Cochin Shipyard mulls cautious expansion, to grow ship repair business

air said India should do much more of ship repair, given the country's location and good-quality manpower.

Amid the not-so-good business climate for ship building, state-owned Cochin Shipyard has prepared a cautiously sizable growth plan.

Expansion of the repair business, foray into the volume-based business of fishing boats, and eyeing Indian Navy projects and the private tourism sector are some.

“We are looking to up our ship repair turnover and have moved into profit sharing agreements with both Mumbai and Kolkata port trusts. We see an additional revenue of Rs 70-80 crore from Mumbai alone in FY20 itself. In the next two years, our revenue from the Mumbai port alone should be above Rs 200 crore,” Madhu Nair, chairman and managing director, told Business Standard.

Currently, about 70 per cent of the revenue comes from the ship building business and the rest from ship repair. “We are also investing Rs 80 crore at the Mumbai port for a floating dry dock and Rs 20 crore at the Kolkata port,” said Nair. An agreement is in place between each of the ports and Cochin Shipyard, creating an asset-light model for the latter.

Nair said India should do much more of ship repair, given the country’s location and good-quality manpower.

Cochin Shipyard was also in talks with the Mormugao Port Trust for their ship repair facility but could not take this ahead, due to vessel size limitations. “Between our own repair facility, along with the Mumbai and Kolkata ports, we can now handle large and mid-sized ship repairs. We were, therefore, on a lookout for a small-sized ship repair facility. Goa should have been small but it did not fit,” said Nair.

Though revenue consistently rose between 2014-15 and 2018-19, growth in the ship building business income was not as impressive as in the repair section.

According to the latest annual report, the yard built 20 defence vessels, 15 large vessels, 35 offshore support vessels and 52 small and medium vessels. These figures are unchanged from the preceding year.