By Devan Daniel
Sri Lankan shipbuilder Colombo Dockyard PLC has a full order book to build new vessels until early 2012 and is poised to capture the Indian market by creating synergies with related companies in India specializing in designing and fitting sea going vessels. The company’s ship repairs business however is under stress with fewer ships calling at the Colombo Port due to the global financial crisis.
"We have been building synergies with India which would continue to build the region’s capacity for ship repairs and ship building. There are services India excels in such as in designing vessels and we excel in workmanship and by creating synergies between the two countries we can outsource areas in shipbuilding that Indian companies are good at," CDP Managing Director Mangala Yapa said.
Both China and India are expected to lead the global economic recovery after the crisis and Yapa believes CDP should take advantage of Sri Lanka’s close proximity to the subcontinent. Currently, about 75 percent of its business comes from India, the latest being a passenger vessel built for the government of India.
"We have closely with Indian authorities and Indian companies in the industry. For those who say working with India is difficult and takes too much time, Colombo Dockyard has proved that it is a myth. We have a strong bond with India which augurs well for Indo-Lanka relationships," Yapa said.
The biggest yet...
CDP built a passenger vessel, christened the ‘Arabian Sea’, capable of carrying 250 people along with cargo up to 100 tonnes for the Lakshwadeep Union Territories of India. It was flagged-off last Friday and is the first of a series of two ships for the Indian government.
The Arabian Sea is the biggest and the first passenger vessel to be built in Colombo. Its construction commenced in March 2008. Both vessels would bring in US$ 36.6 million in revenues to CDP (approximately Rs. 4,172 million).
J. K. Dadoo, the Administrator of Lakshwadeep islands, who was in Colombo to flag-off the ‘Arabian Sea’ invited CDP to place its bid when Lakshwadeep calls for tenders to build for two more passenger vessels the territory required with a capacity of 400 passengers each.
CDP has so far specialised in building tug boats and multi purpose utility vessels while carrying out some work for the Sri Lankan Navy building inshore ferries and Yapa said its order book is full until early 2012.
The company has built over 200 vessels over the past three decades for governments and private clients based in the Maldives, Singapore, Cyprus, India, Nigeria and Saudi Arabia.
Riding the waves...
CDP’s ship repairs business is under stress due to the slump in shipping caused by lower trade volumes due to the global financial crisis.
"The ship repair business is under pressure because of the global recession. Consumer demand has dropped causing a drop in trade and this has caused charter rates to fall and owners are finding it difficult to pay us for their repairs. But we have been able to be successful," Yapa said.
"We have no choice but ride the waves and manage these difficult times, there is no other way. But there is great potential. With the war over and tourism expected to pickup we can look forward to more passenger vessels calling on Colombo," he said.
Financials...
According to financials filed with the Colombo Stock Exchange, CDP recorded a net profit of Rs. 1,792 million during the first nine months of 2009, an increase of more than 80 percent from Rs. 986 million recorded in the corresponding period of 2008.
Revenues from ship building activities grew by 60 percent from Rs. 2,313 million to Rs. 3,700 million. Ship repairs brought in Rs. 5,165 million, up 21 percent from Rs. 4,263 the previous year.
Total revenues for the first nine months of 2009 amounted to Rs. 9,476 million an increase of 32 percent from Rs. 7,169 million the previous year.
Pix by Dimuthu Premarathna
source - www.island.lk
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