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i-maritime Newsletter

Cochin Shipyard charts course for a hub - 2011-11-07

Public sector unit Cochin Shipyard Ltd, which has entered a crucial phase of growth in commercial shipbuilding, is looking to expand to new locations. At a high-level meeting convened at Thiruvananthapuram, the Kerala Government has requested the yard to look at sites in Vizhinjam, Poovar and Azheekal for setting up a new facility. The yard hopes to complete a preliminary study within two months A senior official of the yard said that the company plans to set up a big dock of VLCC capacity in the new location. This would enable the yard to enter into high value construction, conversion and upgrade work. Currently, the yard is constructing 34 ships of which 13 are platform supply vessels and anchor handling tug supply vessels. Of these, six are for Shipping Corporation of India and the rest for overseas companies. Besides, the yard is also constructing 20 FPVS for Indian Coast Guard and an Indigenous Aircraft Carrier for the Indian Navy. Cochin Shipyard is pursuing a vision to emerge as a leading shipbuilding and repair yard in the South-Eastern region. The yard has, however, reached full capacity utilisation in the last few years. In order to sustain the growth rate, it needs to invest in new facilities and continually innovate, the official said. In view of the keenness of the State Government to develop a port facility at Vizhinjam, the yard had expressed its interest to set up a shipyard facility keeping in view the logistic advantage of a port.
Besides, Vizhinjam's advantage by way of higher draft was also very attractive. Cochin Shipyard's understanding is that the State Government would extend logistic support by means of breakwater facility and road or rail links and make available the necessary land, the official said. The main factor for CSL achieving stellar performance in the last five years was the adoption of the right product mix, catering to international clientele and entering the Defence sector by building the prestigious aircraft carrier project, he said. The shipbuilding income increased by six times, from Rs 222 crore in 2005-06 to Rs 1,320 crore in 2010-11. Similarly, turnover has increased three times during the same period. Profit before tax had increased 14 times and net profit 13 times during the period. The contribution made by the company to the national exchequer by way of sales tax, income-tax, customs and service tax increased from Rs 26.54 crore in 2005-06 to Rs 110 crore in 2010-11. In 2009-10, it declared a dividend of Rs 1 for an equity shares on the 11,32,80,000 fully paid-up equity shares of Rs 10 each and Rs 70 per 11,91,420 fully paid 7-per cent non-cumulative preference shares of Rs 1,000 each. In recognition of its performance in the last few years, CSL was awarded the Category I Miniratna status in July 2008.

Source: Hindu Business Line