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INDIAN SHIPPING

SCENARIO

CURRENT TRENDS AND FUTURE PLANS

BY
AKHIL PAREKH (12066)
ANKIT AGARWAL (12070)
NIKHIL AHUJA (12096)
VARUN PREET UPPAL (12110)
VISHAL MALHOTRA (12112)
INDIA
KEY AREAS OF ANALYSIS
 Indian Shipbuilding Industry
Profile of major shipyards in India
 Product range catered to by shipyards in India
 Upcoming shipyards in India
 Statistics related to investment, expansion plans, new upcoming
projects, etc in the Indian Shipbuilding Industry
 Infrastructure details of upcoming Shipyards in India
 Key selling points of Shipyards in India
 Future outlook of shipbuilding industry in India
 Independent assessment and recommendation about shipyards in
India
 Critical issues and problems related to Indian Shipbuilding Industry
PLAN CONTD.
 Market Assessment for Shipyard
 Macro study of Shipping and identification of target segment for
shipyard
 Demand supply Scenario for ships
 Charter rates assessment and its impact on Shipbuilding Industry
 Site Selection for Setting up new shipyard
 Infrastructure Required for Shipyard Planning of equipments and
Machinery for Shipyard
 Project Scheduling & Planning
 Shipyard Consultant on Regulatory Matters
 List of Permission required for setting up shipyard
 Classification & Statutory requirements for shipbuilding
 Subsidy Issues in Indian Shipbuilding
PLAN CONTD.
Risk Assessment in the Indian Shipbuilding Industry

Assessment of risk associated with establishment like


 Competition in the Indian Shipbuilding market
 Longer lead time for Indian Shipyards
 Technical Risk associated with Indian Shipyards
 Liquidated Damage due to delay or failing to meet performance guarantee
 Design & Engineering risks with the Indian Shipbuilding Industry Supply chain
management & Project execution risks in Indian Shipbuilding Industry

Financial Study
 Capital Expenditure required for setting up a Greenfield Shipyard in India
 Phasing of investment
 Operational Expenditure in Indian Shipbuilding Industry
 Revenue projections based on market and capability of Shipyard
 Equity Required (how much & when)
 Financing options, Sources, Debt/Equity ratio etc.
 Break-even analysis & ROI
GROWTH PATTERN – INDIAN
SHIPPING
P ER IO D C O A ST A L O V ER SE A S IND IA N TOTAL W ORLD
SH IP S M G T SH IP S M G T SH IP S M GT MGT
1997-98 234 0.643 244 6.200 478 6.843 439.0
1998-99 250 0.656 240 6.212 490 6.868 444.1
1999-00 273 0.682 240 6.231 513 6.913 449.4
2000-01 316 0.697 230 6.119 546 6.817 475.2
2001-02 336 0.734 224 6.087 560 6.821 487.0
2002-03 425 0.805 191 5.372 616 6.178 503.0
2003-04 436 0.808 203 6.136 639 6.944 533.3
2004-05 458 0.811 228 7.202 686 8.013 546.6
C AG R
Last 7 yrs 10.07% 3.37% -0.96% 2.16% 5.30% 2.28%
Last 2 yrs 3.81% 0.33% 9.26% 15.79% 5.53% 13.89%

Based on: Tonnage statement, Government of


India
SIZE OF THE INDUSTRY
(RECENT TRENDS)
• Number of ships increased from 850 to 912 as on Jan 01, 2009

• Shipping tonnage increased from 9.03 million GT in 2007-end to


barely 9.3
million GT towards 2008-end

• The present average age of Indian ships is 18.3 years, as against


18 years last year.

7
INDIA’S FOREIGN-GOING
FLEET

Others Crude
Gas Oil
13%
Carriers Carriers
5% 24%

Product
Bulk
Tankers
Carriers
20%
38%

215 Foreign-Going vessels


82 bulk carriers (38%)
51 crude carriers (24%)
44 product tankers (20%)
11 gas carriers at (5%) and
27 Others (13%). Based on: Tonnage statement, Government of
India
MARKET SHARE (SALES)

Figures as on 31st march 2009

9
MARKET CAP

10
NET PROFIT

Figures as on 31st march 2009

11
KEY PLAYERS IN INDIAN
SHIPPING
Company Turnover No. of ships owned DWT
(2006-07)
Million Euro
Shipping Corporation of India 628 83 owned (in addition, 4.62 million (Plus
Ltd. (SCI) 53 ships are managed 68,000 DWT of other
and manned) manned vessels)

The Great Eastern Shipping Co. 380 42 3.02 million


Ltd.
The Great Offshore (newly Turnover for 2004-05 31 43,000 tons
formed through de-merging) merged with Great
Eastern Shipping

Mercator Shipping 49 13 (Excluding Barges) 1.34 million (Plus 6,500


tons of barge tonnage)

Varun Shipping 46 16 0.54 million


Essar Shipping 157 30 1.65 million
FUTURE PLANS -
SHIPOWNERS
Company Vessel types Future plans

Shipping Crude oil Tankers,  Expansion, modernization & diversification


Corporation of Product Tankers, of its fleet (US$ 1.0 billion investment
India Ltd. (SCI) Chemical Tankers, Gas approved by Indian Government)
Carrier, Bulk Carrier,  Exploring setting up of Joint Venture
Liner Ships, companies
OSVs,Passenger-cum-  One Crude oil Tanker on order list, being
Cargo Vessels built at Hyundai, Korea, delivery scheduled at
the end 2005
Essar Shipping VLCC, Suezmax carriers,  Focusing on refining & marketing
Product Tankers, Dry  To cover the entire value chain from oil
bulk carriers, Mini bulk terminal to international logistic
carriers, Tugs  Development of Vadinar Terminalling
Facility with Crude oil tankage cap. of 5.79
mill. Tankage cap. Of 6.81 mill. Barrels.
Annual throughput capacity of 200 mill.
Barrels
 Plans to emphasize more on Integrated
coastal trade & transport
FUTURE PLANS -
SHIPOWNERS

