L&T plans mega shipyard

With demand soaring and the waiting period for ships extending beyond three years anywhere in the world, engineering major Larsen & Toubro (L&T) plans to make an initial investment of $230 million to build India`s largest shipyard. The new shipyard is likely to be built in the southern port of Chennai by the end of 2008 or in early 2009, and will be the country?s first shipyard equipped to build VLCCs with a capacity of 300,000-350,000 dwt.

A team led by S. Sreekumar, former director of operations at Cochin Shipyard, has already begun work on the yard. The greenfield site, spread across 1,500 acre, will have the capacity to build five VLCCs, 20 Suezmax carriers and repair 50-60 ships a year.

L&T`s decision to build a shipyard comes at a time when global shipyards are booked until 2009-2010.

With capacity in traditional ship-building countries such as Japan, Korea and Norway booked for the next few years, fleet owners have started looking at new destinations such as China and India.

Last year, the government announced it would invest Rs 100 billion in building two shipyards. The country has around 20 shipyards, the majority state-owned, but none has the kind of capacity L&T is talking about. Indian ship builders, including private sector ones such as Bharati Shipyard and ABG Shipyard, have been expanding their capacities to take advantage of the global boom in ship-building.