Lack of fresh orders hits Indias shipyards

Indian shipbuilders may maintain profit growth in 2009-10 but order intake will deteriorate further as shipping companies stung by a credit crisis and plunging freight rates put expansion plans on hold and cancel orders.

ABG Shipyard, India?s largest private listed shipbuilder, received its last order in June, worth Rs585 crore. Rival Bharati Shipyard Ltd, with a current order book worth Rs4,800 crore, earns 70% of its revenue from offshore supply vessels which has not seen a slowdown yet. State-run Shipping Corp. of India has postponed its Rs5,000 crore expansion plans by at least six months while Essar Shipping Ports and Logistics Ltd recently cancelled orders for three vessels.

Shipping firms overseas are also reigning in on expansion plans making it tougher for shipyards to survive, analysts said. Industry estimates show around 30% of the orders for dry bulk carrier ships globally could be cancelled because of lack of finance and a drop in charter rates since September.