Private firms to make warships

[Contrarian]

Private firms to make warships

From Kalyan Ray, DH News Service, New Delhi:
Opening its doors, the Centre will allow private ports to manufacture five offshore patrol vessels for the Navy at a cost of Rs 5,000 crore.


The defence acquisition council, headed by Defence Minister A K Antony, approved five OPVs for the Navy last week, which will be procured through the “make” category of the defence procurement policy of 2008 and for the first time Indian Navy is looking at the private sector for meeting its requirements.

In a marked departure from the past, this time the options will not be limited to State-owned dockyards under the defence ministry. Private players are being pursued to bid for the request for proposal (RFP), which is expected in four months.

Three private ship building yards — the Pipavav Shipyard Limited, ABG Shipyard Limited and L&T Shipyard are being scrutinised for building naval vessels.

Last month, Naval Chief Admiral Sureesh Mehta inspected the facilities at Pipavav shipyard, which is in the process of registering itself with the Navy. ABG Shipyard too has built Coast Guard ships in the past.

India’s shipbuilding capability is saturated with shipyards booked to capacity. Still, there is demand for more warships and vessels from the Indian Navy, as large number of old vessels will be scrapped in the next five years. So much so, the defence ministry is also keen on shipbuilding cooperation with South Korea.

The government is left with little options as the order books of all defence ports in Kolkata, Goa, Mumbai and Kochi are full.

Though in the past, a Goa-based company Anderson Marine made a small fast attack craft for Navy and Coast Guard, this is for the first time private players are being lured to make large naval battleships fitted with weapons. To be procured during the 11th and 12th plan periods, the five OPVs are likely to replace some of the aged Sukanya class vessels.

Deccan Herald - Private firms to make warships

 

[Marshal]

Pipavav Shipyard reviewing IPO plan
Mumbai, Sept 30 Pipavav Shipyard, promoted by SKIL Infrastructure, is having second thoughts on going ahead with its proposed $150-million IPO in the wake of the recent tremors on Wall Street that continues to rattle global and Indian markets.

The company, in which Punj Lloyd holds about 24 per cent stake, will be studying the market situation for the next three months before taking a final call on its IPO plans.

“We have not yet shelved our IPO plans, but we are studying the market movements closely. If we go ahead with the IPO, it will happen in the next three months,” Mr Ray Stewart, Chief Executive Officer of Pipavav Shipyard, told Business Line.

OPEN FOR PE


He said in the event of the company not taking up its IPO plans immediately, it will consider other alternatives to raise the money. Without elaborating on the other options, he indicated that there were many investors, both global and Indian, who were willing to invest in the company.

Its present private equity investors include 2i Capital PCC, New York Life Investment Management India Fund, Merrill Lynch International, Deutsche Bank AG and ABN-Amro Asia Merchant Bank.

FUND UTILISATION


The company plans to invest part of the funds to finance its expansion programme that will involve building of more sophisticated and bigger ships. Currently, the shipyard, which became operational recently, builds bulk carriers, with an order book of 22 ships involving a cost of about $1 billion.

“These orders are from foreign ship owners, including 12 from Greek owners and six from Norway,” Mr Stewart said. Pipavav’s present capacity is about 4-6 bulk carriers a year, which will go up to 8-10 later. “Our plan is to mature from bulk carriers to tankers and then to cape size vessels and drill ships,” he said.

OFFSHORE, NAVY FOCUS


The shipyard also plans to have a sharp focus on construction of offshore supply vessels in the light of the booming activities on the offshore oil and gas exploration front. “We are keen on participating in some projects of the ONGC,” according to him.

It is also keen on participating in the Indian Navy’s requirement of vessels. It has sought approval from the Defence Ministry to construct certain categories of ships for the Indian Navy and a Naval team, led by the Chief of Naval Staff, had recently visited the shipyard.

“We expect to get the approval sometime. We will not be involved in building sensitive and sophisticated warships for the navy, but will construct simple ships like cadet training ships and offshore patrol vessels,” he said
The Hindu Business Line : Pipavav Shipyard reviewing IPO plan

 

[nitesh]

He he he good decision. Market sentiments are not good at this time. good to delay the IPO.

 

[Marshal]

More News

Pipavav Shipyard plans to hire Japanese professionals
Chennai, July 8 Pipavav Shipyard plans to hire around 50 Japanese professionals for its upcoming shipyard in Gujarat. This is at the exploratory stage and is at the ‘cost checking stage to do a cost-benefit analysis,’ according to its CEO, Mr Ray Stewart.

It roped in Mr Mikito Shirai, a national of Japan, as Head of Planning and Production Engineering. He was a senior engineer at IHI, one of Japan’s largest shipbuilding companies. There are four senior Japanese managers as well.

The additional 50 Japanese professionals will be mainly working on the shop floor, Mr Stewart said at a maritime seminar organised by the All-India Manufacturing Organisation here on Monday. “We have not decided to do [to hire the Japanese professionals] it yet. If we did, it will purely be a temporary measure to help during the initial phase of production and to assist with training of our permanent staff,” he told Business Line.

Why Japanese and not Korean or Chinese (who are today the largest ship builders in the world)? Mr Stewart said Koreans and Chinese learnt from the Japanese – “so, why not go to the original teachers”. With senior managers from Japan, it is also logical to follow up with Japanese rather than other nationalities, he said.

Name change


Mr Stewart said the name of Pipavav Shipyard may be changed to highlight the bigger strategy of the company than just building ships. The name change is still an “embryonic idea and we have not progressed yet.”

The business strategy is to have four legs to stand on – commercial shipbuilding; ship repair; offshore fabrication; and naval ship new building and repair. The word “shipyard” in the company’s name is, therefore, not entirely appropriate as it does not encompass the varied activities that the company will be involved in, he said.

Shipyard soon


Located on the west coast of India, adjacent to major sea lanes between the Persian Gulf and Asia, the construction of the Rs 2,371-crore Pipavav Shipyard is likely to be completed by October. On completion, the shipyard is expected to have the capacity to build and repair vessels of up to 4 lakh DWT (dead weight tonne).

It will be capable of ship construction and repairs for a range of vessels of different sizes and types, as well as the fabrication and construction of products such as offshore platforms, rigs, jackets and vessels (but excluding sub-sea pipelines) for oil and gas companies.

According to the company’s draft red herring prospectus filed with SEBI, Pipavav Shipyard has agreements with three international ship owners for the construction of 26 Panamax bulk carriers of 74,500 DWT each for delivery from 2009 to May 2012, including options for four ships which have been exercised.
The Hindu Business Line : Pipavav Shipyard plans to hire Japanese professionals