Spar Shipping Officers’ conference took place on 20th and 21st November 2008 at Hotel Cidade- de Goa, located in North Goa. This was a part of the continuous effort of Spar Shipping to upgrade the quality of performance in order to provide a totally client-driven service.
Dignitaries from Spar Shipping, Fleet Management and others attended the two day agenda which was interspersed with business sessions cultural and leisure programmes to regale the participants and to provide them with a very different interaction platform where they could freely discuss their views on various issues. Amongst the top brass dignitaries who attended the seminar, were Capt Pritish Deshpande (Marine Operations Manager) and Mr. Magnar Bratholmen (Operations Manager) from Spar Shipping AS, Norway, Mr Dilip Nair (Director – Technical) and Capt M Sathya, (Manager - Quality & Safety) from Fleet Management Ltd., Hong Kong and Capt Prashant Rangnekar (General Manager) from Ebony Ship Management Pvt Ltd, Mumbai, India.
Commencing the programme with his opening address and introduction Capt. P. S. Rangnekar explained the role and the objective of the company. He highlighted the sophisticated control systems and communications network which provide owners with information about their vessels at any given time. He depicted some of the functions that ensure high quality in operation of the ship including technical crew administration, vessel inspections and superintendence of projects which are performed by the company's highly skilled professionals.
“What’s happening at Fleet in relation to Spar” was lucidly presented by Capt Rangnekar on behalf of Mr. K. S. Rajvanshy, Managing Director – Fleet Management Ltd who was unable to make it to the conference. “Fleet is considered by the industry as the benchmark,” Capt Rangnekar explained. “It is the 4th Largest Ship Manager in the world, largest fleet managed from Hong Kong and has a broad based recognition which is amply proved having secured the ‘2007 Awards for Best Ship, Safety at Sea, Training and Innovation’ award.
He explained that the company’s relationship with Spar dates back to the year 1996 when an opportunity for managing the first vessel owned by Spar shipping was provided to Fleet Management. As a result today Spar shipping constitutes 33% of the entire bulk carrier fleet managed by Fleet Management.
An introduction to Spar Shipping AS was made by Capt. Pritish Deshpande. In his own words – “Spar Shipping are not asset players, but wholly focused on excellence and long term commitments. Recently introduced schemes onboard and ashore towards complimenting performances of their fleet would amply reflect this ethos which have been enthusiastically welcomed by all concerned .These are of course under constant review to revise as required.”
This was followed by a presentation on “Operational Excellence” by Gordon Johansen-Dahl, Bulk Handling AS. His talk centered on Voyage instruction, cargo intake, pre arrival planning, discharge from the vessel, quick cleaning methods and curtailing bunker losses. Capt. Per Erik Olsen, Bulk handling Handymax AS talked on “Operational Excellence”
An interesting session was conducted by Capt. M. Sathya, Manager, Quality & Safety Department, Fleet Management Limited, Hong Kong on “Obstruction of Justice and False Statements – How to Avoid them” False statement he stated is one which is false or misleading and which an individual knows or reasonably ought to know is false or misleading. He went on to give example to bring out lucidly the meaning of false and misleading statements. He mentioned the potential penalties in the U.S. for individuals and the do’s & don’ts in the event of an incident.
“Safety and productivity always run hand in hand and a safe ship is always a productive ship,” was maxim by which seafarers should abide by according to Capt. Anurag Sharma, Operations Superintendent, Ebony Ship Management Ltd, Delhi while presenting “Case Studies of Operational Losses”. Another aspect was presented by Trygve C Nokleby, GARD in his talk on “Risk Assessment & Safety Awareness”
A highlight in the various presentations was the one made on “Spar Fleet as seen from DNV (Overview of Class, ISM & PSC Results)” – By Mr. Oivind N. Braten & Capt Arvind Phatak, DNV Oslo
The speakers provided ample time for obtaining feedback from the participants and for interaction between ship owner and the floating staff. The two day seminar saw time for interaction and networking. There was time also for a cocktail dinner party which included a variety entertainment with a Goan Folk dance and music provided by a popular local band.
