ABG Shipyard set to win $114 mn order
India's biggest private shipbuilder, ABG Shipyard Ltd, is set to win a $114 million (Rs518.7 crore) order to construct four cement carriers for Singapore-based Associated Bulk Carriers Ltd, an ABG executive said on condition of anonymity. ABG's first order win since the economic crisis deepened in September 2008 will be signed in a few days, the executive said.
Each cement carrier can carry up to 20,000 tonnes of cargo and will cost $28.5 million to construct, according to the executive. The ships will be delivered between August 2011 and April 2014.
Dhananjay Datar, chief financial officer and spokesman for ABG, declined to comment.
Associated Bulk Carriers is 50% owned by Bangkok-based dry bulk cargo specialist Precious Shipping Public Co. Ltd. The balance equity is held by PFS Shipping (Singapore) Pte. Ltd, a wholly owned subsidiary of PFS Shipping (India) Ltd.
Precious Shipping has signed long-term contracts with Aditya Birla Group's UltraTech Cement Ltd in December 2009 to haul cement for a minimum of 15 years and extendable to 20-25 years using three firm and one optional cement carriers at a day rate of $15,000 per ship.
Associated Bulk Carriers was formed to own and operate the cement carriers used for the UltraTech contract. It will also look for similar contracts from other cement producers in India, said Khalid Moinuddin Hashim, managing director of Precious Shipping.
The order from Associated Bulk Carriers swells ABG"s order book to 91 ships worth Rs13,180 crore.
Precious Shipping is ABG's biggest customer. The Mumbai-based yard is building 18 dry bulk cargo-carrying ships for Precious Shipping at a total cost of $ 518 million.
ABG booked its last order in August 2008 for building two oil drilling rigs for Essar Oilfields Services Ltd, a unit of the diversified Essar Group, for about Rs2,400 crore.
ABG is also planning to build two oil drilling rigs for itself at a cost of $360 million at its shipbuilding facility in Dahej, Gujarat. The yard has tied up with US-based Friede and Goldman Ltd for design and Singapore's Megaway Engineering and Trading Pte. Ltd for detailed engineering for executing the rig building contracts, said the company executive quoted above.