The Hindu Business Line : HSL waiting for second wind: CMD

The Visakhapatnam-based Hindustan Shipyard Limited (HSL) has vastly improved its performance, and is awaiting the Central revival package to sustain the growth, according to its Chairman and Managing Director, Rear Admiral Ajit Tewari.

He told Business Line: "There was a time two or three years ago when very few believed that the yard could be turned around and there was widespread scepticism regarding its potential and future. But the sceptics have been proved wrong. Given a chance, the HSL can establish itself as a profit-making yard."

He said that in 2005-06 HSL had made "a net proftt of Rs 6.5 crore after years of losses." He said the turnover had rapidly increased from Rs 127 crore in 2003-04 to Rs 237 crore in 2004-05 and then to Rs 318 crore during 2005-06. "We have orders worth Rs 1,400 crore and it is a good time to build ships. But we are bogged down by accumulated losses. If the revival package is announced, and our net worth improves, we can obtain loans from banks and go ahead aggressively in accepting and executing orders," he said.

Chennai orders

Recently, the Rear-Admiral said, HSL had delivered a vessel to the National Institute of Ocean Technology, Chennai, and work was on the bulk carriers to be delivered to the Chennai-based Goodearth Maritime Limited. "The first vessel is to be delivered in October and then the rest. We are building 30,000-DWT vessels and 53,000-DWT vessels for them. This order, worth Rs 900 crore, has given a shot-in-the-arm to the yard. We are striving hard to meet the delivery schedules and improve our image in the market as a reliable yard."

Rear-Admiral Tewari said HSL was also building 100 passenger ships for the Andaman and Nicobar Administration and ship repairs were also being undertaken on an impressive scale. In 2005-06, he said, HSL had repaired 35 ships and earned Rs 90 crore. This year, the amount could easily exceed Rs 100 crore.

VRS package

He said a VRS package was in the offing for the workers at a cost of Rs 60 crore to be borrowed from banks.

The workforce at the yard was 3,500 and it would go down by 500-600. The average age of the workforce was 50 years, he said.

On the present position of the revival package, he said the Union Ministry of Shipping would have to send it to the Union Ministry of Finance.

"We have to go a long way to place the yard on an even keel. We have to replace the obsolete machinery and further consolidate our position in the market. The key is, of course, to improve productivity. We have made impressive strides during the past two years."