said Bailey.
In Asia Pacific, Singapore will become the main hub for Aker Kvaerner. The company said the region would serve the key markets of China, Malaysia and Indonesia, in addition to Vietnam and Australia, through a network of facilities including Singapore, Beijing, Shanghai, Kuala Lumpur, Jakarta, and Perth.
The 1,200 Aker Kvaerner staff in the region are involved in front end design, engineering and project management for development projects as well as maintenance and operations support. Aker Kvaerner also has substantial resources in the provision of supplies for marine, drilling and subsea products in the region. Based in Singapore, George Lim will lead Aker Kvaerner's Asia Pacific operations, reporting to CEO Sverre Skogen.