An Awards Night
During Cocktail-Dinner, a small Award ceremony was held to reward good work by floating staff. On this occasion, Best Master of the Year Award was presented to Capt Tushar Potey (vessel - Spar Draco). The award was collected on his behalf by Capt Santosh Pandey (Incharge – SPAR Cell, ESMIPL, Mumbai). Best Chief Engineer Award of the Year was presented to Mr. Clifford D’souza (vessel – Spar Two). A prize money of USD One Thousand was announced by Capt Pritish Deshpande for the award winners. Best Ship of the Year award was bestowed upon 1985 built laker vessel Spar Jade. This Award was collected by Capt Vinod Kumar / Chief Engineer- Mr. M. A. Thampi who had sailed on this vessel during year 2008.
Monday 19 January, 2009
Improved Medical treatment on board
Seafarers are among the most isolated demographic working groups in the world in relation to access to medical care, both in emergency situations and for primary health care. On a large, slow vessel in the middle of the Pacific, a seafarer may be several days away from quality medical services. But this is set to change soon.
Seafarers can now look forward to maintaining better health while at sea. In this regard the International Maritime Health Association (IMHA) has taken up the cause of Indian seafarers by helping to form the Maritime Health Assn of India which is now headed by Dr. Suresh Idnani, the incumbent president.
Recently, the Chief Medical Advisor to the U.K. Maritime and Coastguard Agency and Mr Tim Carter visited India to coordinate and inspect the facilities available in India. He said, “Some Indian ship owners that I have met are very concerned and active but some of the accounts I have had when meeting trade unions suggest that others may be uncaring. There are additional issues when seafarers are recruited here to work on ships of other flags and employers, agents, P and I clubs that set unrealistically high medical standards to exclude capable seafarers from work.”
According to him many ship owners take advantage of the facilities offered by IMHA. It is all that the seafarer or the union wants. “It is often cheaper and easier for employers to get the tests done,” he says. “If by saying that he does not want the tests he would actually be pushing the seafarer out of a job in case of an accident and often this would be permanently, when they apparently find the seafarer is not fit to work at sea.”
Tim Carter who is also the past president of the International Maritime Health Association (IMHA) met Shipping Today along with Dr. Idnani during his visit to Mumbai to discuss developments in seafarer medical fitness assessment with the maritime sector and to help organize the programme for the 10th International Symposium on Maritime Health to be held in Goa this September.
He indicated that it was now essential to base decisions about seafarers’ fitness at work on the best available evidence on risk rather than just on the medical opinion of the examining doctor. To be fair to seafarers and to employers the reason for fitness decisions needs to be clearly identified in advance. Standards should aim to ensure that health problems arising at sea do not endanger other seafarers, the vessel or the individual’s own prospects of safe and complete recovery.
Tim noted that, while everyone wanted seafarers to be healthy, the seafarers themselves did not want to be denied work unless there was a well defined reason for it. In contrast ship operators were primarily concerned to having their vessels operating efficiently and economically and as a result could all too easily decide to not engage anyone with any form of ill-health even if it was irrelevant to work at sea. At times unscrupulous medical examiners could conspire with this approach in return for the business operators provided to them.
Such problems may be solved by having a fair and transparent system of medical fitness assessment that is regulated and audited by the national maritime authority. Indeed this responsibility is being increasingly placed on authorities by the conventions from international agencies such as IMO and ILO.
Tim related his experience in revising and managing the medical standards system in Britain and also described the work he was doing with IMHA to assist IMO and ILO to develop a fair and consistent set of international standards.
Dr. Idnani informed that the International Committee on Seafarers’ Welfare (ICSW) and the International Maritime Health Association (IMHA) have come together to bridge the gap between seafarers’ welfare and seafarers’ health. Some of the planned initiatives are to ensure that the health and welfare of seafarers are safeguarded and improved and that there is effective dissemination of good practices and high quality information on health aspects for the seafarers’ welfare.
Other areas of work include the availability of the expertise and communication networks of both organisations to help out with the ongoing projects and programmes concerning and related to the health aspects of seafarers’ welfare. Yet another area of joint action is to foster the investigation of solutions to practical problems concerning seafarers’ health and welfare. Efforts are on to ensure that the members of both organisations and those they represent understand and work effectively together to improve the life of seafarers whether at sea or on shore. It is the necessity here to provide the framework for joint project work where this is both beneficial and cost-effective.
“There are absolutely high standards for doing the tests, providing the treatment and getting medical advice,” states Mr. Carter. “But people do get them because they know they don’t want to have their seafarers’ career to end abruptly. “
Before joining the ship all seafarers undergo the fitness medical tests to see that there is no disease. What is being relied on is the training given to officers and what they have to depend on when on the ship viz., proper medicine and equipment that needs to be made available in the medical chest. Besides, in many of countries seafarers can avail of the national radio medical advisory service.
