Steelcast to foray into shipbuilding

To invest Rs 100 crore for a greenfield project in Bhavnagar.

Attracted by the investment opportunities lying along the 1,600-km coastline, many companies seeking diversification have docked at the ports of Gujarat. The latest to jump onto the bandwagon is Bhavnagar-based Steelcast Ltd. The company is planning to foray into shipbuilding near Bhavnagar and has already acquired land from the government.

Talking about the development, Chetan Tamboli, managing director of Steelcast, said they had earmarked Rs 100 crore for the greenfield project. "We have acquired about 1,30,000 sq m of land in the creeks of Bhavnagar," he told Business Standard.

Under a new company that is yet to be formed, Steelcast aims to raise the funds needed for the project by a mix of equity, debt and private placements.

The company has a turnover of Rs 18 crore and aims to touch Rs 34 crore next year, said Tamboli.

In the past, many companies like engineering player Elecon, Jaypee group, DLF, Hira Exports and Nirma, keen on getting into the ports business, had approached the Gujarat Maritime Board (GMB) for developing one of the many greenfield port sites in the state. By the end of the Eleventh Five-Year Plan, about Rs 40,000 crore would be realised by way of investments in the state's port sector. The local industry is expected to expand to $20 billion by 2020 from close to $5 billion now, according to a report by maritime consultants i-Maritime Consultancy Pvt Ltd.

Engineering firm Larsen & Toubro already has a shipbuilding yard in Gujarat and plans to invest about Rs 1,500 crore for shipbuilding and a repair yard.

Gujarat-based Adani group had also set its sights on a shipbuilding and repair yard at Mundra.

ABG Shipyard is building a new shipbuilding facility at Dahej at an estimated investment of Rs 400 crore.

While Pipavav Shipyard Limited, a major shipbuilding and offshore fabrication company, has an outstanding order book worth close to $1.1 billion for 26 new 74,5000 deadweight (dwt) Panamax Bulk Carriers.