Shipping Corporation of India delays fleet expansion
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The Shipping Corporation of India said it will delay the acquisition of 72 new vessels it had planned to buy during the 11th Five-Year Plan covering 2007 to 2012.
“The company expects a correction in ship building prices and hence, has put its plans for acquiring vessels on hold,” said Sabyasachi Hajara, chairman and managing director of SCI.
Hajara said the state-owned company would instead look at the option of buying second-hand vessels which are much cheaper compared with newbuildings.
“Usually, SCI does not buy second-hand ships, but given the market conditions, we are considering acquiring second-hand ships with an average age of two to three years,” he said.
The national carrier planned to spend more than $3 billion for the fleet expansion, and placed orders for 28 vessels at a cost of around $1.6 billion.
Hajara said despite a marginal recovery in dry bulk rates, the outlook for the shipping market is still grim, and a turnaround is not expected until mid-2010.
SCI currently has a fleet of 78 vessels and manages 58 vessels on behalf of various government organizations. Two 4,400-TEU vessels delivered in October last year have been phased into the Indian-Subcontinent-Europe Service, operated in conjunction with Mediterranean Shipping Company since May this year.
Meanwhile, in a separate announcement on Thursday, SCI said it will seek a rate increase of $150 per 20-foot equivalent unit for cargo moving from the Indian Subcontinent to Europe, effective Oct. 10.
SCI, recently granted more operational freedom and financial autonomy, reported net profit for the April-June quarter dropped 57 percent to $25 million from $58.16 million in the year-ago period. In fiscal 2008-09 ended March 31, profit surged nearly 16 percent from a year earlier to $199 million.
“The company expects a correction in ship building prices and hence, has put its plans for acquiring vessels on hold,” said Sabyasachi Hajara, chairman and managing director of SCI.
Hajara said the state-owned company would instead look at the option of buying second-hand vessels which are much cheaper compared with newbuildings.
“Usually, SCI does not buy second-hand ships, but given the market conditions, we are considering acquiring second-hand ships with an average age of two to three years,” he said.
The national carrier planned to spend more than $3 billion for the fleet expansion, and placed orders for 28 vessels at a cost of around $1.6 billion.
Hajara said despite a marginal recovery in dry bulk rates, the outlook for the shipping market is still grim, and a turnaround is not expected until mid-2010.
SCI currently has a fleet of 78 vessels and manages 58 vessels on behalf of various government organizations. Two 4,400-TEU vessels delivered in October last year have been phased into the Indian-Subcontinent-Europe Service, operated in conjunction with Mediterranean Shipping Company since May this year.
Meanwhile, in a separate announcement on Thursday, SCI said it will seek a rate increase of $150 per 20-foot equivalent unit for cargo moving from the Indian Subcontinent to Europe, effective Oct. 10.
SCI, recently granted more operational freedom and financial autonomy, reported net profit for the April-June quarter dropped 57 percent to $25 million from $58.16 million in the year-ago period. In fiscal 2008-09 ended March 31, profit surged nearly 16 percent from a year earlier to $199 million.