Mumbai: Chennai-based logistics firm Sical Logistics Ltd acquired a Chinese-built dredger for $24.92 million (Rs102.42 crore), joining other recent Indian entrants in a lucrative global dredging market.
Dredging work at ports and harbours are carried out with the help of specialized ships called dredgers. The international dredging market, estimated at $14 billion annually, is growing on increasing sea trade, tourism opportunities and reconstruction of marine and port infrastructure.
“With few firms possessing the required expertise and infrastructure to undertake international dredging operations, the market is facing a supply constraint. The acquisition of the dredger will enable Sical to tap the booming opportunity in the dredging market,” said Ashwin Muthiah, chairman, Sical Logistics.
The dredger, acquired from Chinese firm Shanghai Duo Jun Dredging Co. Ltd, was built in 2006. Sical will deploy the cutter suction dredger in China, where it is estimated to earn $9.8 million in annual revenue.
“The firm plans to acquire more cutter suction and trailer suction hopper dredgers to serve the needs of the booming Indian and Asian dredging market,” said Muthiah.
A cutter suction dredger cuts rocks and digs hard soil and sand, while a trailer suction hopper dredger collects the dredged materials and takes it to the deep sea for dumping.
The cost of dredging works have gone up by 30-40% in the last 18-24 months as a spurt in port expansion projects globally and offshore construction-related land reclamation works in the Gulf region have led to a shortage of dredgers worldwide. The current dredging costs ranges from about $2.5-3 per cubic metre for maintenance dredging (to maintain the required depths at ports for movement of ships) and $4-5 for capital dredging (to create new ports and harbours and to deepen the channels and berths of existing ports), according to an official at state-run Dredging Corporation of India Ltd who did not want to be named.
“A cutter suction dredger currently fetches a day rate of about Rs6 lakh per day, while a trailer suction hopper dredger can earn a rate of Rs9-20 lakh a day depending upon the capacity of the dredger,” said Suresh G. Kewalramani, chairman and managing director of Kandla-based Jaisu Dredging and Shipping Ltd.
State-run Shipping Corporation of India and Gujarat Maritime Board, the maritime regulator of Gujarat, have also announced plans to float dredging ventures.