Shipping firms go off the beaten track

Shipping companies are going off the beaten track -- with a vengeance. So the cyclical nature of the industry is no sweat for new-age shipping tycoons as they are getting into new areas like port development, dry docks, offshore business, and logistics.

Mumbai-based Chowgule Steamship is the latest to join this bandwagon. The company is planning to develop a minor port at Jaigad in Maharashtra, with an estimated investment of Rs 335 crore.

The Maharashtra government and the Maharashtra Maritime Board have accorded approval to the project, which will be completed by 2012.

Mercator Lines had also evinced keen interest in developing two minor ports, at Maroli and Vansi-Borsi, in Gujarat. But it later dropped the plan to focus on its core strength.

However, the company has forayed into offshore business by placing an order worth Rs 810 crore for premium offshore jack-up oil rig for worldwide drilling.

"MLL is firming up its plans to get into upstream oil business, including exploration and production at a later stage," a source said.

Varun Shipping Company, a major LPG carrier with 77 per cent market share in India, will invest Rs 450 crore by the end of this calendar year on acquiring vessels to support offshore activities.

The company is planning to offer turn-key solutions in the offshore sector and will acquire offshore-related infrastructure.

Not to be left behind, PSU shipping major Shipping Corporation of India is planning to foray into container terminal handling.

"The company is in talks with an international terminal operator to bid for the upcoming fourth container terminal at the Jawaharlal Nehru Port Trust," a company executive said.

Coastal shipping major Shreyas Shipping & Logistics is planning to construct five logistics parks for multimodal logistics, warehousing, distribution and consolidation.

"At a later stage, the company also plans to acquire dedicated freighters. This will make it a complete logistics operator with exposure to land, sea and air," a senior company executive said.

Another coastal shipping company, SKS (Ship), formerly Shahi Shipping, is planning to construct a ship repair yard at Mankule village in Raigad district of Maharashtra.

Industry analysts said the companies' new initiatives were a natural progression of their business.

"The companies are targeting related business segments to enhance their core strength. Moreover, terminal management, offshore business, and logistics offer more margins," said an analyst.