ABG Shipyard, three other firms in race to buy Alcock Ashdown

ABG Shipyard, three other firms in race to buy Alcock Ashdown
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First Published: Tue, Jul 24 2007. 01 17 AM IST
Updated: Tue, Jul 24 2007. 01 17 AM IST
Mumbai: India’s biggest private sector shipbuilders ABG Shipyard Ltd, Subhash Projects and Marketing Ltd, Zoom Developers Pvt. Ltd and Helicon Engineering Works are in the race to buy shipbuilding firm Alcock Ashdown (Gujarat) Ltd from the Gujarat government.
All four firms confirmed they have qualified to bid for 100% stake in Alcock Ashdown, which has two shipbuilding and repair facilities in Gujarat, one each in Bhavnagar and Chanch. The four qualified bidders have been asked to submit their price bids by 31 July, an official at one of the four shortlisted firms said. He did not want either himself or his firm to be identified.
According to latest published results, the state-owned shipbuilder ended 2005-06 with a revenue of Rs111.77 crore and a profit of Rs3.54 crore.
Alcock Ashdown was originally owned by a British company. When the firm ran into financial trouble, it was taken over by the Indian government in 1975. Subsequently in 1994, the yard was acquired by the Gujarat government.
Alcock Ashdown, which caters to the lower and middle segment needs of fleet owners, designs and builds seagoing grade steel vessels for various purposes as well as inland and coastal ships and boats in steel or fibre-reinforced plastics (FRP). The firm’s Chanch yard has the largest dry dock on the northwestern coast of India with direct access to the sea.
A dry dock is a narrow basin or vessel that can be flooded to allow a load to be floated in and then drained to allow that load to come to rest on a dry platform. Dry docks are used for the construction, maintenance, and repair of ships, boats and other watercraft.
Their proximity to Mumbai High and the international Gulf-bound shipping routes makes Alcock Ashdown’s shipyards ideal for offshore support, fabrication, ship repair or new construction.
The outfit jetty has a depth of 4.5m and can build multi-purpose cargo and passenger ships of up to 20,000 tonne capacity, platform supply vessels, defence production ships, tugs and barges.
Alcock Ashdown is currently building 30 vessels for various shipowners including eight tankers each with a capacity of 12,800 tonnes, valued at Rs850 crore for Sea Tanker Management Company Ltd based in Norway and Cyprus.
The decision to sell the company is based on the Gujarat government’s desire to exit the shipbuilding business. “We are selling the shipbuilding firm for facilitating further development and growth. The yard has the potential to grow if adequate investments are made to expand its capacity. But shipbuilding is not an area where the government should invest,” said an executive at Alcock Ashdown who did not wish to be identified.
The privatization of Alcock Ashdown comes at a time when there is a boom in the global shipbuilding industry. Global shipowners are building more ships at Indian yards as builders in maritime nations such as South Korea, Japan and China are not accepting orders for building relatively smaller ships.
As a result, Indian shipbuilders such as ABG, Bharati Shipyard Ltd, Cochin Shipyard Ltd, Tebma Shipyards Ltd and Larsen & Toubro are looking to grab a higher share of the global shipbuilding market and capture the market vacated by the closure of yards in Europe and other developed countries. India’s share in global shipbuilding is expected to rise to around 15% or $22 billion (Rs88,600 crore) by 2020 from about 0.4% now, says a report prepared by consultancy firm i-maritime Consultancy Pvt. Ltd.
Local shipbuilders such as ABG, Bharati and L&T are expanding capacities to meet the growing demand for building new ships to carry cargo and replace those that are scrapped globally as per the rules framed by the global shipping regulator, the International Maritime Organization (IMO).
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First Published: Tue, Jul 24 2007. 01 17 AM IST