Shipping Corp to invest $10 mln in JV's equity
State-run Shipping Corp. of India Ltd. will invest $10 million in the equity of the joint venture it formed this year with textile firm Forbes Gokak Ltd. to tap the niche chemicals market, a senior official said.The venture would buy four chemical tankers, each of which would have about 13,000 dead-weight tonnage capacity and cost $22-23 million, Umesh C. Grover, director for technical and offshore services, said."The idea is not to lose control of the cargo and opportunities while we keep expanding our fleet side-by-side," Grover told Reuters on Monday, adding the business plan for the venture would soon be ready.The venture, which operate with chartered vessels before the delivery of bought ships in 2008/09, would benefit from a change in international rules stipulating that edible oils would also need to be transported by chemical vessels."As per the business plan, we expect to have returns of 15-16 percent on our investment, he said adding, "maybe not in the first year, but going forward."Separately, Shipping Corp. will order for the first lot of 15 vessels, worth about $600 million, in the current quarter as part of its ongoing $1.4-billion plan to acquire 35 ships, he said.Shipping Corp., which has 82 vessels, plans to expand its fleet to handle larger business volumes and rising demand especially from the energy transportation sector.The Indian government, the company's majority owner, last month gave it permission to buy six large product tankers, which would be part of the present complement of 15, he said.The company would also buy other smaller vessels, each costing less than 5 billion rupees, for which no such permission was needed, Grover said.The purchase of 15 new ships would be funded through a mix of debt and equity. The company's shopping list includes eight product tankers, five anchor tug handling vessels and two container vessels.Shares in the company rose 0.62 percent to 162.35 rupees in a weak Mumbai market.