India Cements is pressing ahead with ambitious plans to make it big in the country’s growing dry-bulk shipping business five years after pulling out of shipowning.
The company says it wants to acquire a fleet of handysize and handymax bulkers to gain greater control over its transport costs after being exposed to soaring freight rates in recent years.
Chennai-based India Cements expects to finalise a deal to acquire a handymax later this month and aims to have a stable of at least 10 handysize bulkers of 30,000dwt to 40,000dwt capacity by 2011-2012.
It will be the outfit’s second purchase in three months. It bought the 41,800dwt Effy N (renamed Chennai Jayam, built 1983) last November from AM Nomikos for a reported $30m.
R Sankaran, president of the company’s shipping division, tells TradeWinds that it wants to acquire at least four or five more handymaxes of a similar size in the next financial year.
The owner is bullish about prospects for the Indian dry-bulk sector.
"We are very much into the shipping business now and aim to establish ourselves in the growing dry-bulk market in the long run," said Sankaran.
He says India Cements is also exploring possibilities of ordering newbuildings at yards either at home or in the Far East.
The company imports about 4Mt-4Mta of coal per year for its network of cement facilities but this will rise to 9Mta on completion of two proposed plants.
Sankaran says to begin with, the company intends to use the vessels for its own business but will keep the option to charter out tonnage should the right market opportunities arise.
India Cements exited shipping in 2003, when it sold the last of its ageing bulkers. However, it decided to re-enter the business when freight rates quadrupled during the dry-bulk boom.
Sankaran says owning vessels will help it make substantial cost savings.
The company currently owns only one other bulker, the 53,600-dwt Gizan Glory (built 1979).