Vivus Global to invest `15,000 cr in shipbuilding facility3 min read . Updated: 26 Mar 2014, 01:18 AM IST
The new shipyard will be designed to deliver 32 ocean-going ships in a year and will be spread across 1,200 acres
Bangalore: Vivus Global Australia Pty Ltd, an investments and projects company, will invest ₹ 15,000 crore to erect a shipbuilding facility along the Konkan coast in Maharashtra at a time when the shipping industry is recovering from the worst glut in decades after a boom in ship orders coincided with the global financial crisis in 2008.
Sydney-based Vivus Global will invest in the shipyard in Ratnagiri district that is to be built by its unit Rajapur Shipyards Pvt. Ltd. The new shipyard has received orders for building 16 ships of different capacities and types worth $1.4 billion, R. Balasubramaniam, managing director of Rajapur Shipyards, said in a telephone interview
In February, Vivus Global had acquired Rajapur Shipyards, an entity that had all the necessary government permits, including the key environment and coastal regulation zone (CRZ) clearances, to set up the shipbuilding facility. The value of the transaction was not disclosed.
Rajapur Shipyards was founded by Balasubramaniam, a former Indian Navy officer, and Tushar Mehendale, managing director of Pune-based ElectroMech Material Handling Systems (India) Pvt. Ltd.
The project, set to be one of India’s largest infrastructure projects, will be funded entirely through foreign direct investments (FDIs) by Vivus Global. The site where the shipyard is located has a water depth of 16.4 metres, making it the deepest such facility in the country.
The shipyard, designed to deliver 32 large ocean-going ships in a year, will be spread across 1,200 acres. The facility is expected to be ready in 24-28 months.
Vivus Global will also build a township at Rajapur on 450 acres with schools, hospitals, hotels and guest house facilities to cater to some 5,000 families employed at the yard.
“Rajapur is a virgin territory, barren land. Other than Alphonso mangoes, there is nothing," Balasubramaniam said.
“Vivus Global has organized the orders for 16 ships that include oil super tankers, capesize ships, aframax ships, suezmax ships and chemical carriers," Balasubramaniam said.
“The identity of the fleet-owner who has ordered the 16 ships cannot be revealed at this point. It’s a single owner for a block of 16 ships. The shipbuilding contracts were signed last week, along with eight separate agreements for various infrastructure contracts to build the yard," he said.
The investment in a new shipyard in India comes at a time when most of the local shipbuilders are struggling for orders following the 2008 downturn and are surviving on government-funded naval contracts.
Vivus Global, promoted by S. Ramesh Saligrama, E. Selvam and Anand Ganeshan, with interests in mining and international cross-border finance, leveraged buyouts and equity investments in global companies, is moving into infrastructure development.
“Instead of financing someone else, they are financing themselves," Balasubramaniam said.
The project is the first such in India to be implemented on such a huge scale. “We are executing the project on a so-called concurrent engineering model wherein the construction of the shipyard and the ships will be done on parallel tracks. This means, the day the shipbuilding facility is ready, the first of the ships will be getting ready for delivery," Balasubramaniam said.
The Rajapur yard will focus on three major segments—commercial ships, naval ships and oil drilling rigs capable of operating in deep waters. “We have hired 600 engineers of all discipline through campus selection," he said.
“India is not in the big league of shipbuilding nations. Our capability is limited to building smaller ships. Our aim is to reverse that trend. We plan to set up two yards each on the east and west coasts of the country," Balasubramaniam added.