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Essar Shipping orders two bulk carriers from ABG Shipyard

Essar Shipping orders two bulk carriers from ABG Shipyard
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First Published: Wed, Sep 26 2007. 09 32 AM IST

Cruising ahead: The two new supramax carriers from Mumbai-based ABG Shipyard Ltd will cost Rs836 crore
Cruising ahead: The two new supramax carriers from Mumbai-based ABG Shipyard Ltd will cost Rs836 crore
Updated: Wed, Sep 26 2007. 09 32 AM IST
Mumbai: Cyprus-based sea transportation company Essar Shipping & Logistics Ltd, which is a unit of the diversified Essar Global Ltd, will acquire two new supramax ships from Mumbai-based ABG Shipyard Ltd, taking it to a total of such ships to six.
Essar Shipping will pay $35 million (Rs138 crore) each for the two ships and hopes to cash in on rising rates for carrying dry goods as cargo.
Cruising ahead: The two new supramax carriers from Mumbai-based ABG Shipyard Ltd will cost Rs836 crore
As trade and consumption goes up worldwide, so do shipping rates. A Mumbai-based analyst, who does not want to be named, said a supramax ship will fetch as much as $40,000 a day in rental currently, compared with $18,000 per day a year ago. Essar will pay for the carriers from its existing funds.
These bulk carriers, built at an estimated cost of $35 million each, will be delivered between December 2009 and March 2011 to the firm. Supramax ships can carry about 40% more goods than existing carriers.
A supramax ship, which has the same dimensions as other medium-sized ships, is specially designed to carry more. Supramax ships can carry between 50,000 tonnes and 60,000 tonnes of dry cargo such as iron ore, cement, fertilizers, coal and food grains. Currently most of the shipping lines use handymax ships.
Essar Shipping previously had placed an order with ABG Shipyard to build four supramax bulk carriers with a capacity of 54,000 dead-weight tonne (dwt).
“We have placed orders for two more supramax ships as we are working towards certain contracts for carrying coal,” said Sanjay Mehta, chief executive officer of Essar. He said these vessels would be deployed on Asia Pacific and South East Asia routes.
“Supramax vessels are larger than handymax type of ships,” said Rishi Agarwal, managing director of ABG Shipyard, which makes its debut in making supramax ships with the Essar Shipping order. “It is a new concept in dry cargo carriers.”
ABG is setting up a second shipbuilding facility at Dahej in Gujarat in two phases with an investment of about Rs950 crore.
The first phase of the new yard will start operations in April 2008.
Danish shipping giant Clipper Bulk operates supramax carriers. The largest private shipping company in India, Great Eastern Shipping Co. Ltd, also recently signed an agreement with an undisclosed seller to buy a modern supramax dry bulk carrier.
The ship, which would have a capacity of about 52,179 dwt, is expected to join the Great Eastern Shipping’s fleet in a short while.
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First Published: Wed, Sep 26 2007. 09 32 AM IST