The Hindu Business Line : India Steamship optimistic about growth prospects

INDIA Steamship Company (ISS) of the K.K. Birla Group hopes to wipe out its accumulated loss, amounting to more than Rs 18 crore within the next three years, according to its Managing Director, Mr Ashok Kak.

Mr Kak bases his hopes on the booming freight market, particularly tanker freight, and the probable continuation of it for the next few years. "The tanker freight market is currently in the midst of a buoyant cycle of growth and we are confident that it will continue in the short-term and optimistic about the medium-term and long-term prospects," he observed while talking to newsmen at the end of the company's annual general meeting here on Thursday.

"If the present trend persists, hopefully, our books will be clean by 2007-08," he said. By 2010, phasing out of single hull would be complete world over and there would be balancing, he added.

ISS, the Managing Director indicated, was now engaged in drawing up a long-term business plan whose focus would be on building up capacity for transportation of crude.

"The plan is to achieve one million dead weight tonnes threshold over the next eight years as compared to 249,678 dwt at present," he said. Right now the company's fleet consisted of three vessels, all crude carriers, with the third one, "Ratna Urvi", a 96,088-dwt Aframax, due for delivery next month.

By 2011, the ISS fleet would consist of seven to eight vessels, mostly crude tankers. "True, we have plans also to acquire one product tanker (50,000 dwt) and a bulk carrier (most probably a Capesize) but the accent will be on the acquisition of crude tankers including Aframax and even a very larger crude carrier," he said.

By that time, one of the existing tankers, "Ratna Abha" (60,725 dwt) would be due for scrapping, he said. The fund of the proposed acquisition would be partly by way of internal generation and partly borrowing.

"Ratna Urvi", 1989 Japanese built, cost the company $17 million funded again partly by internally and partly loans, he added.

The country's oil sector, according to Mr Kak, was expected to import about 100 million tonnes of crude every year for next 15-18 years.

"The company has positioned itself as one of the transporters of this cargo and will at the same time engage itself in the worldwide transportation wherever opportunities arise," he said.

In first quarter of the current year, both "Ratna Abha", engaged in cross trading, and "Ratna Shalini" (89,960 dwt), on charter with Great Eastern Shipping, performed ahead of the objectives.

Soon after acquisition, "Ratna Urvi" would undergo special survey and dry dock maintenance to enable it to operate uninterrupted over three years from October 2004.

Similarly, "Ratna Shalini" too would go for intermediate survey in November to enable to operate uninterrupted for next two years, Mr Kak added.