September 06, 2008

Shipping ministry to retain HSL brand for another shipyard

While the shipping ministry might have to transfer Visakhapatnam based Hindustan Shipyard Limited to the defense ministry, following a Group of Ministers’ recommendation, it is learnt that it may retain HSL as a brand name for new shipyard.

This is because the Group of Ministers’ that recommended the transfer of HSL to the defense ministry for strategic reasons also suggested that the Government set up another shipyard for merchant shipbuilding purposes and the HSL brand can be used for the new shipyard. However, finer details of the new shipyard are yet to be firmed up.

The HSL restructuring cum revival proposal, proposed at a cost of about INR 799.61 crore, was referred to a GoM by the union cabinet, given Indian Navy’s strategic interests in the region around Visakhapatnam.

HSL had been in financial crisis for many years due to several factors that include poor order-book position, lack of working capital, managerial inadequacies and inability to raise funds from financial institutions due to negative net worth. But, driven by the recent surge in the shipping industry, the order books of all shipyards in India, including HSL, have swelled.

At present, the defense ministry has 3 shipyards in India namely Mazagaon Dock Limited, Garden Reach Shipbuilders & Engineers Limited and Goa Shipyard Limited. Meanwhile, the shipping ministry has 3 shipyards in its fold HSL at Visakhapatnam; Cochin Shipyard Limited at Cochin and Hooghly Dock and Port Engineers Limited.