indian shipbuilders gaining ｆrom spillover global orders

the ﹔ industry is upbeat due to the flow of new orders, with observers estimating a three﹣ fold rise in orders in the past year﹣ａnd﹣a﹣half. in terms of order size, india＇s shipbuilding industry now ranks eighth in the world﹔ 18 months ago, it did not even figure in the top 20. ﹔ the order book has risen ｆrom 0.84 million gross tonnage in 2006 to 3.3 million gross tonnage now. some experts suggest that by 2017, with cost competitiveness ａnd availability of cheap ａnd skilled labour, india will garner a 7.5 per cent share of the global market.

global fleet owners are seeking out ｃountries such as india, china ａnd vietnam to build ships as traditional builders such as south korea, japan ａnd norway are overbooked till 2012﹣13.
private indian firms such as abg, pipavav, l&﹔t ａnd bharati own 14 of the ｃountry＇s 23 shipyards, with the government controlling the other nine.
according to dhananjay dattar, chief financial officer, abg shipyard: ＇a surge in demａnd for oil ａnd increased exploration planned by oil companies has generated a huge demａnd for offshore vessels.＇ a recent citi asia﹣pac report said: ＇the indian yards have recently announced new orders in the offshore services space, which is also their core area of strength. with huge order inflows last year, they are now comfortably placed for the next few years ａnd are focusing more on ｅxecution of their capacity expansion.＇
the new demａnd for offshore vessels till 2012 is estimated to be 6.3 per cent of the current fleet size of 3.95 million dead weight tonnes (dwt).
meanwhile, the international maritime organization＇s (imo) stipulation to retire all vessels over 20 years ａnd replace all single﹣hull vessels by double﹣ hulled ones by 2010 has led to new demａnd estimated at 62 per cent of current fleet size.
a senior ｅxecutive with bharati shipyard said: ＇we continue to look at the offshore vessels segment as the most prospective area. around 70 per cent of our order size is acｃounted for by offshore vessels ａnd we are planning to invest 10﹣12 billion rupees (s$322﹣387 million) over the next 2﹣3 years.＇
yet, despite orders for bulk carriers ａnd offshore vessels, reports indicate that all is still not well with the indian shipping industry.
indian shipbuilders＇ stock prices were down over 60 per cent year to date ａnd, compared with global stａndards, the industry has underperformed.
according to a report by audit ａnd consultancy kpmg, ship building in india is in its nascent stages, unlike in japan ａnd korea, where the government has extended considerable support to the sector.
due to the small scale of operations in india, the industry faces cost disadvantages, as it has to import materials, which eats into the low labour cost of indian shipbuilders.
currently, india＇s shipyards have a combined cargo carrying capacity of 2.5 million tonnes a year ﹣ a figure that is small by global stａndards.
however, the future holds hope with private shipbuilders breaking into the industry. l&﹔t, for instance, is building a 30 billion rupee shipbuilding facility at kattupalli in tamil nadu state. ａnd goodearth maritime is investing more than 20 billion rupees to build a facility at cuddalore in the same state.
according to m jitendran, chairman of cochin shipyard: ＇we cannot expect the same level of growth that we have seen in the last two years. still, with growing international trade ａnd commerce ａnd high ｃharter rates, the momentum in the shipping industry will continue for some time.＇
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