Shipshape

Mumbai, Jan. 2: ABG Shipyard is planning to enter the repairing business.

The company is acquiring the ailing Western India Shipyard in Goa and plans to turn it into a ship repairing yard.

“There are no standalone repairing yards in India, unlike Singapore or Colombo, which have yards dedicated to ship repair. We believe there is a huge potential in this segment. Even the Indian Navy has huge requirements, which can be carried out by us,” said ABG chief financial officer Dhananjay Datar.

At present, the only repairing and maintenance unit in the country is run by Cochin Shipyard.

ABG has an order book of Rs 8,270 crore, which is about nine times its annual turnover, projected to be around Rs 950 crore in March 2008.

The company is also scouting for land on the eastern coast for another repairing yard. It is even looking for a partnership with a government-owned shipyard.

ABG will pay Rs 30 crore for the sick unit in Goa and expects to make it operational by the middle of next year. “We have targeted a turnover of at least Rs 300 crore from the repair yard by 2010. All our ships, including those of our customers can use this yard. We also plan to carry out rig repairs here,” said Datar.

Once overhauled, the Goa yard will have facilities to conduct dock repairs for six ships at a time. The earnings before interest, tax and amortisation margin in repairing are around 40 per cent compared with 28 per cent in building, said Datar.

The company is also building a rig yard in Dahej, which will be ready by December 2008. ABG is investing Rs 650 crore in the yard, which will have a capacity to build four rigs at a time.

ABG is setting up a “world class” shipyard in Dahej across 130 acres at an investment of Rs 400 crore. The yard, which will have a capacity to build vessels of up to 1,20,000 dead weight tonnes, already has an order book of $1.2 billion.