The Hindu Business Line : Jessop to diversify into shipbuilding

POST disinvestments, Jessop & Co Ltd is planning it big. The erstwhile engineering giant, reduced to an ailing dwarf under the nationalised management, is now planning to unleash its core strength in fabrication to diversify into ship building and repairing.

Talking to Business Line, the Chairman, Mr Pawan Ruia, said the company is currently negotiating with the Kolkata Port Trust (KoPT) for taking over a dry dock through a long-term lease arrangement for shipbuilding and repairing.

Parallel discussions are also on for setting up such facilities, preferably in Visakhapatnam, solely dedicated to the Indian Navy.

Stating that the company has already entered into a technical collaboration with Tekhom of Ukraine for making a foray into the shipbuilding and ship repairing, Mr Ruia said that till such time the dry dock facility was available, Jessop would get the requisite work done through its Ukrainian partner.

On whether the foray into ship-building and repairing is a wayward diversification, he said that mechanical fabrication being the core strength of the company, such activities would only be a forward integration.

Known for its expertise in fabrication, Jessop has also inked a technical collaboration deal with Antarakoh of Singapore for construction of jetties and had taken part in construction of a virtual jetty for the KoPT.

On the hydrocarbons sector, the company is gearing up to tap the increasing potential especially in the Mahanadi basin.

"With availability of gas and thrust on exploration, we find increasing business opportunities in this sector," he said.

Meanwhile, Jessop is negotiating a tie-up with a construction major for its crane manufacturing facility in Chennai.

"Jessop has tremendous brand equity in crane manufacturing sector and is one of the few suppliers of the heaviest of the cranes globally. However, we have limited offerings in pockets of the value chain especially those on the movable category. To overcome this deficiency, we are planning a collaboration with an international major."

Negotiations are also on for bagging orders from the Myanmar Government for supply of coaches. The foreign government has already issued a $28 million order for coaches.

For backward integration of its wagon manufacturing business, Jessop is setting up a bogie and coupler plant at Durgapur at an investment of Rs 30 crore. The plant will be located at the company's previously closed facility at Durgapur and will enhance the production rate of wagons, which is currently severely restrained owing to short supply of bogies and couplers from the railway approved suppliers.

Normally, such a plant requires roughly a year and half for commissioning. To cut short the time period, the company is considering several options including import of second-hand machinery.

"We sincerely want to commission the plant in six months so as to manufacture 150 wagons per month beginning next fiscal as against the current production of 50 wagons," Mr Ruia said.

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