Tebma Shipyards to go slow on capacity expansion

The Chennai-headquartered Tebma Shipyards Ltd is going slow on its capacity expansion programme though it is “not affected by economic slowdown”.  Mr P.K. Balan, Chairman, Tebma, told Business Line that the company had plans to set up two shipyards in eastern and western costs. Though offshore vessel building segment is not affected by the slowdown, availability of finance is an issue.
Therefore, the company has decided to “take one step at a time”. It has firmed up plans to build a shipyard at Dahej, Gujarat. The Gujarat Maritime Board has given the company 100 acres.
Currently, the company has steel fabrication facilities at Chengalpattu near Chennai, Malpe near Udupi in Karnataka, Kochi (through joint venture with Cochin Shipyard Ltd) and a leased facility in Kolkata.
Tebma is a closely held company, 53 per cent owned by ICICI Ventures. It expects to close 2008-09 with a turnover of Rs 500 crore against Rs 400 crore last year. Value of orders on hand is about Rs 1,700 crore.
Mr Balan foresees better growth in the first half of this fiscal due to commencement of deliveries. This will help raise loans from banks for the construction of shipyard at latter part of this year.
Subsidy
Tebma can claim about Rs 300 crore as shipbuilding subsidy towards its exports orders. In early 2003, the Ministry of Shipping announced subsidy up to 30 per cent of the contract value for orders received till August 14, 2007.
Tebma secured orders to build 12 vessels under this scheme, and in couple of weeks, it will deliver the first to a Norwegian client. The other 11 will be delivered by the end of 2010.
In addition, the company has orders for 22 vessels from a host of clients, including Inland Waterways, Cochin Port Trust and Indian Navy.
The global market size for offshore vessels is estimated at $10 billion.