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Tuesday, December 12, 2017

Despite the new additions it’s not all smooth sailing for SCI

Posted to Despite the new additions it’s not all smooth sailing for SCI (by on October 19, 2011

SCI's losses and pressure on its margins compel it to cut down on its acquisition program

Two weeks after its Golden Jubilee celebrations of 1 October, 2011 in Mumbai, the state-owned Shipping Corporation of India Ltd. (SCI) accepted delivery of a 80 T BP Anchor Handling, Towing & Supply vessel “m.v. SCI Ratna”. But the glitter of the anniversary celebrations nor its present on-going acquisitions in any way indicate that it is all that hunky dory for SCI in its 50 year, after its scintillating growth trajectory it displayed in the past few years despite the global economic downturn.

In fact SCI has cancelled plans to buy three new containerships. Besides the company has reported losses in the past two quarters .This has sent signals that India’s biggest ocean carrier is treading cautiously in its expansion plans as the global oversupply of ships, low freight rates and rising costs hit margins of fleet owners.

SCI had signed contracts for acquisition of four new-buildings 80 T BP Anchor Handling, Towing & Supply vessels with Bharati Shipyard Limited, India. The first vessel, “m.v. SCI Panna” was delivered to SCI on 23 August, 2011 and the remaining two vessels are scheduled for delivery by the end of 2011.

The new acquisition has a gross tonnage of 2,039 tonnes and deadweight of 1,983 tonnes. The vessel which is classed with the Indian Register of Shipping is equipped with DP I system and has been built to comply with the latest and most stringent international regulations.

In the offshore sector, SCI presently has a fleet of 12 vessels of which 10 vessels were acquired during the eighties. These vessels have been dedicatedly serving the oil exploration and production sector in India for the last 25 years.  The four AHTSVs ordered with Bharati Shipyard are 1 phase replacement of SCI’s 10  AHTSVs  & comply with superior specifications like Dynamic Positioning, Reverse Osmosis Plant and UKOOA compliance as required by Indian E&P operators, etc.  

As a National carrier, SCI has been aiming to increase its presence in India’s offshore sector. To promote Indian Shipbuilding industry, SCI has ordered four AHTSVs of 120 BP capacity and two PSVs with Cochin Shipyard on nomination basis. The service of these vessels would be crucial to the E&P operators in the Indian Offshore sector. Apart from serving the nation’s interest, the vessel would also strengthen SCI’s fleet base as well as start a new era in its offshore segment.

SCI today has a diversified fleet of 82 vessels which includes 12 offshore supply vessels.  With addition of this vessel, SCI’s fleet strength has increased to 82 vessels and has touched a new high of 5.827 million DWT. Acquisition of the vessel is in line with SCI’s strategy of maintaining a modern and young fleet of vessels. The Company has 27 vessels on order at present and 9 of these are scheduled for delivery by the end of 2011. 

Starting out with a small fleet of 19 vessels at inception in 1961, SCI has over the last five decades grown into a modern fleet. Its 82 owned vessels in different categories aggregate 5.87 million deadweight tonnage account for about a third of India’s total tonnage.  Additionally, SCI also manages 44 vessels of other organizations.  SCI offers a comprehensive range of services including Liner and Passenger Services, Container Services, Break-Bulk Services, Passenger-cum-Cargo Coastal Services, Bulk Carrier Services, Tanker Services, Specialised Vessel Services, Lighterage Operations and Offshore Services. SCI’s ships sail to destination throughout the world and its corporate network spans 4 Indian metros as well as an office in London. 

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