India’s second largest private sector shipbuilder, Bharati Shipyard Ltd, is venturinginto the lucrative ship repair business. Bharati, which is building ships worth Rs4,600 crore for others, will undertake ship repair at its new, Rs600 crore facility being set up at Usgaon, near Dabhol port, in Maharashtra’s Ratnagiri district. It will also carry out repair work at another yard at Mangalore in Karnataka, which is under construction
India has limited ship repairing facilities. Currently, repair work is done by state-owned Hindustan Shipyard Ltd and Cochin Shipyard Ltd. Western India Shipyard Ltd, based in Goa, is the only specialized ship repair facility in the private sector. Larsen and Toubro Ltd’s (L&T) proposed shipyard at Kattupalli in Tamil Nadu will also house a ship repair division.
“The first phase of the Usgaon yard will have the capacity to build ships with a cargocarrying capacity of up to 100,000 tonnes. Ship repairing will be taken up in the second phase of development at Usgaon. Our upcoming yard at Mangalore would also caterto the ship repair business,” said P.C. Kapoor, managing director of Bharati.
Bharati shares fell 2.43% on the Bombay Stock Exchange to close at Rs790 a share on Thursday on a day when most shares went down.
The Usgaon yard will be spread over 250 acres. The firm has already acquired about 180 acres. “The Usgaon facility will have the capability to build dredgers, tankers, chemical tankers and all types of advanced vessels,” Kapoor said.
“Entering ship repairing would be a logical extension to our existing business and it gives better margins than shipbuilding,” explained an executive at Bharati, who did not want to be named. “The margins on ship repairing is around 16-18%. In comparison, the margins on ship building typically ranges from 6% to 8%.”
With Indian and global shipowners expanding their fleet to cater to rising global trade, there is a need for more ship repair facilities in the country.
“In the absence of adequate repair facilities here, ships are now being sent to Dubai and Singapore for major repairs,” said an analyst with a global brokerage firm who tracks the shipping industry.