Shipping Corp to invest $4 bn to double tonnage capacity

Shipping Corp to invest $4 bn to double tonnage capacity
PTI
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First Published: Sun, Sep 12 2010. 01 56 PM IST
Updated: Sun, Sep 12 2010. 01 56 PM IST
Mumbai: State-owned Shipping Corporation of India (SCI) will invest up to $4 billion (nearly Rs18,800 crore) in the next four years to double its total cargo carrying capacity to 10 million dead weight tonnage, a top company official said.
“Going forward, in the next three-four years our overall spend will be about USD 4 billion,” SCI chairman and managing director S Hajara told PTI here.
Through the investment, SCI is targeting to double its tonnage capacity to 10 million DWT from the current 5 million, he added.
“It will be six million in a year’s time and around eight million tonnes in the next three years and we hope to lay the chart for 10 million in the next five years, double of what we are today,” Hajara said.
Overall for the shipping industry, things will “really improve” after calendar year 2011, till when there will be a lot of supply-side pressure because of an excess number of orders made between 2004-08, he said.
“That pressure will be coming-off as there were very few orders placed between mid-2008 and 2009. So we will have some respite beyond 2011.”
SCI recently announced a follow-on public offer, which will see the government divesting more and Hajara was quoted as saying that the proceeds will be used to fund its expansion plans.
The company, which owns and operates about 35% of Indian tonnage, is also serious about backward integration and has recently called expression of interests from private shipyards for purchasing a stake, Hajara said.
“We would like to have a stake in a shipyard...and the proposals will come in by early October. After that, there will be due diligence for all the projects and we will see which suits us,” he said.
“By March (2011) or a little later” SCI will be working with a shipyard,” Hajara said.
There has been a “remarkable recovery” in the container liner vertical this fiscal, which has resulted in the company coming back into the black in the June quarter, he said.
Hajara sounded concerned about the bulk carrier segment, saying the market is “topsy-turvy” because of over- supply and chances of revival are grim till the end of calendar year 2011. As for tankers, it is more steady and will continue that way, he added.
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First Published: Sun, Sep 12 2010. 01 56 PM IST