SKS Shipping sets up subsidiary in Singapore

The Mumbai-based coastal shipping company SKS (Ship) Ltd, formerly Shahi Shipping, has floated a wholly owned subsidiary in Singapore.

This subsidiary has firmed up plans to acquire eight 150 twenty foot equivalent units (TEUs) to launch services between Port of Pasir Gudang (Malaysia) and Port of Singapore.

Chairman and Managing Director Sarvesh K Shahi confirmed the development. He said the subsidiary initially would have a fleet of three container vessels under the Singapore flag.

"We will soon start trials in the Singapore-Malaysia route. If it is successful, we will ramp up the operations in the route by acquiring more vessels," Shahi said.

SKS Ship has also acquired two vessels for Rs 12 crore. "The company has bought one 9,500 dead weight tonne (DWT) breakbulk vessel for Rs 10 crore and one tug with the capacity of 30 tonne Bollard Pull for Rs 2 crore," Shahi said.

According to shipping analysts, induction of these vessels will enable the company to generate Rs 10 to Rs 12 crore per year.

Currently, SKS (Ship) is operating a fleet of 34 coastal vessels including container and multi purpose vessels.

"The shipping industry is overburdened with taxes. Any shipping company worth its salt plans to set up subsidiaries in tax free countries including Singapore, Panama and Bermuda," an analyst pointed out.

The company is also planning to acquire five geared container vessels for further expansion. Sources said the company might come up with a secondary offering to raise Rs 50 crore by June-end.

"SKS Ship is in talks with IDBI and Karvy Consultants for the proposed public issue," a source said.

The company is likely to register 20 to 25 per cent rise in its turnover for the current financial year while the proposed acquisitions will enable it to post 35-40 per cent growth in the next financial year, the source said.

Meanwhile, SKS Ship's plan to construct a drydock in Mankhule in Maharashtra has been delayed due to protests from villagers, who are living in the proposed site.

The plan was to invest Rs 10 crore in the first phase for drydocking small vessels. In the second phase, the company had devised an investment of Rs 25 crore for offshore supply vessels.

"Once the problems are resolved, the company has plans to construct a Rs 100 crore ship-building yard in Mankhule in 35 acres," Shahi said.