On every ship an officer is trained and he is the second officer. But this also means the master and the chief mate too, have done the training and can provide treatment to the injured or the seafarer who is ill. In India the coast guards have started providing medical cover and medical advice through a designated officer.
“The medical equipment on the ship should be exactly what is used when designated officer was trained to use,” pointed out Mr Carter. “When seeking medical advice the first thing the medical advisor would like to know is what equipment and medicine is available on the ship. It is important to have the medical guide, medical stores and radio medical advise should be properly coordinated.”
The International Committee on Seafarers’ Welfare, aware of the importance of lifestyle aspect in the health of seafarers, has launched a project FIT ONBOARD as one of the topics in the Seafarers’ Health Information Programme, sponsored by the ITF Seafarers' Trust.
Seafarers can now look forward to maintaining better health while at sea. In this regard the International Maritime Health Association (IMHA) has taken up the cause of Indian seafarers by helping to form the Maritime Health Assn of India which is now headed by Dr. Suresh Idnani, the incumbent president.
Recently, the Chief Medical Advisor to the U.K. Maritime and Coastguard Agency and Mr Tim Carter visited India to coordinate and inspect the facilities available in India. He said, “Some Indian ship owners that I have met are very concerned and active but some of the accounts I have had when meeting trade unions suggest that others may be uncaring. There are additional issues when seafarers are recruited here to work on ships of other flags and employers, agents, P and I clubs that set unrealistically high medical standards to exclude capable seafarers from work.”
According to him many ship owners take advantage of the facilities offered by IMHA. It is all that the seafarer or the union wants. “It is often cheaper and easier for employers to get the tests done,” he says. “If by saying that he does not want the tests he would actually be pushing the seafarer out of a job in case of an accident and often this would be permanently, when they apparently find the seafarer is not fit to work at sea.”
Tim Carter who is also the past president of the International Maritime Health Association (IMHA) met Shipping Today along with Dr. Idnani during his visit to Mumbai to discuss developments in seafarer medical fitness assessment with the maritime sector and to help organize the programme for the 10th International Symposium on Maritime Health to be held in Goa this September.
He indicated that it was now essential to base decisions about seafarers’ fitness at work on the best available evidence on risk rather than just on the medical opinion of the examining doctor. To be fair to seafarers and to employers the reason for fitness decisions needs to be clearly identified in advance. Standards should aim to ensure that health problems arising at sea do not endanger other seafarers, the vessel or the individual’s own prospects of safe and complete recovery.
Tim noted that, while everyone wanted seafarers to be healthy, the seafarers themselves did not want to be denied work unless there was a well defined reason for it. In contrast ship operators were primarily concerned to having their vessels operating efficiently and economically and as a result could all too easily decide to not engage anyone with any form of ill-health even if it was irrelevant to work at sea. At times unscrupulous medical examiners could conspire with this approach in return for the business operators provided to them.
Such problems may be solved by having a fair and transparent system of medical fitness assessment that is regulated and audited by the national maritime authority. Indeed this responsibility is being increasingly placed on authorities by the conventions from international agencies such as IMO and ILO.
Tim related his experience in revising and managing the medical standards system in Britain and also described the work he was doing with IMHA to assist IMO and ILO to develop a fair and consistent set of international standards.
Dr. Idnani informed that the International Committee on Seafarers’ Welfare (ICSW) and the International Maritime Health Association (IMHA) have come together to bridge the gap between seafarers’ welfare and seafarers’ health. Some of the planned initiatives are to ensure that the health and welfare of seafarers are safeguarded and improved and that there is effective dissemination of good practices and high quality information on health aspects for the seafarers’ welfare.
Other areas of work include the availability of the expertise and communication networks of both organisations to help out with the ongoing projects and programmes concerning and related to the health aspects of seafarers’ welfare. Yet another area of joint action is to foster the investigation of solutions to practical problems concerning seafarers’ health and welfare. Efforts are on to ensure that the members of both organisations and those they represent understand and work effectively together to improve the life of seafarers whether at sea or on shore. It is the necessity here to provide the framework for joint project work where this is both beneficial and cost-effective.
