Sembcorp to invest in Indian shipyard

For the first time, a foreign shipyard has picked up a stake in the emerging Indian ship building and ship repair industry. Singapore-based SembCorp Marine has recently bought a 3.31% stake in Pipavav Shipyard Ltd (PSL) for around Rs 80 crore. The investment agreement between the two companies involves Sembcorp picking up over 17.5 million shares in PSL at approximately Rs 45 each. “Sembcorp has been our technical partner for some time, advising us on aspects like shipyard design, technology, infrastructure, management and training of employees. With this stake, it has become the first foreign shipyard to take a stake in an Indian shipyard,” said Praveen Mohnot, executive director of SKIL Infrastructure, promoter of PSL. Engineering construction company Punj Lloyd also holds a 25% stake in the yard. With this, the Singapore-based company would get a firm foothold in Pipavav Shipyard, which is located on the western coast along the East Asia- Middle East sea route. It would also give the company an opportunity to tap into what would perhaps be the country?s largest shipyard, post-completion in 2008. “The shipyard, when completed, will have a maximum dock size of 651 meters and an annual throughput of 10 Panamax size vessels,” informed Mohnot. To date, the shipyard has secured $1 billion in contracts to construct 22 Panamax sized vessels of 74,500 DWT, with options to build an additional four. According to PSL, this constitutes the largest current order for Panamax vessels at any shipyard across the world. The shipyard has the capability to build vessels of a maximum 400,000 DWT.