Swan eyes ₹875 crore govt aid for Pipavav Shipyard expansion

Under the brownfield expansion programme of the scheme, existing shipyards can avail assistance of 25 per cent of the capital expenditure undertaken

Swan Defence and Heavy Industries Ltd (SDHI), which owns India’s largest shipyard in Pipavav, Gujarat, is eyeing around ₹875 crore in government assistance for the yard’s expansion, according to a top executive. 

 

This is in the wake of the recently-announced Rs 20,000 crore shipbuilding cluster programme, under which expansions are supported by the government.

 

The company is planning the shipyard's expansion and signed a memorandum of understanding with the Gujarat Maritime Board for an overall development plan of ₹4,250 crore.

 

This includes a Rs 3500-crore expansion of the shipyard and the development of a ₹550-crore maritime cluster, among other things, Vipin Kumar Saxena, chief executive office (CEO) told Business Standard.

   

With the latest ₹70,000 crore maritime booster programme and announcements made by Prime Minister Narendra Modi building demand aggregation, the company is also eyeing a bigger role.

 

“Foreign shipping lines are also watching India closely, and they will also come to India to build their ships. We are also in discussions with foreign clients for orders. With the capacity we have, we are very keen to become a global player,” he said.

 

The 600-acre facility can undertake multiple projects of very-large (VL) class vessels concurrently.

 

The company is looking at opportunities in small and medium sizes as well, where the government has given a major push, especially for crude oil vessels in the immediate future.

 

“Commerical shipbuilding is bound to pick up. All of us are gearing up with the hope that the demand generated will build self-reliance in commercial shipbuilding. The demand will come from both public and private sectors as their commercial vessels were being built outside India — now these will come to India,” he said.

 

SDHI recently partnered with South Korean shipbuilding giant Samsung Heavy Industries for technical assistance. The company will tap the latter’s expertise for large specialised orders as it plans global foray.

 

Under the brownfield expansion programme of the scheme, existing shipyards can avail an assistance of 25 per cent of the capital expenditure undertaken. The government has dedicated a corpus of ₹8,261 crore for the scheme.

 

SDHI is also looking to enter into cranes and port equipment in a big way, Saxena said. This space has been largely untapped and there are only a few players in India.

 

For components, it will look at developing local capacities.

 

This comes as the recently announced Shipbuilding Financial Assistance Scheme has a provision of minimum local content to be eligible for it.