“There are absolutely high standards for doing the tests, providing the treatment and getting medical advice,” states Mr. Carter. “But people do get them because they know they don’t want to have their seafarers’ career to end abruptly. “
Before joining the ship all seafarers undergo the fitness medical tests to see that there is no disease. What is being relied on is the training given to officers and what they have to depend on when on the ship viz., proper medicine and equipment that needs to be made available in the medical chest. Besides, in many of countries seafarers can avail of the national radio medical advisory service.
On every ship an officer is trained and he is the second officer. But this also means the master and the chief mate too, have done the training and can provide treatment to the injured or the seafarer who is ill. In India the coast guards have started providing medical cover and medical advice through a designated officer.
“The medical equipment on the ship should be exactly what is used when designated officer was trained to use,” pointed out Mr Carter. “When seeking medical advice the first thing the medical advisor would like to know is what equipment and medicine is available on the ship. It is important to have the medical guide, medical stores and radio medical advise should be properly coordinated.”
The International Committee on Seafarers’ Welfare, aware of the importance of lifestyle aspect in the health of seafarers, has launched a project FIT ONBOARD as one of the topics in the Seafarers’ Health Information Programme, sponsored by the ITF Seafarers' Trust.
Monday 12 January, 2009
Dredging commences at Port Pipavav GPPL to spend Rs 260 cr
In a significant development to enhance accessibility to the port, Gujarat Pipavav Port Limited has commenced dredging of 14.5 meters draft with an investment of INR 260 crore (approximately EUR 40 million) at the port, located in the state of Gujarat, 153 nautical miles northwest of Mumbai ports.
The dredging activity, which started at 1930 hours on January 3, 2009, is expected to be completed before monsoon this year and will enable port Pipavav as a safe port for even larger container vessels. With the dredging, the acceptance draught will be increased from 12.5 meters to 14.5 meters.
Commenting on the dredging activity, Mr Prakash Tulsiani - Interim CEO, Gujarat Pipavav Port Ltd said “With the deeper draft, Pipavav offers a safe port for the larger container vessels that cannot call at most of the other Ports in India. The port has road and rail connectivity, and the rail freight costs from our on-dock facility to the North Indian Inland Container Depots (ICDs) are lower and the current maximum capacity of the rail link is 22 trains per day in each direction”
“We will ensure minimal disruption to the vessel movements and cargo operations at the port during the activity”, added Mr. Tulsiani.
GPPL has entered into a contract with Zinkcon Marine (Singapore) Pte Ltd, a subsidiary of Royal Boskalis Westminster to undertake capital dredging to increase the acceptance draught from 12.5m to 14.5m.
Speaking about the efforts to port’s continued development, Mr. Tulsiani said, “We are strongly committed to investment and growth in the port.
Port Pipavav is a preferred gateway to New Delhi and other markets in north-western India that allows shippers an alternative to the traditional routing via the congested infrastructure around Mumbai.
Famous Pacific Shipping builds stronger presence in Australia
Famous Pacific Shipping continues to build its presence in the important Australian market through a range of strategic investments and planning decisions that will see the global freight forwarding group ratchet up the pressure on the competition.
Not least among these developments has been a recent multi-million dollar investment by Famous Pacific Shipping (Vic) Pty Ltd in a new, high-spec warehouse and office building in Melbourne, accompanied by the launch of a road haulage subsidiary.
Famous Pacific Shipping (Vic) is celebrating the commissioning of a new, purpose-built warehouse and office complex that is truly 21st century in its facilities and engineering. As well as offering 484 sq m of office space, the 1,200 sq m of warehousing is kitted out with the latest in racking and storage equipment, enabling FPS to provide full logistics capabilities through Melbourne.
According to Sam Aparo, Director, Famous Pacific Shipping (Vic) Pty Ltd, the advantages of the facility do not stop on the inside. “The facility also offers 1,600 sq m of hard-standing outside which complements the assets on the inside.
“Our customers will also benefit from the fact that the facility is fully Australian Customs bonded, which allows importers to obtain first-rate storage as they bring goods to this dynamic and attractive market,” he says.
Famous Pacific Shipping (Vic) Pty Ltd has a full range of Australian regulatory licenses to offer services to the widest possible range of import and export activity. The company has Customs Bond 77G for sea and air cargo. The facility is a Quarantine Class 1.3 premises; and also an Australian Quarantine and Inspection Service (AQIS) Dairy Establishment. The site is also approved for FCL and LCL fumigation, a key requirement of entry for cargo into Australia.
