Mumbai: India’s largest private shipping company Great Eastern Shipping Co. Ltd, or GE Shipping, hived off its offshore business into a separate company, Great Offshore Ltd, in 2005. However, even after this business split, GE Shipping has been investing aggressively in offshore services through its wholly-owned subsidiary Greatship India Ltd. Greatship India Ltd is investing more than $830 million (Rs3,569 crore) for acquiring offshore services assets and building India’s youngest offshore fleet, including jack-up drills used for exploring oil. Ravi K. Sheth, executive director of GE
Aggressive moves: Sheth says the firm will remain focused on oilfield services and has no plans of getting into shipbuilding and dredging. (Photo: Abhijit Bhatlekar/ Mint)
Shipping and managing director of Greatship India, does not see this as a shift in the company’s business strategy. “At this point, the value of ships is high and there is less opportunity for investment in shipping. But if the market corrects, money will go back to shipping, which is our core business. Money must flow seamlessly between businesses,” Sheth says in his first interview with the media after the split. According to him, there is no no-compete and no-poaching agreement between GE Shipping and Great Offshore, which is headed by his cousin Vijay Sheth. “We are on the best of terms and there is absolutely no animosity between us,” Sheth adds. Greatship India will be present in all areas providing support to oil and gas exploration and production companies and Sheth rules out any future split in GE Shipping between shipping and offshore businesses. He also rules out any possibility of taking the subsidiary to the market at least till 2010-11 or seeking any private equity investment in it. “GE Shipping has sufficient cash flow to fund the plans and there is no need for cash from any investor at this point,” he says. Edited excerpts from the interview:
GE Shipping is now focusing more on its offshore business and its investment in the offshore business far exceeds that in the shipping business. Is there a shift in business strategy behind this?
GE Shipping’s entry into the offshore sector is through its wholly owned subsidiary, Greatship, and therefore, is strictly not its own capital expenditure. Greatship commenced operations in 2006 and we clearly foresaw a demand upswing in oilfield services, given the global under-investment in this sector for over 10 years and the need for countries and oil companies to step up their exploration programmes.