The Great Crude oil Carrier,  Five Product Carriers (Medium Range)
Eastern Product Carrier, Gas expected to be delivered by mid 2007
Shipping Co. Carrier, Bulk Carrier  Embarking upon plans for expansion,
Ltd. modernization & diversification of its fleet

The Great PSVs, AHTS, AHT, DSVs,  Capitalizing on global opportunity in


Offshore Harbour Tugs, Exploration & Production sector
Const.Barges, Drilling  Takeover of three new AHTSVs and two
Units PSVs
FUTURE PLANS -
SHIPOWNERS
Mercator Tankers, Bulk Carrier,  New takeover from Klaveness Shipping
Shipping Barges Norway for nine bulk carrier worth $400 m by
Dec 2005
 Eyeing on 10% of Indian bulk market

Varun Shipping Tankers, Gas Carriers,  Replacement of ageing tonnage & selection,
Bulk Carrier, AHTS training of skilled seafarer
 Adding of more vessels
 Planning to invest Rs. 1,000 cores in the
current financial year
 Company with Exmar group of Belgium &
IOC bid for LNG Tanker against tender floated
by Petronet LNG. If accepted the partners will
jointly float a new company in India & operate
the LNG tanker on charter for 25 years
ANALYSIS OF CURRENT
SHIPBUILDING ACTIVITY
IN INDIA
INDIAN SHIPBUILDING
CAPABILITIES
 14 medium to small shipyards

 These have 11 dry docks and 26 slipways.

 Only HSL and CSL capable of larger sized shipbuilding

17
COCHIN SHIPYARD LTD.,
COCHIN
 Most modern and the largest shipyard in India, CSL is capable of
building ships up to about 125,000 DWT.

 Established in 1972 under technical collaboration with Mitsubishi


Heavy Industries of Japan.

 Located over an area of 190 acres, and has two dry docks and
three quays. The new construction dock is 255 m. long by 43 m.
wide. The repair dock is 270 m. long by 45 m. wide. The facility has
the largest hull fabrication shop in India, covering over 300,000
square feet of area.

 CSL constructed double-hull tankers, bulk carriers, passenger


vessels, tugs and defence ships. The yard is currently engaged in
the prestigious project of building India’s first indigenous aircraft
carrier.
HINDUSTAN SHIPYARD LTD.
VISHAKAPATNAM
•Established initially under the private sector in 1941 and
nationalised in 1961, HSL is the oldest and one of the two large
commercial shipyards.

•The yard has constructed a wide range of merchant vessels from


bulk carriers to passenger vessels, OSVs, and drilling platforms.

•The yard facilities include three slipways, a covered building dock,


wet-basin, outfit and engineering shops, etc. HSL can build ships up
to 50,000 DWT in covered building dock.

•The shipyard has a workforce of about 3,000 with capability to


process about 1,000-1,200 tonnes of steel per month.
ABG SHIPYARD, SURAT
 Within15 years, the company has emerged as the largest private sector
shipbuilding yard in India.
 The Yard has Multiple Building Berths, 2 Dry-docks, 125 m x 22.5 m x 5.6 m Fitted
with Computerised Synchronous Ship Lift Platform, of 4500 Tonnes Lifting
Capacity and 155 m X 30 m x 7.5 m, Graving Dry Dock served by 80-T Goliath
Crane span 50 m, height 35 m.
 The Shipyard has delivered 88 Vessels including Interceptor Boats, Self-loading
and Discharging Bulk Cement Carriers, Floating Cranes, Tugs, Split Barges, Bulk
Carriers, Newsprint Carriers, OSVs, DP Ships, AHTS, MSVs, DSVs, etc. for
customers in India and abroad.
 The ABG Shipyard plans to make several changes to their layout to increase the
ship building capacity.
 ABG is also constructing a large new yard near Dahej (nearly 200 km from Surat).
BHARATI SHIPYARD LTD.

 Bharati Shipyard is the second largest shipyard in the private


sector. It has two shipyards – both in the state of Maharashtra –
at Ratnagiri and Ghodbunder.
 In addition, the company has entered into a Memorandum of
Understanding (MoU) with Pinky Shipyard Private Limited (PSPL) -
a Goa based company for acquiring it.
 Bharati shipyard has built tankers, dredgers, special purpose
vessels, passenger vessels, tugs, offshore vessels and cargo
ships.
 The company has envisaged expansion and modernization of its
Ratnagiri shipyard at an estimated cost of Rs. 650 million
TURNOVER FROM
SHIPBUILDING

Turnover Figures of Major Indian Shipyards (from Shipbuilding)


CSL HSL ABG Bharati Linear (ABG) Linear (Bharati)

4000

3000
Rs. Millions

2000

1000

0
2000-01 2001-02 2002-03 2003-04 2004-05

CSL 1444 1193 2352 2284


HSL 667 932 472 399
ABG 857 485 2145 2743 2962
Bharati 881 594 611 1217 1926
EXPORTS FROM INDIAN
YARDS

45
40
35

No. of vessels
30
25 Export
20 Domestic
15
10
5
0
2005 2006 2007