Date:17/06/2006 URL: http://www.thehindubusinessline.com/2006/06/17/stories/2006061704190700.htm

Back SCI to adopt new vessel acquisition policy

Our Bureau

Changes tack to go in for purchase of used ships

Shipping Plans
SCI looks to diversify into rail container sector.
It intends to become a full logistic service provider.
It signs joint venture agreement to operate chemical tankers.

Mumbai , June 16

Armed with a huge cash reserves of Rs 2,300 crore and a low debt equity ratio of 0.3, Shipping Corporation of India, has decided to adopt a new ship acquisition and investment policy.

To begin with, the Government-owned company has decided to go in for purchase of used ships.

The policy, so far has been to go in for only new ships, except on rare occasions under the Government instructions.

Rail container

The company also wants to diversify into rail container sector, which was hitherto monopolised by Concor and recently thrown open to private operators.

From here, the shipping line intends to become a full logistic service provider by operating container terminals and CFS.

In another significant initiative, SCI is planning to look beyond Japanese and Korean Shipyards, which it has been patronising for its new acquisition.

Now, it plans to scout around in China for yards to place orders for two container ships.

Chinese Shipyards

This is the first time that the Government-owned company is looking at Chinese shipyards.

At the current price, the investment for the two 4,300 TEUs (20-foot equivalent units)-each vessels would be in the range of $120 million-130 million and the Chinese yards are considered cheaper than Koreans and Japanese.

Since most shipyards in the world are fully booked until 2009, SCI is also looking for resale of ships either under construction or just completed.

SCI also has plans to go for another two container ships of 5,000 TEUs each as part of its overall acquisition plans of 35 ships.

Joint Venture

Addressing a press conference here, Mr S. Hajara, Chairman and Managing Director, said the SCI and Forbes Gokak Group signed a shareholder agreement to form a joint venture company to operate chemical tankers. Initially, the joint venture will acquire four chemicals tankers.

The company will also increase its focus on offshore services, especially at the higher end by acquiring new offshore supply vessels.