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Meltdown: Little impact on Indian shipyards

Source: PTI
December 17, 2008 16:15 IST
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Global economic meltdown had very little impact on Indian shipyards whose order book is intact unlike the major shipbuilding countries like South Korea, China and Japan accounting for 84 per cent of the global market.

"Despite the global economy not doing well and slowdown in certain sectors, Indian shipbuilding yards have not seen great impact," ABG Shipyard CFO Dhananjay Datar told PTI.

The global credit crisis has affected Korean and Chinese shipyards, which are seeing order cancellation in dry bulk and wet bulk carriers, he said.

The company has Rs 11,400 crore (Rs 114 billion) worth of orders to build 105 ships.

It is building 66 offshore supply vessels and 39 bulk carriers. ABG Shipyard is the largest private shipyard in the country.

Many of ABG's clients are foreigners. "We are not taking any new orders for bulk carriers as our capacity is full till 2013," he said.

However, it is in talks with clients for orders on offshore supply vessels. "Enquiry on offshore vessels is good. We are talking to couple of people for new orders," he said.

Hindustan Shipyard, which handles both government and private clients, has not not seen any order cancellations, a top official of the company said.

It has on order to build 10 bulk carriers and five patrol vessels for Coast Guard.

Similarly other shipyards such as Larsen and Toubro and Cochin's order books are intact.

The main reason for non-cancellation of orders with Indian shipyards are because many of them are into building of specialised vessels such as offshore supply vessels and semi submersibles used in the energy sector.

"The demand for offshore supply vessels has not declined," Care Research Head Revati Kasture said.

L&T is building 10 special vessels, including semi-submersibles. Cochin Shipyard has on order to build 19 offshore supply vessels.

"Our clients are cross-continental players and they are not affected by the global slowdown," an official of Cochin Shipard said.

Globally wet bulk and dry bulk carriers are facing order cancellation because of decline in cargo demand, Kasture said.

"Even new bookings are facing a slowdown in South Korea, China and Japanese shipyards," she said.

A study on shipbuilding industry released by Care Research recently warns that Indian shipbuilders may face hardships in the near future because global trade volumes may witness a considerable decline.

Globally, South Korea, China and Japan are the three largest shipbuilding nations in the given order and they have maintained their leadership positions accounting for 83.4 per cent of the global order books as on July 31.

The Indian shipbuilding industry has a marketshare of 1.24 per cent of the global order.

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