Orion Marine Group Inc. (ORN) recently received a contract to dredge 2 million cubic yards of soil on Houston Ship Channel for about $9 million. The dredging work at the Houston Ship Channel is expected to commence in the third quarter. The entire work schedule is expected to last for seven months.The contract was awarded by the U.S. Army Corps of Engineers.
Dredging enhances or preserves the navigability of waterways or the protection of shorelines through the removal or replenishment of soil, sand or rock. Dredging involves the removal of mud and silt from the channel floor by means of a mechanical backhoe, crane and bucket or cutter suction dredge and pipeline systems.
Orion is believed to have one of the strongest dredging equipment in the industry. Some of the main customers of the company include the U.S. Marine Transportation System and the cruise industry. Orion is positive about its dredging activity in 2013, as the expected increases in cargo volume and future demands from larger ships transiting the Panama Canal will require the service of ports along the Gulf Coast and Atlantic Seaboard. This requirement will lead to additional dredging services and expanded port infrastructure.
Therefore, Orion continues to invest heavily in dredging and dredging equipment which comprised 64.3% of the total property and equipment value in 2012.
Orion Marine is one of the leading providers of a broad range of marine construction and contracting needs. The company currently has a Zacks Rank #2 (Buy). Some other players in the industry which are a good option now and have a Zacks Rank #2 (Buy) are Chicago Bridge & Iron (CBI), Honeywell International Inc. (HON) and Crane Co. (CR).
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