Logistics

JSW Infrastructure to buy 14 more mini-bulk carriers for $126 million

P Manoj Mumbai | Updated on October 11, 2019 Published on October 11, 2019

Looks to boost coastal/IWT play to cut logistics costs

 

Sajjan Jindal-led JSW Infrastructure Ltd will buy as much as 14 more mini-bulk carriers that can move seamlessly along sea and river carrying cargo between its Jaigarh and Dharamtar ports for the captive use of the group’s steel mill and the upcoming cement plant at Dolvi located along the Amba river in Maharashtra.

The steel-maker previously ordered 18 such ships, each with a capacity to carry 8,000 tonnes at Chinese, Indian and Bangladeshi yards. Out of this, two vessels built at Bangladesh’s Western Marine Shipyard Ltd were delivered to JSW.

Cochin Shipyard Ltd is constructing four mini-bulk carriers for Utkarsh Advisory Services Private Limited, part of JSW group. The balance 12 ships are under construction at a Chinese yard.

“We would be ordering another 14 ships of 6,000-tonne capacity each, most likely from China and a few of them would be built at Cochin Shipyard,” Pranab Jha, vice president, shipping, JSW Steel Ltd told BusinessLine.

At about $9 million per vessel, the total acquisition cost for the 14 ships would be about $126 million.

JSW is looking to tap India’s coastal shipping and inland waterways in a big way to ferry cargo and cut logistics costs. The seaport at Jaigarh in Ratnagiri district and the riverine facility at Dharamtar in Raigad district are both run by JSW Infrastructure, a unit of Sajjan Jindal-led O P Jindal Group.

"About 30 ships would be for captive use; if required I can always play around," Jha said.

JSW, according to Jha, ordered four ships at Cochin Shipyard, to support the Make in India programme of the government.

But, the higher prices quoted by other Indian yards and the timeline for construction led JSW to order most of the ships in the first lot of 18 vessels at the Chinese yard.

Even after the government-funded financial assistance scheme available to local yards, still it is pricier to build at Indian yards and more time taking, Jha said.

“Time is very critical for me. We are not a shipping company; we are a service provider for steel. The steel plant is getting ready next year by April and I require the ships by that time,” Jha said.

JSW was keen to order “more ships” from Cochin Shipyard than the four it has already placed at the state-owned yard in the first round.

“I have a time frame, whatever they deliver in that time frame I can order,” he said.

“Indian yards were quoting absurd prices to build the ships even though most of the shipbuilding capacity in the country were idling due to lack of orders,” he said.

“I told them, we are a steel manufacturer, we will give you steel, yet they were not competitive on price. One prominent Indian yard quoted 30% plus more than the Chinese yard. Which commercial organisation would like to exceed the budget. We even met the managing director of that yard because we were keen to promote Make in India. Yet, it did not work out,”, Jha added.

 

Published on October 11, 2019
  1. Comments will be moderated by The Hindu Business Line editorial team.
  2. Comments that are abusive, personal, incendiary or irrelevant cannot be published.
  3. Please write complete sentences. Do not type comments in all capital letters, or in all lower case letters, or using abbreviated text. (example: u cannot substitute for you, d is not 'the', n is not 'and').
  4. We may remove hyperlinks within comments.
  5. Please use a genuine email ID and provide your name, to avoid rejection.