ABG nets German order

ABG Shipyard in Mumbai has bagged an order of £363 million from Germanys Bereederungsgesellschaft H Vogemann GmbH for the construction of 12 handysize bulk carriers of 35,000 DWT. With this order, the company’s order book now stands at $1.8 billion. The order was signed on 3 July 2007 and financial arrangements have just been concluded.

Rishi Agarwal, MD of ABG said: This is a ground-breaking order and we at ABG are proud to have won this contract against stiff international competition. The order is eligible for a 30% subsidy under a 5-year government scheme, that ended on 14 August, whereby local builders could get an additional 30% off the cost of building ships of a certain size or for the export market.

This subsidy is given to public sector shipyards such as Hindustan Shipyard Ltd, Cochin Shipyard Ltd and Mazagon Dock Ltd in instalments during the construction of the ship, while private firms such as ABG Shipyard, Bharati Shipyard Ltd and L&T receive it after the ship is delivered to the owner.

It is not clear whether the subsidy will be extended in its present form, reintroduced with modifications or even scrapped altogether. Earlier this week, a report prepared by consultant KPMG India Pvt. Ltd, engaged by an association of shipbuilders, not surprisingly recommended that the scheme be extended by 10 years.

In a statement, Udo Wiese, managing director of the H. Vogemann Group, said his company was considering further new shipbuilding projects with ABG. Vogemann owns a modern young fleet of 19 dry bulk carriers and is also building new ships at Namura Shipyard in Japan and GSI in China.