If that was not enough of an increase in Famous Pacific Shipping (Vic)’s customer offering, the company has also hit the road with a new business arm.
“In Melbourne, we’ve launched FPS Transport as a separate haulage company to offer our own domestic collection and distribution service with a side-lift lorry and a taut-line for LCL shipments,” says Mr Aparo,
“The service will allow our customers to keep their transport in-house with us and not have to turn to third party trucking companies. This acts as a guarantee that the clients will enjoy the same high quality of FPS service on the road as they enjoy at the depot. Our intention is to ultimately have a fleet of vehicles. Launching this new service on the back of our innovative new warehousing facility guarantees its success. It is a neutral operation and serves other freight forwarders.”
In Australia, the Famous Pacific Shipping network includes freight hubs in Brisbane, Fremantle, Melbourne and Sydney. The company’s service portfolio includes door-to-door sea and airfreight services, local transportation and distribution, Customs clearance, specialist automotive transportation, warehousing, project cargo management and logistics.
The dredging activity, which started at 1930 hours on January 3, 2009, is expected to be completed before monsoon this year and will enable port Pipavav as a safe port for even larger container vessels. With the dredging, the acceptance draught will be increased from 12.5 meters to 14.5 meters.
Commenting on the dredging activity, Mr Prakash Tulsiani - Interim CEO, Gujarat Pipavav Port Ltd said “With the deeper draft, Pipavav offers a safe port for the larger container vessels that cannot call at most of the other Ports in India. The port has road and rail connectivity, and the rail freight costs from our on-dock facility to the North Indian Inland Container Depots (ICDs) are lower and the current maximum capacity of the rail link is 22 trains per day in each direction”
“We will ensure minimal disruption to the vessel movements and cargo operations at the port during the activity”, added Mr. Tulsiani.
GPPL has entered into a contract with Zinkcon Marine (Singapore) Pte Ltd, a subsidiary of Royal Boskalis Westminster to undertake capital dredging to increase the acceptance draught from 12.5m to 14.5m.
Speaking about the efforts to port’s continued development, Mr. Tulsiani said, “We are strongly committed to investment and growth in the port.
Port Pipavav is a preferred gateway to New Delhi and other markets in north-western India that allows shippers an alternative to the traditional routing via the congested infrastructure around Mumbai.
Famous Pacific Shipping builds stronger presence in Australia
Famous Pacific Shipping continues to build its presence in the important Australian market through a range of strategic investments and planning decisions that will see the global freight forwarding group ratchet up the pressure on the competition.
Not least among these developments has been a recent multi-million dollar investment by Famous Pacific Shipping (Vic) Pty Ltd in a new, high-spec warehouse and office building in Melbourne, accompanied by the launch of a road haulage subsidiary.
Famous Pacific Shipping (Vic) is celebrating the commissioning of a new, purpose-built warehouse and office complex that is truly 21st century in its facilities and engineering. As well as offering 484 sq m of office space, the 1,200 sq m of warehousing is kitted out with the latest in racking and storage equipment, enabling FPS to provide full logistics capabilities through Melbourne.
According to Sam Aparo, Director, Famous Pacific Shipping (Vic) Pty Ltd, the advantages of the facility do not stop on the inside. “The facility also offers 1,600 sq m of hard-standing outside which complements the assets on the inside.
“Our customers will also benefit from the fact that the facility is fully Australian Customs bonded, which allows importers to obtain first-rate storage as they bring goods to this dynamic and attractive market,” he says.
Famous Pacific Shipping (Vic) Pty Ltd has a full range of Australian regulatory licenses to offer services to the widest possible range of import and export activity. The company has Customs Bond 77G for sea and air cargo. The facility is a Quarantine Class 1.3 premises; and also an Australian Quarantine and Inspection Service (AQIS) Dairy Establishment. The site is also approved for FCL and LCL fumigation, a key requirement of entry for cargo into Australia.
If that was not enough of an increase in Famous Pacific Shipping (Vic)’s customer offering, the company has also hit the road with a new business arm.
“In Melbourne, we’ve launched FPS Transport as a separate haulage company to offer our own domestic collection and distribution service with a side-lift lorry and a taut-line for LCL shipments,” says Mr Aparo,
“The service will allow our customers to keep their transport in-house with us and not have to turn to third party trucking companies. This acts as a guarantee that the clients will enjoy the same high quality of FPS service on the road as they enjoy at the depot. Our intention is to ultimately have a fleet of vehicles. Launching this new service on the back of our innovative new warehousing facility guarantees its success. It is a neutral operation and serves other freight forwarders.”
