Indian Shipbuilding - Industrial Products

ShipbuildingA r t i c l eThe Indian shipbuilding and ship repairindustry is set to sail. With a projectedsize of Rs 9,200 crores by 2015(currently in excess of Rs 7,310 crores) andwith a CAGR growth of about eight per, theindustry is facing a world of opportunities.Globally, the industry has been growing at aCAGR of 24 per cent, says the AssociatedChambers of Commerce and Industry of India(Assocham), which means there is a greatdeal of catching up to do for India, that onlyhas a small percentage of the custom.Investment opportunityThe Working Group on Shipping & InlandWater Transport for the 12th Plan hasassessed a fund requirement of Rs 90,519crores for the shipping sector. That includesRs 10,499 crores as gross budgetary support;Rs 2,340.00 crores state government funding;and Rs 77,680 as private investment (internaland external budgetary resources).Indian shipbuilding is focused around the27 shipyards, eight of them in the publicsector (six under the central government andtwo under the state governments) with 19 inthe private sector. Between them they have20 dry docks and 40 slipways with anestimated capacity of 281,200 DWT.The Indian shipbuilders specialize inconstructing offshore vessels but thesize of the dry bulk vessels as againstthe offshore vessels in terms ofcarrying capacity (dwt) being high, theformer vessel category constitutedapproximately 87.5 per cent of theIndian order book. In terms of thenumber of vessels on order, theoffshore and specialized vesselsaccounted for 38.7 per cent of the totalorder book as on February 29, 2012. –CARE RatingPublic sector dominationA major share of this capacity is held bythe public sector yards and only CochinShipyard Limited (1,10,00 dwt) and HindustanShipyard Limited (80,000 dwt) have therequired infrastructure and dock to buildlarge vessels. There are many more privateshipyards that are restricted in terms of thecapacity and size of ships that they can build.Many of them are expanding. The 11th Plandocument (this being the final year of theplan) talked of an investment opportunity of$25 billion by 2011-12 in India's shipping andports sectors because the country woulddouble its ports capacity to over 1,500 MT.Segment-wise, it said, ports would provide a$13.75 billion investment opportunity, whileshipping and inland waterways would providea $ 11.25 billion-investment opportunity. TheMinistry of Shipping awarded seven projectsworth over $387 million, to be developedthrough the public-private partnership (PPP)route. In November 2009, another threeprojects worth $1.66 billion were approved,to be developed through the PPP mode. InJanuary 2010, the Public Private PartnershipAppraisalJuly 2012PURCHASE 131