INDIAN SHIPPING SCENARIO

CURRENT TRENDS AND FUTURE PLANS

BY AKHIL PAREKH (12066)

ANKIT AGARWAL (12070)NIKHIL AHUJA (12096)

VARUN PREET UPPAL (12110)VISHAL MALHOTRA (12112)

INDIA

KEY AREAS OF ANALYSIS Indian Shipbuilding Industry

Profile of major shipyards in India Product range catered to by shipyards in India Upcoming shipyards in India Statistics related to investment, expansion plans, new upcoming projects, etc in the

Indian Shipbuilding Industry Infrastructure details of upcoming Shipyards in India Key selling points of Shipyards in India Future outlook of shipbuilding industry in India Independent assessment and recommendation about shipyards in India Critical issues and problems related to Indian Shipbuilding Industry

PLAN CONTD.

Market Assessment for Shipyard Macro study of Shipping and identification of target segment for shipyard Demand supply Scenario for ships Charter rates assessment and its impact on Shipbuilding Industry Site Selection for Setting up new shipyard Infrastructure Required for Shipyard Planning of equipments and Machinery for

Shipyard Project Scheduling & Planning Shipyard Consultant on Regulatory Matters List of Permission required for setting up shipyard Classification & Statutory requirements for shipbuilding Subsidy Issues in Indian Shipbuilding

PLAN CONTD. Risk Assessment in the Indian Shipbuilding Industry

Assessment of risk associated with establishment like Competition in the Indian Shipbuilding market Longer lead time for Indian Shipyards Technical Risk associated with Indian Shipyards Liquidated Damage due to delay or failing to meet performance guarantee Design & Engineering risks with the Indian Shipbuilding Industry Supply chain

management & Project execution risks in Indian Shipbuilding Industry

Financial Study Capital Expenditure required for setting up a Greenfield Shipyard in India Phasing of investment Operational Expenditure in Indian Shipbuilding Industry Revenue projections based on market and capability of Shipyard Equity Required (how much & when) Financing options, Sources, Debt/Equity ratio etc. Break-even analysis & ROI

GROWTH PATTERN – INDIAN SHIPPING

PERIOD COASTAL OVERSEAS INDIAN TOTAL WORLD SHIPS MGT SHIPS MGT SHIPS MGT MGT 1997-98 234 0.643 244 6.200 478 6.843 439.0 1998-99 250 0.656 240 6.212 490 6.868 444.1 1999-00 273 0.682 240 6.231 513 6.913 449.4 2000-01 316 0.697 230 6.119 546 6.817 475.2 2001-02 336 0.734 224 6.087 560 6.821 487.0 2002-03 425 0.805 191 5.372 616 6.178 503.0 2003-04 436 0.808 203 6.136 639 6.944 533.3 2004-05 458 0.811 228 7.202 686 8.013 546.6 CAGR Last 7 yrs 10.07% 3.37% -0.96% 2.16% 5.30% 2.28% Last 2 yrs 3.81% 0.33% 9.26% 15.79% 5.53% 13.89%

Based on: Tonnage statement, Government of India

SIZE OF THE INDUSTRY (RECENT TRENDS)

• Number of ships increased from 850 to 912 as on Jan 01, 2009

• Shipping tonnage increased from 9.03 million GT in 2007-end to barely 9.3 million GT towards 2008-end

• The present average age of Indian ships is 18.3 years, as against 18 years last year.

7

MARKET SHARE (SALES)

9

Figures as on 31st march 2009

MARKET CAP

10

NET PROFIT

11

Figures as on 31st march 2009

KEY PLAYERS IN INDIAN SHIPPING

Company Turnover(2006-07)

Million Euro

No. of ships owned

DWT

Shipping Corporation of India Ltd. (SCI)

628 83 owned (in addition, 53 ships are

managed and manned)

4.62 million (Plus 68,000 DWT of other manned vessels)

The Great Eastern Shipping Co. Ltd.

380 42 3.02 million

The Great Offshore (newly formed through de-merging)

Turnover for 2004-05 merged with Great Eastern Shipping

31 43,000 tons

Mercator Shipping 49 13 (Excluding Barges) 1.34 million (Plus 6,500 tons of barge tonnage)

Varun Shipping 46 16 0.54 million

Essar Shipping 157 30 1.65 million

FUTURE PLANS - SHIPOWNERSCompany Vessel types Future plans

Shipping Corporation of India Ltd. (SCI)

Crude oil Tankers, Product Tankers, Chemical Tankers, Gas Carrier, Bulk Carrier, Liner Ships, OSVs,Passenger-cum-Cargo Vessels

Expansion, modernization & diversification of its fleet (US$ 1.0 billion investment approved by Indian Government) Exploring setting up of Joint Venture companies One Crude oil Tanker on order list, being built at Hyundai, Korea, delivery scheduled at the end 2005

Essar Shipping VLCC, Suezmax carriers, Product Tankers, Dry bulk carriers, Mini bulk carriers, Tugs

Focusing on refining & marketing To cover the entire value chain from oil terminal to international logistic Development of Vadinar Terminalling Facility with Crude oil tankage cap. of 5.79 mill. Tankage cap. Of 6.81 mill. Barrels. Annual throughput capacity of 200 mill. Barrels Plans to emphasize more on Integrated coastal trade & transport

FUTURE PLANS - SHIPOWNERS

The Great Eastern Shipping Co. Ltd.

