Tatas to Look at Shipbuilding
Thursday, October 04, 2007
The Tata group is looking at the possibility of entering the shipbuilding business even as India looks to boost its shipbuilding capabilities to meet growing global demand for cargo carrying ships.
The Tata group has shown interest in building a shipyard near Shivrajpur in Gujarat after the state government invited expressions of interest from private firms, according to a senior Gujarat government official.
The group, which makes everything from salt to cars, is conducting a feasibility study on the project, said people familiar with the matter who did not wish to be identified.
Tata Steel Ltd makes steel, a key input for constructing ships. In December 2006, the company signed an agreement to set up a 50:50 joint venture with Japanese transportation firm Nippon Yusen Kabushiki Kaisha (NYK) Line for setting up a shipping company.
Developing a shipbuilding and repair yard would have great advantages for the Tata group given its association with NYK Line that has a fleet of more than 700 ships
Responding to the opportunity for building steel plates with larger width, steel makers such as Essar Steel and Tata Steel are planning to put up plate rolling mills that can make steel plates having a width of more than 2.5 metres.
Typically, for making 10-15 ships in a year, a yard would require close to 70,000 tonnes of steel, and steel makers such as Tata Steel, Essar Steel and Jindal Steel are now eyeing the shipbuilding business because the steel they make can also be utilized for constructing ships at their own yards.
Increasing global economic activity and India’s booming economy have boosted demand for ships to transport cargo. With capacities in traditional shipbuilding nations such as Japan, South Korea and Norway booked for the next few years, global fleet owners have started looking at new destinations such as China, India and Vietnam to build their ships.
India currently has a market share of just 0.5% of the global shipbuilding market.
Indian yards such as ABG Shipyard Ltd., Bharati Shipyard Ltd., Larsen & Toubro, Cochin Shipyard Ltd., Hindustan Shipyard Ltd., Mazagon Dock Ltd. and Tebma Shipyards Ltd. are looking to grab a bigger share of the global market and capture the space vacated by the closure of yards in Europe and other developed countries.
Steel maker JSW is also planning to set up a shipbuilding facility either in Gujarat or in Maharashtra. [Source: http://www.livemint.com]