Shipping Corporation of India delays fleet expansion
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.