Gujarat moves to building ships

The state of Gujarat in north western India is emerging as a major centre for ship building, with the Adani group, ABG Shipyard and IL&FS submitting their proposals worth Rs 2,600 crore ($577 million) to the Gujarat Maritime Board (GMB).

In addition, the Kandla Port Trust is also planning a ship repair and building yard in association with a private partner at an estimated cost of Rs 500 crore ($111 million).

Some South Korean companies have also shown an interest in setting up shipbuilding facilities in the state since India has lower labour costs and has the potential to grab part of the market. To encourage growth, the central government has allowed 100% Foreign Direct Investment (FDI) in shipbuilding and is offering subsidies.

The Adani group has received an in-principle approval from GMB for setting up ship-building facilities near its Mundra port. “We are planning to invest Rs 1,500-Rs 1,600 crore and are looking at facilities to build even Panamax-size ships having 80,000 to 90,000 dwt,” said Sanjay Gupta, ceo infrastructure at the Adani group.

ABG Shipyard, the largest private sector shipbuilding company in India, intends to set up a new shipyard at Dahej with an investment of Rs 400 crore. Its existing facility at Magdalla is booked for the next two years with orders worth Rs 1,300 crore, according to ABG managing director Rishi Agarwal. The Indian investment company IL&FS has shown interest in investing around Rs 700 crore in a shipyard at Pipavav and a detailed project proposal is awaited.