August 2, 2007
Punj Lloyd takes stake in Pipavav Shipyard
An ambitious Indian shipyard project has found a major new investor.
Punj Lloyd Limited, one of the largest engineering construction companies in India, has signed a Memorandum of Understanding (MOU) to invest Rs 403 crore (about $99.7 million) to acquire a 25.1 percent stake in Pipavav Shipyard Ltd (PSL).
Punj Lloyd notes that "PIpavav Shipyard Ltd will be a large state-of-the-art shipyard, strategically located on the west coast of India along the Dubai-Singapore sea route. Spread over 725 acres of land, PSL has 175 acres of developed waterfront land. Pipavav has confirmed orders worth US $358 million and a Letter of Intent for US $513 million."
Pipivav Shipyard is an initiative of SKIL Infrastructure Ltd., founded in the 1990's by entrepreneur Nikhil Gandhi.
One of SKIL Infrastructure's successful ventures was development of India's first private sector infrastructure project--Pipavav Port in which SKIL cooperated with and joined hands with the Gujarat Maritime Board and the Government of Gujarat to promote and develop the Port of Pipavav into a modern, all-weather, deep water, direct berthing sea port on the coast of Gujarat. Located between Mumbai and Kandla, Pipavav was the first port in the country to be developed in the joint sector with private initiative, capital and management.
From a single jetty inaugurated in 1996, by 2004 the Port of Pipavav had three solid cargo berths of 725 meters and one liquid cargo berth of 300 meters. Fully operational, these can handle 12 million MT of cargo.
SKIL handed over control and ownership of the company to the A.P. Moller Group in 2005. Pipavav Port is now poised to become a world class container hub. The total capacity of the Pipavav Port after current expansion as envisaged will be 1.4 million TEUs of container and 5 million tones of solid bulk cargo.
Now SKIL is hoping to see the same sort of growth at Pipavav Shipyard.
Located within the port, Pipavav Shipyard was initially conceived as a ship dismantling yard and was developed with two large wet basins each measuring 680 meters length and respective widths of 60 meters and 65 meters.
SKIL has plans to make it one of the largest shipyards in the world, able to build ships as large as 300,000 dwt tankers, or aircraft carriers.
Punj Lloyd, which has operations spread across Middle East, the Caspian, Asia Pacific, Africa and South Asia , says taking a stake in the yard is a strategic investment by the company to support the growth of its business in the offshore sector. In view of the robust oil prices and the substantial E&P activities in the country, the opportunity for revamping existing offshore platforms and deploying new platforms by upstream oil and gas companies is expected to be significant. The proposed investment in PSL will give Punj Lloyd access to capabilities to serve this market more effectively.
These include fabrication facilities for platforms, SBMs, rigs and jackets to exploit the opportunities in this sector.
Punj Lloyd is currently executing the Heera Field Redevelopment project for India's ONGC.