ABG to expand

India?s biggest private sector shipbuilder ABG Shipyard Ltd plans to invest Rs1,300-1,400 crore to expand capacity to meet the rising global demand for building large cargo carrying ships. After the expansion, the Mumbai-based company hopes to build large size ships, including VLCCs, at its shipyard located at Magdalla Port in Surat, Gujarat.

Indian shipbuilders are moving from building small- and medium-size ships to constructing large ones as fleet owners chase economies of scale. “We are acquiring additional land along Vipul Shipyard to create facilities that can increase the capacity of the Surat yard,” Agarwal said. Besides, ABG is also looking at setting up a new yard in Surat, he added, declining to give details on this. “The planned expansion will increase our shipbuilding capacity two-three times,” Agarwal said.

The firm?s Surat facility can currently build 32 ships in a year. In May this year, ABG had agreed to acquire Vipul Shipyard Ltd, its neighbour at Magdalla port, to augment capacity to 40 ships in a year. ABG is currently building its second shipyard on 40 acres at Dahej in Gujarat at a cost of Rs950 crore. The first phase of the project, costing Rs400 crore, will give the company facilities the ability to build eight ships simultaneously, with each ship having a capacity of 120,000 and the company expects to complete this phase of the project by April.

The second phase, costing Rs550 crore, will give the company the capability to build jack-up rigs and expects to start constructing rigs in December 2008 and will be able to build four rigs at a time.