Tata NYK Shipping Pte Ltd, a 50:50 joint venture set up by Tata Steel Ltd and Japan’s NYK Line Ltd, plans to more than double its fleet to 30 ships by 2014 to meet rising demand for coal and iron ore in India, said two persons familiar with the development, including a company executive.
Tata Steel is the world’s sixth biggest crude steel maker and NYK Line is Japan’s second largest dry bulk ship operator.
“In the next 3-4 years, Tata NYK has a plan to increase its fleet size to 30 vessels including 16 owned ships,” said the company executive.
Large dry bulk carriers will account for as much as 70% of the planned fleet expansion, with smaller capacity vessels accounting for the balance, the executive said on condition of anonymity because he is not authorized to speak to the media. A shipping industry executive briefed on the matter confirmed Tata NYK’s plan. He didn’t want to be identified.
Tata NYK runs a fleet of 14 dry bulk cargo ships of various capacities, two of which are owned while the others have been hired from the market.
At current prices, the 16 new ships will cost about $750 million (3,382 crore) to build, according to shipping industry executives.
The joint venture shipping company was formed in 2007 to move raw materials and finished steel for the Tata group and to allow it gain strategic control over logistics. It also services other customers.
Rajiv Mukerji, managing director of Tata NYK Shipping, was not immediately available for comment. Ships owned by Tata NYK will be registered in Singapore. The city-state is seen by fleet owners as an ideal location to own and operate ships given the conducive fiscal regime prevailing there.
Indian imports of coal may jump nearly seven-fold to 200 million tonnes (mt) a year by 2015 as the growing economy drives demand for metal and electricity.
India’s steel consumption may also surge 14% next year, compared with a 3.5% increase in China and a decline in Japan, according to the World Steel Association.
It estimates that India will likely use 68 mt of steel next year, compared with 599 mt in China, the world’s largest steel consumer, and 62 mt in Japan.
Seaborne trade in iron ore and coal to make steel and generate power will rise 10% this year, according to London-based Clarkson Plc, the world’s biggest shipbroker.
India, the third largest iron-ore exporter, may also become a net importer, as domestic firms buy overseas mines to secure adequate supplies.
NMDC Ltd, India’s biggest iron-ore producer, plans to buy a mine in Australia, its first overseas acquisition.
State-run coal companies including Coal India Ltd, the world’s biggest producer of the fuel, are looking to buy mines in South Africa, Botswana and Mozambique to bridge a domestic supply crunch.
Local supply may fall short of demand by 83 mt in the year ending 31 March, according to the government. “Coal is hot cake now,” said A.K. Gupta, a director looking after the technical and offshore division of India’s biggest ocean carrier, the state-run Shipping Corporation of India Ltd (SCI).
“Domestic production is not enough to meet demand,” said Gupta, whose firm signed a memorandum of understanding (MoU) with Coal India last week to set up a 50:50 joint venture shipping company to provide transport logistics of the fuel from overseas load ports to end-users in India.
“Three overseas proposals are at an advanced stage of due diligence. Some long-term off-take deals are also being worked out. Through this JV, we can deliver coal directly to the power plants,” Partha S. Bhattacharya, chairman of Coal India, said while signing the MoU with SCI for the JV shipping company that will haul 25 mt of coal a year.
“We will do something similar with NTPC,” SCI’s Gupta added.
SCI had earlier formed a similar joint venture with Steel Authority of India Ltd (SAIL) to provide shipping services.
SAIL SCI Shipping Co Pvt. Ltd will also participate in the world dry bulk shipping trade, Gupta said.
Tata Steel is the world’s sixth biggest crude steel maker and NYK Line is Japan’s second largest dry bulk ship operator.
“In the next 3-4 years, Tata NYK has a plan to increase its fleet size to 30 vessels including 16 owned ships,” said the company executive.
Large dry bulk carriers will account for as much as 70% of the planned fleet expansion, with smaller capacity vessels accounting for the balance, the executive said on condition of anonymity because he is not authorized to speak to the media. A shipping industry executive briefed on the matter confirmed Tata NYK’s plan. He didn’t want to be identified.
Tata NYK runs a fleet of 14 dry bulk cargo ships of various capacities, two of which are owned while the others have been hired from the market.
At current prices, the 16 new ships will cost about $750 million (3,382 crore) to build, according to shipping industry executives.
The joint venture shipping company was formed in 2007 to move raw materials and finished steel for the Tata group and to allow it gain strategic control over logistics. It also services other customers.
Rajiv Mukerji, managing director of Tata NYK Shipping, was not immediately available for comment. Ships owned by Tata NYK will be registered in Singapore. The city-state is seen by fleet owners as an ideal location to own and operate ships given the conducive fiscal regime prevailing there.
Indian imports of coal may jump nearly seven-fold to 200 million tonnes (mt) a year by 2015 as the growing economy drives demand for metal and electricity.
India’s steel consumption may also surge 14% next year, compared with a 3.5% increase in China and a decline in Japan, according to the World Steel Association.
It estimates that India will likely use 68 mt of steel next year, compared with 599 mt in China, the world’s largest steel consumer, and 62 mt in Japan.
Seaborne trade in iron ore and coal to make steel and generate power will rise 10% this year, according to London-based Clarkson Plc, the world’s biggest shipbroker.
India, the third largest iron-ore exporter, may also become a net importer, as domestic firms buy overseas mines to secure adequate supplies.
NMDC Ltd, India’s biggest iron-ore producer, plans to buy a mine in Australia, its first overseas acquisition.
State-run coal companies including Coal India Ltd, the world’s biggest producer of the fuel, are looking to buy mines in South Africa, Botswana and Mozambique to bridge a domestic supply crunch.
Local supply may fall short of demand by 83 mt in the year ending 31 March, according to the government. “Coal is hot cake now,” said A.K. Gupta, a director looking after the technical and offshore division of India’s biggest ocean carrier, the state-run Shipping Corporation of India Ltd (SCI).
“Domestic production is not enough to meet demand,” said Gupta, whose firm signed a memorandum of understanding (MoU) with Coal India last week to set up a 50:50 joint venture shipping company to provide transport logistics of the fuel from overseas load ports to end-users in India.
“Three overseas proposals are at an advanced stage of due diligence. Some long-term off-take deals are also being worked out. Through this JV, we can deliver coal directly to the power plants,” Partha S. Bhattacharya, chairman of Coal India, said while signing the MoU with SCI for the JV shipping company that will haul 25 mt of coal a year.
“We will do something similar with NTPC,” SCI’s Gupta added.
SCI had earlier formed a similar joint venture with Steel Authority of India Ltd (SAIL) to provide shipping services.
SAIL SCI Shipping Co Pvt. Ltd will also participate in the world dry bulk shipping trade, Gupta said.