By Santanu Choudhury/Bloomberg
New Delhi: Shipping Corp. of India Ltd, the nation’s biggest shipping company, plans to buy 60 vessels for $3 billion (Rs 13,269) to meet the rising demand for transporting goods in the world’s second-fastest growing major economy.
The new vessel acquisition plan is in addition to the 12 ships already ordered by the corporation for $1 billion, Sabyasachi Hajara, chairman and managing director of Shipping Corp., said on 14 March.
Indian companies are buying more vessels as economic expansion increases the need to import commodities such as crude oil and coal and to ship cars and textiles to overseas markets. About 90% of India’s trade is done by sea.
“Global trade is increasing and India’s trade is increasing more than global trade,” Hajara said. “Either you expand or you perish.”
India’s economy will probably grow 9.2% in the year ending 31 March, the fastest pace on record. In the past four years, India has averaged 8.6% growth, the quickest expansion since the country’s independence in 1947.
Mumbai-based Shipping Corp. will borrow about $750 million to buy the 12 vessels, Hajara said. He didn’t say how the money will be raised. The 12 vessels will have combined capacity of 1.3 million dead weight tonnes.
Shipping Corp. borrowed $206 million in April from two banks to buy two vessels for carrying crude oil.
“We should be ordering the 60 new vessels over the next four years and delivery will happen over the next six years,” Hajara said. Shipping Corp. has 80 vessels with a capacity of almost 5 million dead weight tonnes, accounting for about 35% of India’s total shipping capacity, he said.