Adani Group orders 2 bulk carriers from South Korean firm

Adani Group orders 2 bulk carriers from South Korean firm
Comment E-mail Print Share
First Published: Fri, May 25 2007. 01 26 AM IST
Updated: Fri, May 25 2007. 01 26 AM IST
Mumbai: Adani Enterprises Ltd, the flagship company of the Ahmedabad-based Adani Group, has placed orders for two new capesize bulk carriers with South Korea’s Hanjin Heavy Industries and Construction Co. for about Rs650 crore. The order will be funded partly from $250 million (Rs1,025 crore) foreign currency convertible bonds raised by the company in December 2006.
“We have ordered two capesize ships at Hanjin yard and these will be delivered in the last quarter of 2010,” said an Adani Group official who did not want to be named. The ships are being acquired through Adani Shipping Pte Ltd, the Singapore-based wholly-owned subsidiary of Adani Enterprises, and will fly the Singapore flag. The city-state is seen by Indian shipowners as an ideal place to own and operate ships given the conducive fiscal regime prevailing there.
Capesize vessels are the largest ships capable of carrying dry-bulk commodities and typically can carry as much as 175,000 deadweight tonnes of coal, steel or iron ore.
Deadweight is the displacement of the ship including the crew, passengers, cargo, fuel, water and stores, minus the weight of the ship without fuel, passengers, cargo, water, etc. on board.
These ships have to travel between oceans via the Cape of Good Hope or Cape Horn because they are too large to sail through either the Suez Canal or the Panama Canal.
The Adani Group trades in commodities, makes edible oil, runs the Mundra Port in Gujarat and distributes natural gas.
The ships will be used by Adani to transport coal from its mines in Indonesia to the proposed 2,000 megawatt coal-based power plant coming up at Mundra.
On the return leg, the ships will carry iorn ore to China from the company’s mines at Belekeri in north Karnataka. This will ensure business to the ships both ways, helping the firm gain control over cargo and save on ship-hire rates.
Since the company does not have expertise in operating ships, the task of managing and crewing the vessels will be outsourced to professionals in this area, the official said. The two ships will make 12 trips in a year, carrying 2.2 million tonnes of cargo.
The cost of transporting dry bulk commodities on ships have soared 48% this year on the back of rising demand for raw materials from China, the world’s top consumer of iron ore and coal. Besides, shipping congestion at Australian ports, including at Newcastle, the world’s busiest coal export port, is cutting the supply of vessels leading to higher rates.
The average daily hire rate for a capesize ship is currently $108,907, according to the London-based Baltic Exchange’s capesize Index, a measure of costs for capesize vessels.
Comment E-mail Print Share
First Published: Fri, May 25 2007. 01 26 AM IST
More Topics: Corporate News | Sector Spotlight |