Crude oil Carrier, Product Carrier, Gas Carrier, Bulk Carrier

Five Product Carriers (Medium Range) expected to be delivered by mid 2007 Embarking upon plans for expansion, modernization & diversification of its fleet

The Great Offshore

PSVs, AHTS, AHT, DSVs, Harbour Tugs, Const.Barges, Drilling Units

Capitalizing on global opportunity in Exploration & Production sector Takeover of three new AHTSVs and two PSVs

FUTURE PLANS - SHIPOWNERS

Mercator Shipping

Tankers, Bulk Carrier, Barges

New takeover from Klaveness Shipping Norway for nine bulk carrier worth $400 m by Dec 2005 Eyeing on 10% of Indian bulk market

Varun Shipping

Tankers, Gas Carriers, Bulk Carrier, AHTS

Replacement of ageing tonnage & selection, training of skilled seafarer Adding of more vessels Planning to invest Rs. 1,000 cores in the current financial year Company with Exmar group of Belgium & IOC bid for LNG Tanker against tender floated by Petronet LNG. If accepted the partners will jointly float a new company in India & operate the LNG tanker on charter for 25 years

ANALYSIS OF CURRENT SHIPBUILDING

ACTIVITY IN INDIA

INDIAN SHIPBUILDING CAPABILITIES

14 medium to small shipyards

These have 11 dry docks and 26 slipways.

Only HSL and CSL capable of larger sized shipbuilding

17

COCHIN SHIPYARD LTD., COCHIN

Most modern and the largest shipyard in India, CSL is capable of building ships up to about 125,000 DWT.

Established in 1972 under technical collaboration with Mitsubishi Heavy Industries of Japan.

Located over an area of 190 acres, and has two dry docks and three quays. The new construction dock is 255 m. long by 43 m. wide. The repair dock is 270 m. long by 45 m. wide. The facility has the largest hull fabrication shop in India, covering over 300,000 square feet of area.

CSL constructed double-hull tankers, bulk carriers, passenger vessels, tugs and defence ships. The yard is currently engaged in the prestigious project of building India’s first indigenous aircraft carrier.

HINDUSTAN SHIPYARD LTD. VISHAKAPATNAM

•Established initially under the private sector in 1941 and nationalised in 1961, HSL is the oldest and one of the two large commercial shipyards.

•The yard has constructed a wide range of merchant vessels from bulk carriers to passenger vessels, OSVs, and drilling platforms.

•The yard facilities include three slipways, a covered building dock, wet-basin, outfit and engineering shops, etc. HSL can build ships up to 50,000 DWT in covered building dock.

•The shipyard has a workforce of about 3,000 with capability to process about 1,000-1,200 tonnes of steel per month.

ABG SHIPYARD, SURAT Within15 years, the company has emerged as the largest private sector shipbuilding

yard in India.

The Yard has Multiple Building Berths, 2 Dry-docks, 125 m x 22.5 m x 5.6 m Fitted

with Computerised Synchronous Ship Lift Platform, of 4500 Tonnes Lifting Capacity

and 155 m X 30 m x 7.5 m, Graving Dry Dock served by 80-T Goliath Crane span 50

m, height 35 m.

The Shipyard has delivered 88 Vessels including Interceptor Boats, Self-loading and

Discharging Bulk Cement Carriers, Floating Cranes, Tugs, Split Barges, Bulk Carriers,

Newsprint Carriers, OSVs, DP Ships, AHTS, MSVs, DSVs, etc. for customers in India

and abroad.

The ABG Shipyard plans to make several changes to their layout to increase the ship

building capacity.

ABG is also constructing a large new yard near Dahej (nearly 200 km from Surat).

BHARATI SHIPYARD LTD.

Bharati Shipyard is the second largest shipyard in the private sector. It has two shipyards – both in the state of Maharashtra – at Ratnagiri and Ghodbunder.

In addition, the company has entered into a Memorandum of Understanding (MoU) with Pinky Shipyard Private Limited (PSPL) - a Goa based company for acquiring it.

Bharati shipyard has built tankers, dredgers, special purpose vessels, passenger vessels, tugs, offshore vessels and cargo ships.

The company has envisaged expansion and modernization of its Ratnagiri shipyard at an estimated cost of Rs. 650 million