Mercator enters jv with shipbuilder

Mumbai-based shipping company Mercator Lines Ltd and shipbuilder Mech Marine Engineers Pvt. Ltd have formed a shipbuilding joint venture, named Mercator Mech Marine Ltd, to build commercial ships.

The proposed shipyard will cost Rs2,000 crore and will be located at Vansi Borsi in Gujarat. The yard will be capable of building ships up to Panamax size. H.K. Mittal, chairman and managing director of Mercator Lines, will be the chairman of Mercator Mech Marine, while Mohanlal will be its managing director.

Mercator Mech has been allotted 180 acres of land by the Gujarat government for setting up the yard and it plans to start building ships in 2009. The company is also looking out for suitable land for a second yard.

Meanwhile, Mech Marine is independently setting up a new shipyard on 200 acres of land at Palghar in Maharashtra at a cost of Rs300 crore. It has already started constructing three ships there even as the civil construction work at the facility is in progress. The Palghar yard is capable of building ships of up to 150 metres in length, such as small tankers that can carry petroleum products. Mech Marine currently has orders for building 13 ships worth around Rs750 crore.

Mercator Lines joins the growing list of local private firms that have entered the shipbuilding sector. Companies such as Larsen & Toubro Ltd, SKIL Infrastructure Ltd, Good Earth Maritime Ltd, Apeejay Shipping Ltd have entered the business, joining established players including ABG Shipyard Ltd, Bharati Shipyard Ltd, Cochin Shipyard Ltd, Hindustan Shipyard Ltd, Mazagon Dock Ltd and Goa Shipyard Ltd.

The Union government plans to set up two mega shipyards, one each on the east and west coast of the country, through the public-private-partnership route. Each of these yards will require an investment of Rs2,000 crore.