In Australia, the Famous Pacific Shipping network includes freight hubs in Brisbane, Fremantle, Melbourne and Sydney. The company’s service portfolio includes door-to-door sea and airfreight services, local transportation and distribution, Customs clearance, specialist automotive transportation, warehousing, project cargo management and logistics.
Ship breaking to hit speed breaker
How long can the boom time being experienced by the ship breaking industry last? Not very long according to those in ship breaking! Everything seems to be going in their favour. The recession in the economy has been serving as a driver to enhance availability of ships to be scrapped. Many old ships are being retired and being taken out for scrapping. Besides, the supply of new ships in the global market too is seeing old vessels getting scrapped. But the government is hell bent on bringing in a new regulation which could well bring down the shutters on the ship breaking industry in India.
Confirming the explosive upsurge Mr Pravin S Nagarsheth, president, Iron Steel Scrap & Shipbreakers Association, India, stated that there were over 80 ships being demolished at the Alang ship breaking yard. “In November last year the total number of ships beached at the scrap yard came to 1.6 lakhs light displacement ton (LDT),” he said. “But in December 2008 this number shot up to 2.29 lakh LDT. While in 2007 the total beaching touched 5 lakhs LDT, in this current fiscal we have already crossed 9 lakhs LDT and expect to exceed 12 lakh LDT by March 2009.”
Excepting tankers all types of vessels are being brought in for demolition. According to reports the boom extends even to Bangladeshi ship breaking yards where more such activity exists. “Due to the fall in steel prices, China, a smaller player, too has come into the market,” informed Mr Nagarsheth. “Although Alang could continue to grow within the next three years and also help the entire ship breaking industry in India, there is the doom’s day threat looming large over this industry. A new government regulation is being introduced wherein certification by the Bureau of Indian standard on all steel products will be made mandatory. This would include even the recycled steel viz. re-rollable steel. If this regulation is enforced, our industry would head for closure.”
It has been a long drawn out struggle for the ship breaking industry in India to acquire recognition. The industry was assailed by Green Peace activists and subjected to a number of court cases. In the international arena ship breakers were being cornered out by ship owners while conventions were being framed by international organisations for ship recycling. Now that the International Maritime Organisation (IMO) and the Indian Supreme Court are engaged in preparing guidelines for the ship breaking industry, the government of India appears to have come forward to claim its pound of flesh.
According to a spokesman for ship breakers the imposition of BIS certification is being pressed ahead by the steel ministry with the result once the regulations come into force no steel will be allowed to be sold, marketed or manufactured in the country without the BIS certification.
“Qualitywise we are much better off and the re-rollable steel generated by our industry is of high quality,” contends Mr Nagarsheth. “But for obtaining BIS certification the entire system for obtaining licence, conducting inspection, testing and complying with the procedures is neither feasible nor practical.
“The notification has already been issued in November of 2007 and the last date for implementation is 16th February 2009. There is a tussle between the major producers and the suppliers of the secondary steel market because of which this law is being brought into force merely to please the few major producers numbering about seven to eight in order to wipe out competition from other suppliers and to encourage them to have a monopoly.”
On the other hand imported steel is almost banned, since it has been placed in the negative lists of imports and is put under the licensing procedure. Hence the entire import is almost closed. Besides, second hand steel is not permitted to be imported. If the prime material has to be imported from anywhere in the world the overseas manufacturers have to first register themselves in India, even though the quantity to be imported into India is minuscule. In such a situation how many manufacturers can possibly register themselves in India is a debatable point.
Though there is a crash in prices of ships sold as scrap, yet more of the vessels are being found fit only for the scrapyard with the shipping industry in a crisis. Ship breakers earn around Rs 5,000 per ton of scrap with steel prices plummeting from Rs 32,250 a ton to just Rs 15,000 in six months. In June this year, the price of steel was Rs 33,500 per ton, but it is now down to Rs 20,000, giving breakers a margin of Rs 5,000 per ton.
As it happens there being more than 850 ships available for breaking in the international market. If all goes well, Alang could sell 2.5 million tonnes of scrap in 2009 valued at Rs 5,000 crore, as against its capacity of 4 million tonnes per annum. If margins remain the same, this would mean a cool profit of Rs 1,250 crore.
