Tata-NYK shipping JV plans to double its fleet by 2014
Tata NYK Shipping Pte Ltd, a 50:50 joint venture set up by Tata Steel Ltd and Japan’s NYK Line Ltd, is reportedly planning to more than double its fleet to 30 ships by 2014 to meet rising demand for coal and iron ore in India. “In the next 3-4 years, Tata NYK has a plan to increase its fleet size to 30 vessels including 16 owned ships,” an unnamed company executive was quoted as saying. Large dry bulk carriers will account for as much as 70% of the planned fleet expansion, with smaller capacity vessels accounting for the balance. Tata NYK runs a fleet of 14 dry bulk cargo ships of various capacities, two of which are owned while the others have been hired from the market. At current prices, the 16 new ships will cost about $750 million (Rs.33.82 billion) to build, according to shipping industry executives. The JV was formed in 2007 to move raw materials and finished steel for the Tata group and to allow it gain strategic control over logistics. It also services other customers. Ships owned by Tata NYK will be registered in Singapore. The city-state is seen by fleet owners as an ideal location to own and operate ships given the conducive fiscal regime prevailing there.
Indian imports of coal may jump nearly seven-fold to 200 million tonnes (mt) a year by 2015 as the growing economy drives demand for metal and electricity. India’s steel consumption may also surge 14% next year, compared with a 3.5% increase in China and a decline in Japan, according to the World Steel Association. It estimates that India will likely use 68 mt of steel next year, compared with 599 mt in China, the world’s largest steel consumer, and 62 mt in Japan. Seaborne trade in iron ore and coal to make steel and generate power will rise 10% this year, according to London-based Clarkson Plc.
India, the third largest iron-ore exporter, may also become a net importer, as domestic firms buy overseas mines to secure adequate supplies. NMDC Ltd, India’s biggest iron-ore producer, plans to buy a mine in Australia, its first overseas acquisition. State-run coal companies including Coal India Ltd, the world’s biggest producer of the fuel, are looking to buy mines in South Africa, Botswana and Mozambique to bridge a domestic supply crunch.