1. Though India has all the ingredients to make a great maritime nation, yet there are impediments to the success of this vision2. India would need a strong Government backing complete with cheaper loans, indirect subsidies and so on
3. India also has a huge opportunity and demand for ship repair
“India has great potential and is blessed with all the favourable characteristics such as low labour costs, technical capability, language supremacy and a lot of cargo. It is predominantly peninsular in nature having a vast coastline of 7, 515 km and 1, 197 islands, and is strategically located on major maritime routes,” according to Mr. Mohit Batra, Regional Manager – Asia Pacific, ABS Nautical Systems.
He, however, felt that though India has all the ingredients to make a great maritime nation, yet there are impediments to the success of this vision. “India has been a late bloomer and this is no secret. China, South Korea and Japan are leading ship building nations and cater to over 85 per cent of the global shipbuilding industry. India and Vietnam are upcoming centres for global ship building,” he informed the delegates during the recently held India Shipping Summit 2012.
“India did make some progress in the last shipping boom and gained from the overflow of global orders. This was not intentional perhaps, but more of incidental. What India needs is to define a strategy of where it wants to be in terms of a maritime nation,” he voiced his concerns. In his opinion, scattered shipyards across the coast trying to build all kinds of vessels will not serve the purpose of boosting India’s image. “What we need is clustered maritime and dynamic ship building hubs that have greater cooperation rather than competition to support the ancillary industry and take advantage from mutual cooperation.”
Citing an example, he said India’s leading ship building company Cochin Shipyard started operations in 1972, the same year Korea’s Hyundai Heavy Industries launched its ship building venture. Forty years later, the Korean company claims a market share of 15 per cent in the global ship building industry, having delivered more than 1,686 ships to 268 ship owners in 48 countries ever since its inception. Cochin Shipyard’s total deliveries, on the other hand, are expected to be 107 by the end of 2012.
“Lower labour cost, availability of skilled workforce together with robust demand in the domestic market and a growing steel industry are certain factors that build up a strong case for ship building sector in India. This also denotes huge scope for private sector and foreign direct investment (FDI) in the shipping industry and the maritime states can develop a composite project on the Public-Private Partnership model,” he mentioned.
To be able to follow the success models of countries like Korea, Japan or China on a global platform, India would need a strong Government backing complete with cheaper loans, indirect subsidies and so on. “Indian shipyards do blame the Government for not helping to provide a level playing field with global competitors. The Indian Government had extended the ship building subsidy scheme from 2002 to 2007 and this coupled with a temporary boom in the industry prevailed, providing an opportunity for India’s order book to increase fourfold – from 0.3 million DWT to nearly 1.3 million DWT. After 2007, the share in new orders has progressively declined. Defence orders, however, are trying to salvage Indian ship building with the opening up of defence sector orders to private shipyards,” Mr. Batra clarified.
He mentioned about the reports that Japanese Mitsubishi Heavy Industries is planning to buy out a major Indian ship building company. If successful, it would be the first acquisition of an Indian ship building firm by a Japanese company. In December last year, MHI signed a licensing agreement with L & T Ship building, and since then, it has been strengthening relations with the Indian firm by dispatching technical experts, accepting trainees and carrying out other projects.
“This type of cooperation with internationally established partners may prove beneficial for both parties. For Indian yards – in terms of enhancing their capabilities and facilitating knowledge transfer, benefiting from international experience and reputation. For foreign yards – increase its price competitiveness, as it will be able to procure construction materials such as steel far cheaper in India than elsewhere, and labour costs will be much lower. Also such mutual strategic partnerships will help expand capabilities for building specialized vessels and new generation economically efficient vessels,” he suggested.
India is currently also looking at increased offshore activities and this will hopefully provide an opportunity for Indian yards which have honed their capabilities to build offshore support vessels in the recent past. “Of course, besides ship building, India also has a huge opportunity and demand for ship repair – the dynamics of which are quite different than that for ship building. But, with India being close to major trade lanes and much activities happening in the offshore sector, there is a good prospect for repair activities,” Mr. Batra concluded.
No comments:
Post a Comment