About 90% of the world’s ship breaking industry is based in Asian countries including India, Bangladesh, China, Pakistan and Turkey. The initiative which Indian ship breakers have acquired could well be lost to other countries. Bangladesh has already surpassed India. Good times which had finally made a come back could well be lost forever. What exactly is the reason for the Indian government to take this foolhardy step of insisting on imposing BIS certification on all steel goods? Why does the ministry hell bent on closing down one industry merely to benefit another?
Confirming the explosive upsurge Mr Pravin S Nagarsheth, president, Iron Steel Scrap & Shipbreakers Association, India, stated that there were over 80 ships being demolished at the Alang ship breaking yard. “In November last year the total number of ships beached at the scrap yard came to 1.6 lakhs light displacement ton (LDT),” he said. “But in December 2008 this number shot up to 2.29 lakh LDT. While in 2007 the total beaching touched 5 lakhs LDT, in this current fiscal we have already crossed 9 lakhs LDT and expect to exceed 12 lakh LDT by March 2009.”
Excepting tankers all types of vessels are being brought in for demolition. According to reports the boom extends even to Bangladeshi ship breaking yards where more such activity exists. “Due to the fall in steel prices, China, a smaller player, too has come into the market,” informed Mr Nagarsheth. “Although Alang could continue to grow within the next three years and also help the entire ship breaking industry in India, there is the doom’s day threat looming large over this industry. A new government regulation is being introduced wherein certification by the Bureau of Indian standard on all steel products will be made mandatory. This would include even the recycled steel viz. re-rollable steel. If this regulation is enforced, our industry would head for closure.”
It has been a long drawn out struggle for the ship breaking industry in India to acquire recognition. The industry was assailed by Green Peace activists and subjected to a number of court cases. In the international arena ship breakers were being cornered out by ship owners while conventions were being framed by international organisations for ship recycling. Now that the International Maritime Organisation (IMO) and the Indian Supreme Court are engaged in preparing guidelines for the ship breaking industry, the government of India appears to have come forward to claim its pound of flesh.
According to a spokesman for ship breakers the imposition of BIS certification is being pressed ahead by the steel ministry with the result once the regulations come into force no steel will be allowed to be sold, marketed or manufactured in the country without the BIS certification.
“Qualitywise we are much better off and the re-rollable steel generated by our industry is of high quality,” contends Mr Nagarsheth. “But for obtaining BIS certification the entire system for obtaining licence, conducting inspection, testing and complying with the procedures is neither feasible nor practical.
“The notification has already been issued in November of 2007 and the last date for implementation is 16th February 2009. There is a tussle between the major producers and the suppliers of the secondary steel market because of which this law is being brought into force merely to please the few major producers numbering about seven to eight in order to wipe out competition from other suppliers and to encourage them to have a monopoly.”
On the other hand imported steel is almost banned, since it has been placed in the negative lists of imports and is put under the licensing procedure. Hence the entire import is almost closed. Besides, second hand steel is not permitted to be imported. If the prime material has to be imported from anywhere in the world the overseas manufacturers have to first register themselves in India, even though the quantity to be imported into India is minuscule. In such a situation how many manufacturers can possibly register themselves in India is a debatable point.
Though there is a crash in prices of ships sold as scrap, yet more of the vessels are being found fit only for the scrapyard with the shipping industry in a crisis. Ship breakers earn around Rs 5,000 per ton of scrap with steel prices plummeting from Rs 32,250 a ton to just Rs 15,000 in six months. In June this year, the price of steel was Rs 33,500 per ton, but it is now down to Rs 20,000, giving breakers a margin of Rs 5,000 per ton.
As it happens there being more than 850 ships available for breaking in the international market. If all goes well, Alang could sell 2.5 million tonnes of scrap in 2009 valued at Rs 5,000 crore, as against its capacity of 4 million tonnes per annum. If margins remain the same, this would mean a cool profit of Rs 1,250 crore.
About 90% of the world’s ship breaking industry is based in Asian countries including India, Bangladesh, China, Pakistan and Turkey. The initiative which Indian ship breakers have acquired could well be lost to other countries. Bangladesh has already surpassed India. Good times which had finally made a come back could well be lost forever. What exactly is the reason for the Indian government to take this foolhardy step of insisting on imposing BIS certification on all steel goods? Why does the ministry hell bent on closing down one industry merely to benefit another?
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