Financial Daily from THE HINDU group of publications
Tuesday, Apr 11, 2006
Financial Daily from THE HINDU group of publications Tuesday, Apr 11, 2006 |
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Logistics
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Shipping Ministry open to SCI's block approval plan Our Bureau
Buying plans The public sector unit has been seeking a block approval for its vessel acquisition programme for quite some time now. The assets acquired would be used over about 20 years.
BIGWIGS MEET:(From left)The Lemuir Group Managing Director, Mr Snehal Parikh; the Safexpress Chairman and Managing Director, Mr Pawan Jain; the Neptune Orint Lines group President and CEO, Mr David Lim, and the Shipping Corpotion of India Chairman and Managing Director, Mr S.C. Hajara, at the "India Cargo Summit" in the Capital on Monday. — Kamal Narang
New Delhi , April 10 The Finance Ministry is receptive to Shipping Corporation of India's (SCI) proposal for a block approval for acquisition purposes, Mr S.C. Hajara, Chairman and Managing Director, SCI, told presspersons here on Monday. The public sector unit has been seeking a block approval for its vessel acquisition programme for quite some time now. He said SCI was in discussion with the Finance Ministry on the issue. "We are in touch with the Finance Ministry. The Ministry is quite receptive to the proposal," he told presspersons on the sidelines of the India Cargo Summit organised by the CII.
High capital cost
However, he also added that since ship prices were ruling so high worldwide, it would not be a great idea to place all orders during this time as this would drive up capital costs. "The assets acquired would be used over about 20 years. Thus, the high capital cost element also needs to be kept in mind," Mr Hajara opined. On the softening shipping freight rates, he said, "shipping industry does witness cyclical phases — so the prices are likely to soften in 2006-07. They should go up 2008-onwards."
Profit margins
On whether the corporation's profit margins would be affected with the softening of prices and if so, when the impact is likely to be seen, he declined to comment anything specific. Mr Hajara, however, later said, "Profit margins are bound to come down if freight rates come down."
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