Companies Eyeing Booming Shipbuilding Business
Firms are increasingly getting into ship building and repairing as shipbuilding orders are expected to rise significantly to meet the boom in seaborne trade and increased offshore oil exploration. The local industry is expected to expand to $20 billion by 2020 from close to $5 billion now, a report by maritime consultants i-maritime Consultancy Pvt Ltd said, which is about 1 percent by value of total global shipbuilding orders.
Besides subsidies given by the government to local shipbuilders, which is a big incentive, a major part of the world shipping fleet is very old and due for replacement, CFO Mr. Dhananjay Datar of ABG Shipyard said. "There is a clear visibility of growth of the industry in this part of the world," said Mr. Datar, whose firm is the largest private-sector ship-builder. Engineering firm Larsen & Toubro already has one ship building yard in Gujarat state and plans to invest about Rs.15 billion for shipbuilding and a repair yard.
Gujarat-based Adani group is setting up a ship building and repair yard at a cost of about Rs 10 billion. Earlier this month, a media report said Reliance Industries plans to spend $2 billion on shipbuilding and dredging. Besides the location advantage as large number of vessels sail through India, steel mills have started manufacturing steel plates used in shipbuilding, Mr. M V Kotwal, board member of Larsen & Toubro, said. Earlier, shipbuilding steel used to be imported. Essar Steel is already manufacturing shipbuilding steel and plans to increase it with the commissioning of a 1.5-million-tonne plate plant in Gujarat next year.
The government provided a 30-per cent subsidy on value of ships built by Indian yards, which would sail under a foreign flag. This concession was for a 5-year period to August 2007. The industry hopes this would be extended to help compete with their overseas competitors. This subsidy is also given to certain ships built for the local market. Shipyards in India are moving up the value chain in terms of complexity and types of vessels being constructed, a report by Angel Broking said.
Source: www.hellenicshippingnews.com
|
