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In India the shipyards are classified as private sector, public sector and Government owned defence yards. The leading private sector yards are ABG, Bharati, Tebma, Pipavav, L&T and others. Hindustan Shipyard Ltd (HSL) and Cochin Shipyard Ltd. (CSL) are the well established public sector yards, whereas Garden Reach Shipyard (GRSE), Goa Shipyard Ltd. (GSL) and Mazagaon Shipyard are government owned shipyards catering mainly to the Indian Navy.
The Shipping industry is witnessing large scale oversupply. This has led to a large number of ships idling without any firm contract. There is large number of deliveries; however there has been very little increment in the demand. Hence the utilization level of ocean going ships has reduced to all time low, especially Bulk carrier and container ships.
This has also led to lower charter rates leading to lower earning potential for the companies deployed in these trades. Hence due to poor market outlook, most of the shipping companies have shelved their expansion or new acquisition plans. India has witnessed new orders placed by government owned companies. The volume of new building orders is not very large to increase capacity utilisation of Indian shipyards. Still, they are a big hope for the shipbuilding industry of India.Some of the new building activity can be witnessed in specialized ships deployed for inland or river-sea class, ships acquired by ports and smaller ships acquired by Indian Navy and Coast Guard. Indian Shipyards could target to build specialized ships. Majority of orders in these categories are from government, hence having a track record for new building of ships in these categories is very essential. For new shipyards with no track record, having a technology transfer agreement or technology support agreement with a established shipyards is a good option.
Following is the list of ships ordered on Indian Shipyards since 2009. As can be seen in the table most of the orders are from the government agencies.
|Shipyard||Ship Type||No||Customer||Category||INR million||Contract|
|ABG||Cement Carrier||3||Associated Bulk||Private||3,920||2010|
|ABG||Training Ship||2||Indian Navy||Govt||9,900||2011|
|Bharati||Interceptor Boat||15||Coast Guard||Govt||2,860||2009|
|Dempo||RSV Ship||10||Jindal ITF||Private||900||2012|
|Cochin||Buoy Tender||1||DG lighthouse||Govt||130||2012|
|L&T||Interceptor Boat||36||Coast Guard||Govt||9,970||2010|
|L&T||Interceptor Boat||18||Coast Guard||Govt||4,490||2013|
Commercial shipbuilding is still reeling from the tonnage glut in the market. Oversupply effect is likely to continue in market for a few more years, especially in dry bulk, container and tanker segments. Recovery is expected post 2018. Aforesaid reasons are why commercial shipbuilding will not be a lucrative segment in the immediate future. Globally speaking, newbuilding orders are expected to be erratic. Newbuilding orders on national scale have almost dried up. Any new order is most likely to be acquired by the larger players. Under this scenario, it would be rewarding to invest in newbuilding capability for building of Naval and Coast Guard Ships.
The shipbuilding industry, sometimes known as the mother industry, has a huge role to play in the economic development of a country. In the Indian context, demand for shipbuilding originates both from the commercial and government sectors.
Specifically in the government sector, the Indian Navy has seen a constant surge in capital expenditure towards shipbuilding. In FY12 alone, Indian Navy has invested close to $1.5 billion in shipbuilding. Likewise the Indian coast Guard, with expenditures on shipbuilding of more than $120 millionin FY10, also holds significant potential for the shipbuilding industry. Companies looking to harness the potential of growth in shipbuilding need to remain constantly updated on all the developments in this space.
Mantrana provides detailed market research on all aspects of shipbuilding including:
• Research support for shortlisting appropriate shipyards for shipbuilding
• Financial research on shipbuilding, including revenues, costs and profitability
• Research on pricing and availability of materials and components involved in shipbuilding
• Information on government policies and regulations related to shipbuilding
• Research on recent global trends and innovations in shipbuilding