‘We are Very Keen to Expand Our Role in LNG Transportation’

S Hajara,
Chairman and Managing Director, Shipping Corporation of India (SCI),
Serving the organisation for nearly four decades including being at the helm of its affairs for over seven years has been an exhilarating experience for S Hajara, says the Chairman and Managing Director, Shipping Corporation of India (SCI), in this interview.

Now that you are superannuating in December this year, can we have the privilege of asking you how does it feel like leaving the organization after having served it for nearly four decades and being its Chairman and Managing Director for the past seven years?
Although there are several memories close to my heart, I would summarise that it has been exhilarating experience to serve this organisation for nearly four decades including being at the helm of its affairs for over seven years. I am happy that during the course of my tenure as CMD, SCI has been frontrunner and torchbearer in terms of growth, diversification and replenishment of its tonnage.

Kindly detail the potential for the dry bulk, tanker and container segments in the country.
It is expected that the drybulk fl eet growth would continue by 11 per cent in 2012 and reduce to 6 per cent in 2013. In tanker segment, infl ux of tonnage due to new deliveries will come down in 2013 to 30 million dwt from 40 million dwt and it would possibly give some respite to this sector. In the container sector, it is projected that in 2013 the rate of expansion of fl eet will be lower than the rate of growth in trade.

What implications have the Euro crisis and the sanctions on Iran brought into the industry?
As an effect of the Euro crisis and the sanctions to the trade levels have been affected adversely as a result of which the freight levels have been low.

What is the potential for LNG transportation segment in the country? What measures have the company been undertaking to strengthen its hold on the segment?
LNG is the sunrise segment, and we have part ownership of three vessels and are operating two of them fully and third will be operated by SCI in near future too. We along with our existing consortium with Japanese partners are also pre-qualified bidder for Petronet Kochi project and are hopeful of bagging the project. We are also in talks for all other future projects in this sector in the country.

Please detail the opportunities and threats of the industry, both in the Indian and global context.
Globally we are facing the downturn in the shipping industry primarily due to oversupply of tonnage. This coupled with Euro zone crises and US economy slowdown has aggravated the situation. We envisage that the global GDP continues to grow at present level of 3-3.5 per cent with trade continues to grow at its current rate and tonnage supply would reduce from mid 2013 onwards. Then, as shipowners, we can expect that the demand-supply equilibrium will be achieved and rates will start moving north bound.
In Indian context, there is a huge gap between India’s growing seaborne trade and India’s existing tonnage. In fact, share of Indian ships in India’s overseas trade has declined from about 40 per cent in 1980s to about 22 per cent in 2000 to 13 per cent in 2005 and now it is at about 8 per cent. This indicates excessive dependence on foreign flag vessels in the carriage of India’s trade, which is a matter of concern from the point of view of energy security for our country. It may be mentioned that despite the introduction of tonnage tax, there are several other direct and indirect taxes that offset the benefit of the tonnage tax system.

Please brief us on your ship acquisition programme.
The company hopes to cross the mark of 6 million dwt this year. Currently, we have 21 ships on order which will be delivered in the current and next financial year.

What projects are you currently engaged in?
Our primary thrust would continue to be on energy transportation. Currently we are looking at joint ownership of bulk carriers with import of both coking coal and thermal coal which are projected to increase manifold in future. We are also very keen to expand our role in LNG transportation and are primarily targeting future LNG projects in India.

Tell us about the key focus areas and the future growth prospects of the company. Our vision is to make SCI a truly global shipping company with a large fleet and presence in all major markets and continue to have robust internal processes based on the state-of-the-art IT system so as to increase the speed and accuracy of business transactions.