Indian SCI to build country’s largest shipyard
Shipping corporation of India (SCI) has firmed up plans to build the country’s largest shipyard with an investment of around Rs 3,000 crore.
The public sector company would compete with Larson and Toubro (L&T), Korean shipping major STX, Essar, Shapoorji Pallonji and Bharti Shipyard for the two shipbuilding projects that the government plans to float. The company is likely to make a formal announcement in this regard in the next six to eight weeks.
“We are talking to some companies including foreign firms to foray into ship-building. We are likely to finalise the partner in the next six to eight weeks after which we would send expression of interest (EoI) to the shipping ministry. The investment in the proposed venture could go up to Rs 3,000 crore,” an SCI official said.
“SCI has discussed its plans with us but we have not received any formal proposal as yet,” said an official in the shipping ministry. SCI is understood to be in final talks with Hyundai Heavy Industries for the proposed joint venture. The PSU plans to have a controlling stake in the venture.
The government had earlier proposed to build two shipyards, one on the west coast and the other on the east coast, of international standards. The sites identified by the shipping ministry are Kakinada, Ennore and Tuticorin in east coast, and Mundra and Pipavav in the west coast. These shipyards would be bigger than all the existing facilities in the country.
The domestic shipbuilding industry is currently pegged at $4 billion and is expected to touch $20 billion by 2020. The combined order book of Indian ship-builders is in excess of $3,700 million. According to estimates, the industry order book has grown at a CAGR of 60% in the last five years. The order book is set to grow in the range of 25 to 30% over the next decade.
“Globally about 72% of the anchor handling tug supply vessels (AHTSV) and 65% of the platform supply vessels (PSV) are more than 20-years old and they need to be replaced, leading to demand for more vessels. This demand for new ships would be met by some of the low-cost manufacturing countries such as China and India,” said an industry watcher.
“Indian companies can beat Chinese ship-builders if they ally with Japanese and Korean companies. That way they would have access to better technology. It would also help India compete with Korea and Japan in the long run,” he added.
The public sector company would compete with Larson and Toubro (L&T), Korean shipping major STX, Essar, Shapoorji Pallonji and Bharti Shipyard for the two shipbuilding projects that the government plans to float. The company is likely to make a formal announcement in this regard in the next six to eight weeks.
“We are talking to some companies including foreign firms to foray into ship-building. We are likely to finalise the partner in the next six to eight weeks after which we would send expression of interest (EoI) to the shipping ministry. The investment in the proposed venture could go up to Rs 3,000 crore,” an SCI official said.
“SCI has discussed its plans with us but we have not received any formal proposal as yet,” said an official in the shipping ministry. SCI is understood to be in final talks with Hyundai Heavy Industries for the proposed joint venture. The PSU plans to have a controlling stake in the venture.
The government had earlier proposed to build two shipyards, one on the west coast and the other on the east coast, of international standards. The sites identified by the shipping ministry are Kakinada, Ennore and Tuticorin in east coast, and Mundra and Pipavav in the west coast. These shipyards would be bigger than all the existing facilities in the country.
The domestic shipbuilding industry is currently pegged at $4 billion and is expected to touch $20 billion by 2020. The combined order book of Indian ship-builders is in excess of $3,700 million. According to estimates, the industry order book has grown at a CAGR of 60% in the last five years. The order book is set to grow in the range of 25 to 30% over the next decade.
“Globally about 72% of the anchor handling tug supply vessels (AHTSV) and 65% of the platform supply vessels (PSV) are more than 20-years old and they need to be replaced, leading to demand for more vessels. This demand for new ships would be met by some of the low-cost manufacturing countries such as China and India,” said an industry watcher.
“Indian companies can beat Chinese ship-builders if they ally with Japanese and Korean companies. That way they would have access to better technology. It would also help India compete with Korea and Japan in the long run,” he added.