Seeking global contracts

Among the more amazing and heart-warming stories, in these glum days of global recession and failing businesses, is one of a comprehensive turnaround, scripted by an Indian shipyard.

Notorious for cost and time overruns that deterred prospective clients in the past, Cochin Shipyard Limited (CSL) has started delivering vessels on time and managed to bring them in within cost.

Recently, the Cochin-based CSL made the shipbuilding world sit up and take notice when it bagged a contract for the construction of a tanker for the national carrier Shipping Corporation of India (SCI) against some sterling international competition.

No doubt the contract was won because of CSL?s record of building and delivering to the same customer within a record period of two years, a 92,000 dwt double-hull tanker ? a vessel that would have earlier taken the yard twice the amount of time.

“Some of the largest ships in India have been constructed by CSL, which is today considered the country?s biggest, most sophisticated and modern shipyard,” is the proud boast of TJ Cherian, the yard?s general manager ? corporate matters.

Bidding for global orders

With the imminent delivery of Maharshi Parashuram, the double-hull crude oil tanker mentioned earlier, CSL is all set to bid for international shipbuilding and shiprepair orders.

The 237.6m long and 38m wide vessel, which cost $34.3 million, and had a delivery schedule of 24 months, has a scantling draught of 15.1m. The vessel is scheduled to be handed over to her owners in July .

The vessel is driven by a single Sulzer 6RTA58T slow-speed, two-stroke, single acting crosshead type heavy-duty marine engine, which has a normal output rating of 13,410ps at 90.8 rev/min and a maximum continuous rating of 14,200ps at 94 rev/min. Its service speed is 14 knots.

“As in models of this type, it has a bulbous bow, transom stern and one continuous deck, with five pairs of cargo oil tanks, two slop tanks with double bottom and double shell construction,” explains CSL assistant general manager marketing IS Sreekumar.

“The fully air-conditioned accommodation for a crew of 18, plus additional accommodation of nine for owners, pilot and Suez Canal crew, is located aft, along with the engine room and pump room. The fore peak tank and water ballast tanks surrounding the cargo tanks are designed as segregated water ballast tanks.”

The cargo oil tanks have been arranged for three segregations. The pumping system consists of three steam turbine driven cargo oil pumps and three cargo oil main lines. The vessel possesses three cargo pumps with a discharge rate of 2,500m3 per hour at 150m head, with automatic stripping arrangement.

The vessel has the latest high-pressure hydraulic or electric pneumatic deck machinery, including two sets each of windlass-cum-mooring winches, aft mooring winches and mid-mooring winches.

The steering gear is of the electro-hydraulic Ram type, with two pumps and two motors capable of steering the rudder from 35 to 30 deg hardover in maximum 28 seconds at full speed and load. The propeller is the keyless solid type of nickel aluminium bronze, designed to absorb 90% of MCR at MCR rev/min.

If SCI is satisfied with the tanker, it will go ahead and place an order with CSL for the construction of two Aframax tankers to be used for the transportation of crude. For that, the shipyard has to be able to match prices quoted by the best in the business, especially the South Korean yards, which SCI is currently patronising for such vessels.

“We have initiated several measures at our yard to cut costs and reduce delivery time,” says Sreekumar. “In the recent past, we have been hit by cyclical fluctuations in the shipping freight and scrapping markets; and have therefore had to adjust our operations.”

By customising the main products, intensifying marketing efforts and continuously inducting technology, the yard was hoping to absorb the impact of rising wages and higher input costs.

“At the moment, we are on the lookout for partners in design assistance and for sourcing international shipbuilding and shiprepair orders,” the CSL official says. “We have participated in several road shows abroad, and held discussions with shipowners in Germany and the US.

“We have sent a clear message to foreign shipowners that we are a yard that can deliver goods on time. In view of the tremendous success of the road shows, we are hopeful of getting sufficient orders from abroad soon.”

CSL recently tied up with IHI of Tokyo for a facility audit on shipbuilding. It has also signed an agreement with Dynex of Germany for marketing double-hull tankers. The yard is also in touch with a number of companies in the US, Asia and Australia for shiprepair jobs.

“There is intense global competition for shiprepair jobs, and prices are expected to fall further, even though the demand for such offshore engineering services is expected to grow,” says Sreekumar.

“Even within India, an estimated Rs70 billion ($1.45 billion) is to be invested in the offshore oil exploration and production engineering sectors during the tenth five-Year Plan (2002-07). CSL has successfully diversified into the offshore field, and taken up jobs for the Oil & Natural Gas Corporation (ONGC).”

CSL?s first offshore job included the fabrication and installation of 12 clamps on structures at Bombay High and Heera oilfields. The yard claims to have completed the work ahead of schedule, and at a lower cost to ONGC, vis-?-vis other projects.

Last year, the yard bagged an order to upgrade ONGC?s oil rigs Sagar Sakthi and Sagar Bhushan at Rs750 million and Rs406.8 million, respectively, against stiff competition from the top global players. It is at present undertaking the replacement of deck cranes at the SE and SJ platforms of ONGC.

Due to capacity constraints, the yard is planning to expand its shiprepair capacity through the installation of a shiplift system, rather than the old drydocking system. A detailed proposal in this regard has been sent to the Shipping ministry, and is awaiting clearance.

“The yard has been asked by the government to construct an aircraft carrier within two years for the Indian Navy, so that the UK-built I.N.S. Viraat can be replaced,” says Commodore MN Murthy, chairman and managing director of CSL. “But we will have to complete the construction of commercial vessels before we can start work on the aircraft carrier.”

The shipyard is also exploring ways to put its non-performing assets to better use. It is considering setting up an information technology park, to make optimum use of the advantages that Cochin offers by way of high-speed international connectivity.

Other business plans include setting up floating power stations and constructing and carrying out repairs on harbour craft.

“We are the only Indian yard to have secured quality accreditation under ISO 9001 for shipbuilding, shiprepair and marine engineering training; and are today able to turn out ships of all sizes ? from luxury cruisers to harbour tugs and patrol boats. We are the authorised service centre for Sulzer engines; and are able to carry out lay-up repairs and life extension for all types of craft,” says Cherian.

Cherian claims that the yard today delivers to record deadlines and promises cost effectiveness in every venture. Not only is CSL the only shipyard to have been awarded an “excellent” rating by the Indian government for four years, but it has also been adjudged one of the country?s top ten public sector units.

Spread over 70 hectares, CSL boasts two drydocks and three quays, a stockyard that can hold 60,000t of steel, and the country?s largest hull fabrication shop, with 30,000m2 covered area. The latter uses a Japanese integrated hull outfitting and painting technique, as also modern welding techniques.