Cochin Shipyard forges ahead through rough weather

The public sector Cochin Shipyard Ltd is proposing to expand capacity by setting up a ship-lift system at an investment of Rs 500 crore. The new system, to be set up at the northern end of the premises, will be 120 metres long and can accommodate ships of up to 6,000 tonnes. The project is likely to be operational by next year, Commodore K. Subramaniam, Chairman and Managing Director, Cochin Shipyard Ltd, said.

The ship lift facility will ease congestion in the shipyard's drydocks. The yard has two drydocks. One of the docks is being used for the construction of the indigenous aircraft carrier of the Navy and the other is used for shipbuilding and ship repair, he said.

Cochin Shipyard (CSL) also has orders for 34 ships ? 14 offshore platform vessels for domestic and international owners, and 20 fast-patrol vessels for the coast guard, valued at Rs 4,000 crore. Mr Subramaniam said India's first indigenous aircraft carrier was to be floated out December last year. But due to various reasons, the ship will be ready to sail only by this year-end.

Taking a hit

The Commodore pointed out that recession had an impact on the shipyard as it did not receive any orders from 2008 to September 2010. After September 2010, the yard received orders for 24 ships ? out of the 34 orders it has now. The effect of recession will be felt this year and next year. The company had good growth in the last five years, though this situation may change this year and the next. But the company's performance will not be affected, he said.

The yard, said the Managing Director, faces harsh competitive environment. Shipbuilding and ship repair orders are secured on the basis of international, competitive bidding. A disparity in the tax structure with foreign countries make it difficult for Indian yards to survive in this competitive world.

Profit

Referring to the expansion plans, Commodore Subramaniam said the yard is looking at the proposed Vizhinjam International Port project in a big way and the company has already set up a bollard pull test facility there to test the pulling capacity of anchor handling tugs of up to 500 tonnes.

The growth of CSL has been phenomenal as shipbuilding income rose to Rs 1,012 crore in 2009-10 from Rs 222 crore in 2005-06. The turnover has tripled during the same period. The net profit increased by 12 times during the period to touch Rs 223 crore.

The authorised capital and paid-up capital of the company is Rs 250 crore and Rs 192 crore respectively as of today.

The yard has reached full capacity utilisation in the last few years. In order to sustain the growth rates, the company needs to invest immediately in new facilities and to continually innovate, he said.

The vision is to emerge as a leading shipbuilding and ship-repair yard globally. CSL has been diversifying into construction and repairs over the last few years. It has completed two major ship conversion projects ? one for a Singapore-based owner and the other for National Institute for Oceanography, Goa.

The former order was for a conversion of a fishing vessel to a research ship and the latter was for conversion of a fishing vessel to a seismic survey vessel.

The main factors for CSL achieving stellar performance in the last five years was the adoption of the right product mix, catering to an international clientele and entering the Defence sector by taking up the prestigious aircraft carrier project.

Products in shipbuilding range from double hull tankers, bulk carriers to port crafts, offshore supply vessels, passenger ships, dredgers and tugs.

The yard moved into the international market in a modest way by building a barge for National Petroleum Construction Company, Abu Dhabi, in 2002. Since then, CSL has built and delivered 35 ships for owners in Bahamas, Norway, the Netherlands, Greece, the US and Saudi Arabia.

Repair expertise

The company entered into the ship repair business in 1982. It has gained expertise in complex and sophisticated repairs to various types of ships.

The company's main clients in ship repair are ONGC, Indian Navy, Coast Guard, SCI and Lakshadweep Administration.

CSL is one of the modern shipyards in India. With two drydocks ? 255x43x9 m and 270x45x12 m ? it is one among the very few yards that can build up to 1,10,000 DWT and repair vessels up to 1,25,000 DWT.

At present, only CSL is capable of undertaking repairs and maintenance of large vessels of Indian Navy such as the INS Viraat . The company has also undertaken repairs and upgrade work of ONGC's jack-up rigs and mobile offshore drilling unit ships, which are of strategic importance.

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