Hindustan Shipyard expects Rs 1,000cr orders

Vizag-based Hindustan Shipyard Limited (HSL), which is reeling under a severe financial crunch, is expecting new orders worth more than Rs 1,000 crore in 2005-06.

Speaking to Business Standard, Ajit Tewari, chairman and managing director of HSL, said, "Our ship-building orders were almost nil between 2000-01 and 2003-04. But in 2004-05, we managed to bag close to Rs 425 crore orders pertaining to ship-building alone. This year, we are expecting ship-building orders worth more than Rs 1,000 crore."

HSL, which is the oldest ship-building company in the country, has already signed a contract with Chennai-based Goodearth Maritime Limited for the construction of six 53,000 DWT (dead weight tonnage) bulk carriers on April 8.

The order is worth Rs 675 crore, and the company is expecting another ship-building order worth Rs 400 crore by the end of March 2006, he said.

"These will be the biggest bulk carriers that HSL has ever built.The first vessel would be delivered in 28 months while we plan to deliver the remaining vessels in a duration of six months, per vessel," he added.

According to Tewari, HSL's turnover doubled, both in ship repair and ship-building divisions, during 2004-05.

HSL achieved a turnover of Rs 250 crore (Rs 140 crore in ship repairs and Rs 110 crore in ship-building) in the fiscal ended March 31, 2005, as compared to Rs 126 crore (Rs 70 crore in ship repairs and Rs 56 crore in ship-building) in the previous fiscal.

"In the current fiscal, we are expecting to achieve a turnover of Rs 350 crore (Rs 150 crore in ship repairs and Rs 200 crore in ship-building). And for this, we need a working capital of at least Rs 100 crore from the central government," Tewari said.

"Completion of the existing ship-building orders is the biggest challenge for us. Though we are facing severe financial problems, we need to deliver the vessels on time to gain confidence from the shipping companies, or else our survival will be difficult. For this, we are implementing alternative financial ways," he said.

"Earlier, HSL used to place orders for the necessary ship-building equipment and materials with its own funds. Now, due to lack of working capital, we are asking the shipping companies to supply the equipment for the construction of ships. This system is helping HSL deliver the vessels on schedule," he said.

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Smooth sailing

• HSL has already received an order worth Rs 675 crore from a Chennai firm
• Company expects another order worth Rs 400 crore by the end of March 2006
• Aims at achieving a turnover of Rs 350 crore this fiscal