Small Scale Ship Building is India’s Latest Success

“Oil and gas needs lead the way as India gains a reputation of a global player in building small ocean going vessels”

Ahmedabad, India, February 8, 2006 – Need to build an offshore supply vessel? How about a small ocean going bulk carrier? Look no further than India say project logistics specialists. International shipping firms and offshore logistics companies are rapidly discovering India’s shipyards, which are rapidly becoming the preferred destinations for building smaller and medium sized vessels of up to 30,000 DWT. There are many reasons for this, but the main reason is clear. Oil and gas exploration.

“Oil and gas exploration activities, both on-shore and offshore, have taken off like a rocket over the last two years, ever since the government threw open these activities to private operators and have auctioned several blocks,” said Mylacave Abraaham, general manager in India for Rohde & Liesenfeld Projects, a Global Project Logistics Network (GPLN) member. “Recently Cairn Energy, Reliance and others have had some spectacular strikes in both gas and oil on the East coast and the Krishna-Godavari basin,” Abraaham continued, “As a result the demand for offshore supply vessels too have increased dramatically.”

Most of the orders are for the shipyards though are not for Indian companies, but foreign ones. Of the current total of 31 orders for vessels in the next twenty-four months, 27 vessels are being built for non-Indian companies. Most of these orders as well are for offshore supply vessels (OSVs) which are required in oil and gas exploration and production.

Another major factor that contributes to this boom is that while India’s needs for these OSV’s is growing, at the same time many of the their current OSV’s are old and require replacement as these vessels are near the end of their usefulness. Currently India has around 85 OSV’s in activity, yet many will soon need to be retired. Add this to the fact that India’s requirement for OSV’s should grow by nearly 20% within the next five years while the average OSV needs a minimum of around eighteen months to build and the oil and gas industry in India finds itself with a potential acute OSV shortage.

Also adding to the time needed to build these OSV’s is the fact that much of the tooling and equipment on the vessels is of foreign content and must be imported. This greatly contributes to the lead time needed to build the vessels. “As for equipment and the materials for these type of vessels, the basic steel and structural materials would definitely be sourced locally as there are several companies manufacturing such material here,” says Mylacave Abraaham, “The imported materials would be the special handling and operating equipment on board the vessels and also the related control instruments. Maybe even some of the engines are imported from the established manufacturers.”

As India is quickly becoming major player in building these offshore supply vessels her shipyards are now often mentioned in the same breath as the industry stalwarts, such as the shipyards in Singapore and Norway. Currently there doesn’t seem to be much competition from other countries on the horizon either as the major shipbuilders in Japan, South Korea, and China have focused their energies on much larger vessels. At the moment most of these shipbuilders are simply unable to concentrate on these smaller vessels as their order books are full up with orders the bigger vessels. “Shipyards around the world, China, Japan, Korea and Europe, are busy fulfilling orders for large container vessels, oil tankers, etc. Last what I read no major shipyard can take an order before 2008,” said Abraaham.

This small vessel manufacture has not been isolated to the well known shipyards Alcock Ashdown’s shipyard in Bhavnagar, Gujarat, and the Mumbai based ABG Shipyard. Also the smaller vessel contracts are not simply limited to OSV’s. “There are several shipyards in India involved in such activities,” said Mylacave Abraaham, “And with the shipyards around the world being fully occupied, the Indian shipyards have been receiving substantial orders, including orders for small bulkers. One major shipyard that has bagged several orders recently is the Cochin Shipyard in Kerala. This shipyard also builds vessels for the Indian Navy.”

And the beat will go on…

As far as Mylacave Abraaham is concerned, India’s position as a rising star in smaller vessel ship building will only brighten. “For the future there will be tremendous growth at least for the next three to five years.”

Rohde & Liesenfeld Projects GmbH, a Global Project Logistics Network Member in both India and Canada, has more than 40 years of expertise in the international project business and can look back on a long list of successful, complex project transports world-wide. Rohde & Liesenfeld has become one of the best-known project transport providers world-wide during this time and enjoys an excellent projects reputation. The Global Projects Logistics Network (GPLN) is a non-exclusive professional projects logistics group for independent companies specializing in international projects shipping by air, sea and land as well as specialized lifts and handling of oversized, out-of-gauge and heavy lift cargo.