The Board of Directors of Shipping Corporation of India (SCI) has taken an in-principle decision to place orders for building two container vessels with the Cochin Shipyard, according to the Chairman and Managing Director, Mr S. Hajara.
This would make Cochin Shipyard Ltd (CSL) the first yard in the country to make a container vessel. Each vessel will have the capacity to carry 3,500 containers.
The decision to place the order with CSL is part of the Government's move to support Indian shipyards to achieve the technical capability to build container ships. The two public sector undertakings – SCI and CSL – will have to negotiate the price and other terms of delivery.
Mr Hajara said the order will be based on market price, which is around $45-50 million now for a 3,500-TEU vessel. For Cochin Shipyard, the order will be a challenge and an opportunity, said a shipping analyst. It is understood that the CSL has started scouting for a foreign yard for technical support.
Container biz
SCI's container operations, which have been making losses in the past few years, made a turnaround in the last fiscal. The division made a profit of Rs 62.46 crore against a loss of Rs 225.09 crore in the previous year.
The company has on order three container vessels of 6,500 TEUS each with a South Korean yard.
Q4 loss
SCI has suffered a net loss of Rs 6.17 crore in the fourth quarter ended March 31, 2011, against a Rs 135 crore profit in the same period in the previous year.
This is after several quarters that SCI had reported a loss.
Dividend
According to Mr Hajara, the marginal loss was on account of higher provisions made during the quarter. Bunker costs have also gone up substantially.
For the full year, the company has reported a profit of Rs 573 crore, up by 50 per cent over Rs 376.91 crore in the previous year.
The Board has recommended a dividend of Rs 2.50 a share, in addition to the interim dividend of Rs 3 a share paid during the year.
Tanker market
Addressing a press conference after the board meeting, Mr Hajara said 2011 was a trying year for the bulk and tanker segments, but with a judicious mix of time and sport charters, the company has managed to ride the uncertain market conditions.
The tanker market is expected to remain subdued till the year-end and the early part of the next year due to supply pressure, said Mr Hajara.
ECB plan
SCI, which has a capex of over $1 billion for the current year, plans to raise $ 500-600 million through external commercial borrowing.
In the current fiscal, SCI expects to add 17 ships, including six handymax and two superamax bulk carriers.
The company wants to increase its exposure in the offshore segment; it will add nine more vessels this fiscal, Mr Hajara said.