India's shipbuilding industry is expected to grow at a compound annual growth rate (CAGR) of 30 per cent, according to a report prepared by Imaritime, a consultancy firm.
The report says that the country’s share in global order book is expected to be around 15 per cent by 2020 from the current 0.4 per cent.
Aided by cost competitiveness and skilled manpower, the industry is estimated to be worth $ 22 billion by 2020.
According to industry sources, "In earlier days, the industry was dominated by government shipyards. However, given the growth opportunities today, the private sector has started to expand their operations".
This is also evident from the share of private players in the overall shipbuilding order book, which currently stands at 73 per cent.
The order books of the shipyards reveal that private shipyards are mostly banking on overseas orders. Out of their total orders share of $ 2,686 million, overseas orders account for almost $ 2,284 million.
In the case of PSU shipyards, it is the other way round, with domestic orders accounting for $ 517 million out of their total share of $ 1,011 million.
The global order book has registered a 29 per cent CAGR over the period 2003-06.
Earlier, domestic shipyards focused on the construction of only small vessels. After the proposed expansions, shipyards will be able to build large vessels.
ABG Shipyard, for one, has received an order to build four bulk carriers of 54,000-DWT worth $ 139 million.
ABG had, in January this year, received an order for three similar ships.
Bharati Shipyard, another major private yard, had announced receipt of an order to build six bulk carriers of 20,000-DWT.
These orders will be executed at facilities currently under construction. Bharati had tapped the capital market in 2004 and ABG in 2005 to finance their shipyards.
Both companies began operations by building small vessels used for the oil and gas industry. ABG Shipyard has the largest order backlog globally in this segment.
Bharati already has an order from Great Offshore, while ABG is reportedly holding talks with a few foreign companies.
The engineering major, L&T, is also planning to enter the shipbuilding business, but is yet to finalise the location of its shipyard.
Source : Exim News Service