Shipping Corporation of India, the country's largest shipping firm by fleet size, will hive-off its offshore business into a separate subsidiary in a bid to cash on the lucrative sector at a time when the domestic industry is in rough weather. "Talks are on at the moment to hive-off the offshore division into a separate subsidiary. The offshore sector is always a safe bet as it is not as volatile as the general shipping business," said Sunil Thapar, head of tanker and bulk sector, SCI. Globally, shipping industry has been witnessing one of its worst business cycles with plummeting Baltic freight rates and rising cost of bunker fuel. Several Indian shipping companies including Great Eastern Shipping, Essar Shipping and Global Offshore have increased investment in offshore segment where revenue has been more consistent than general shipping business.
With offshore oil exploration activities within India and abroad on the rise a large number of vessels are required to provide logistical support. Chartering of such vessels, usually on a long-term basis, provides consistent revenue stream and Indian companies have been adding offshore support vessels to tap the potential in this market. As part of its expansion plan, SCI will also look into alternate areas of operations, such as shipyards and terminal operations. "In bulk and tanker division, the outlook is not positive at the moment. We can only see the shipping sector recover and stabilise by 2013. But there are many opportunities for us in shipyards and terminal operations and we will be looking for partners in all these areas," said Thapar. The company currently has three units - bulk, liner and offshore.
Date: 13 Aug 2011 Source: Indiatimes