Indian Shipbuilding Yard

In India the shipyards are classified as private sector, public sector and Government owned defence yards. The leading private sector yards are ABG, Bharati, Tebma, Pipavav, L&T and others. Hindustan Shipyard Ltd (HSL) and Cochin Shipyard Ltd. (CSL) are the well established public sector yards, whereas Garden Reach Shipyard (GRSE), Goa Shipyard Ltd. (GSL) and Mazagaon Shipyard are government owned shipyards catering mainly to the Indian Navy.

The Shipping industry is witnessing large scale oversupply. This has led to a large number of ships idling without any firm contract. There is large number of deliveries; however there has been very little increment in the demand. Hence the utilization level of ocean going ships has reduced to all time low, especially Bulk carrier and container ships.

This has also led to lower charter rates leading to lower earning potential for the companies deployed in these trades. Hence due to poor market outlook, most of the shipping companies have shelved their expansion or new acquisition plans. India has witnessed new orders placed by government owned companies. The volume of new building orders is not very large to increase capacity utilisation of Indian shipyards. Still, they are a big hope for the shipbuilding industry of India. 

Some of the new building activity can be witnessed in specialized ships deployed for inland or river-sea class, ships acquired by ports and smaller ships acquired by Indian Navy and Coast Guard. Indian Shipyards could target to build specialized ships. Majority of orders in these categories are from government, hence having a track record for new building of ships in these categories is very essential. For new shipyards with no track record, having a technology transfer agreement or technology support agreement with a established shipyards is a good option. 

Following is the list of ships ordered on Indian Shipyards since 2009. As can be seen in the table most of the orders are from the government agencies.

Shipyard Ship Type No Customer Category INR million Contract
ABG DSV 1 Halul Offshore Private 3,320 2010
ABG AHTSV 1 Marnavi Spa Private 860 2010
ABG Cement Carrier 3 Associated Bulk Private 3,920 2010
ABG Training Ship 2 Indian Navy Govt 9,900 2011
ABG AHTS 6 SCI Govt 5,120 2012
Bharati Interceptor Boat 15 Coast Guard Govt 2,860 2009
Cochin FPV 20 Coast Guard Govt 15,350 2010
Cochin AHTSV 2 Coast Guard Govt 2,460 2011
Dempo RSV Ship 10 Jindal ITF Private 900 2012
Cochin Buoy Tender 1 DG lighthouse Govt 130 2012
L&T Interceptor Boat 36 Coast Guard Govt 9,970 2010
L&T OSV 4 Halul Offshore Private 4,920 2012
L&T Interceptor Boat 18 Coast Guard Govt 4,490 2013
Pipavav OSV 12 ONGC Govt 5,250 2009
Pipavav NOPV 5 Indian Navy Govt 26,590 2010
Pipavav NOPV 2 Unkown Private 12,160 2012
Total         108,210  

Commercial shipbuilding is still reeling from the tonnage glut in the market. Oversupply effect is likely to continue in market for a few more years, especially in dry bulk, container and tanker segments. Recovery is expected post 2018. Aforesaid reasons are why commercial shipbuilding will not be a lucrative segment in the immediate future. Globally speaking, newbuilding orders are expected to be erratic. Newbuilding orders on national scale have almost dried up. Any new order is most likely to be acquired by the larger players. Under this scenario, it would be rewarding to invest in newbuilding capability for building of Naval and Coast Guard Ships.