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SCI net rides wave of freight boom — Touches all-time high of Rs 626 crore

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Mr P. K. Srivastava (left), CMD, Shipping Corporation of India Ltd, with Mr R.K. Mitra, Director (Bulk Division ), at a press conference in Mumbai on Wednesday. - Paul Noronha

Mumbai , June 30

DOMESTIC shipping companies have reaped the maximum benefits from the the freight market boom last fiscal, but what state-owned Shipping Corporation of India (SCI) achieved could well be a landmark in the company's history.

Notching up a 128 per cent increase in net profit to touch an all-time high of Rs 626.99 crore last fiscal, which is the highest in the history of Indian shipping, SCI has laid the foundation for a "more secure future."

Riding on the crest of a buoyant freight market coupled with delivery of four newly built ships, SCI recorded a total income of Rs 3,166.71 crore during the year, as against Rs 2,446.50 crore in the previous year. The company could sharpen its profitability by reining in expenditure, which increased from Rs 1,986.15 crore in 2002-03 to a healthy Rs 2,178.17 crore last fiscal.

The bulk segment contributed a bulk of the income for the company; the sector brought in Rs 2,292.88 crore for the company (Rs 1,649 crore). With the acquisition of three Aframax tankers and one Suezmax tanker, the company's fleet strength during the fiscal rose to 87 vessels, aggregating 4.62 million dwt.

Talking to presspersons after its board meet, Mr P.K. Srivastava, SCI Chairman and Managing Director, said in the current fiscal, the company would place orders for two cape size carriers, two VLCCs (Very Large Crude Carriers) and six bulk carriers, involving an estimated outlay of $450 million.

On the company's future plans, Mr Srivastava said SCI was looking to sharpen its focus on certain niche areas. "As part of this initiative, we are seriously thinking of diversifying into container terminal operations. We are in talks with some foreign terminal operators to form a joint venture and bid for the fourth container terminal project at the Jawaharlal Nehru port," he said.

According to him, getting into terminal operations was a logical step towards diversification, as almost all major container lines have forayed into this sector. Moreover, land-based operations (such as container terminal operation) offered broader margins compared to sea-link operations, he pointed out. "We will be ready with the consortium as and when JNPT invites bids for the fourth container terminal," he added.

SCI, which had in the past attempted to get into terminal operations by teaming up with United Liner Agency for the Mumbai container terminal, at present offers international mainline container services in consortium with other global liner companies. Foraying into terminal operations would mean an extension of its present services in the container segment.

The other niche areas that SCI will be consolidating its presence include LNG transportation and the break-bulk segment. "Our objective is to become an Indian MNC in the shipping world. We will also be looking for more cross-trade, as shipping is truly a global market," the SCI chief said.

On liner trade, he said the board has decided to continue in this segment, although it is not a comparatively profit-making sector, mostly because of its social responsibility.

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