The Hindu Business Line : L&T will invest Rs 2,000 cr in shipbuilding venture

Yardsticks
Sees little scope for expansion at Hazira (Gujarat) unit.
Recently got a Rs 440-crore order for 4 ships from Rotterdam-based Zadeko.
Plans to build ships for the Navy and Coast Guard as well.

Suresh P. Iyengar

Mumbai, July 5 Infrastructure and engineering conglomerate Larson and Turbo (L&T) will invest between Rs 1,500 crore and Rs 2,000 crore in a new greenfield shipbuilding venture.

“We are looking at the coastline of Tamil Nadu, Andhra Pradesh and Gujarat for setting up the shipbuilding unit and the investment will range from Rs 1,500 to Rs 2,000 crore,” said Mr M.V. Kotwal, Senior Executive Vice-President, heavy engineering, L&T.

L&T has a shipbuilding yard at Hazira in Gujarat. The company is scouting around for a different location as there is little scope for expansion of the Hazira unit. It requires about 1,000 acres along the coastline with adequate depth close to the shore.

The company has recently bagged a Rs 440-crore order from Rotterdam-based Zadeko Ship Management CV to build four ships. Zadeko caters to special purpose cargo movement.

Tapping potential

Confident of making a mark in shipbuilding despite India being a late mover, Mr Kotwal said “the sector itself was opened up for private participation very recently. Japan and Korea lead the shipbuilding industry with market share of 38 per cent and 32 per cent respectively. India has huge potential but it accounts for less than one per cent of the total market share.”

The order for building highly specialised cargo vessels is just a beginning as L&T has plans to build ships for the Navy and Coast Guard. “The L&T shipyard being constructed will have the capability to manufacture any type of ship, including frigates and destroyers for Navy and the Coast Guard,” Mr Kotwal said.

The new shipbuilding unit will have capability to make all types of vessels, including high-tech ones such as CNG, LNG carriers and containers of up to 3 lakh deadweight tonnes (DWT).

Ships for Zadeko

The ships to be built for Zadeko are called RO-RO/LO-LO semi-submersible heavy lift container cargo vessels. Very few of these are made in India. They have a deadweight of over 8,250 tonnes, 17,000 cubic metres of cargo hold, and can carry 830 TEU of containerised cargo.

India has 28 shipbuilding yards and the largest ship built in the country is a 45,000 DWT vessel at the Kochi Shipyard. However, none of the shipyards have capabilities to manufacture hi-tech or sophisticated ones.

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