SCI to foray into ship-building

The Shipping Corporation of India (SCI), the state-run carrier, is planning a foray into ship-building and will explore the possibilities of setting up a mega yard on the west coast of India.

SCI would team up with existing PSU shipyards to float a consortium. The country's largest shipping company plans to join hands with international shipyards and make bigger vessels at global standards.

"SCI and PSU shipyards would be holding 50 per cent stake in the venture while remaining will stay with international shipyards. The association with private ship makers will give this proposed venture more flexibility and access to technological expertise," sources said.

Declining to divulge details, SCI Director Umesh C Grover told Business Standard that "the company is definitely interested in shipbuilding but it is too premature to comment on it."

The decision by SCI to enter into ship-building comes at a time when the Ministry of Shipping is planning to set up one mega shipyard each on country's east and west coast. While Mumbai Port is the nodal agency for the west coast yard, Ennore Port will coordinate the yard on the east coast.

"The mega yard at the west coast will be either coming up at Pipavav or Mundra in Gujarat. The deep draught is a major attraction to choose these locations. SCI is also likely to submit an expression of interest (EoI) for the project," the sources said.

The shipping industry, worldwide, is currently facing a shortage of new vessels as almost the all yards world over are overbooked till 2009-10. That would mean that if a ship owner places an order for a ship, he will not get a vessel before 2010. Moreover, vessel prices are shooting up owing to the shortage.

Industry analysts point out that India is an ideal location for shipbuilding yards as the country is blessed with the perquisites of shipbuilding such as cheap labour, engineering capabilities, a steel manufacturing base and ancillary support.

"Indian naval and marine engineers are currently offering their designs to Japanese and Korean yards. This can be utilised by Indian companies," the analysts added.

There are 27 shipyards in the country besides big private yards such as ABG Shipyard and Bharati Shipyard.

SCI is currently in the process of entering into terminal handling operations, dredging and land logistics businesses that include setting up container freight stations or inland container depots.