SCI set to buy three container ships for $225 million

SCI plans to purchase three new container vessels along with its existing joint venture partner Mediterranean Shipping Company

State-run Shipping Corporation of India (SCI) plans to acquire three new container ships in the New Year, and has set aside $200 million-$225 million to fund these purchases, a top company official said.

"SCI plans to purchase three new container vessels, along with its existing joint venture partner Mediterranean Shipping Company (MSC). These (orders) will be executed after securing the necessary Board approval," a senior SCI official told PTI.

Presently, SCI has a total fleet strength of 76, which includes five container vessels.

The shipping major decided to strengthen its fleet strength taking into account a visible pick-up in trade volumes in the recent past, the official said.

"We have seen a significant pick-up in volumes in the recent past, on account of the recovery in the domestic and global markets. Volumes are expected to pick up further in the months ahead," the official said.

Reflecting the recovery and the corresponding revival in the export trade from Europe to Asia, shipments in the Europe-Asia trade route increased by 12.6% in October to 4,64,689 twenty-foot equivalent units (TEUs), from 4,13,249 TEUs a year ago.

“In the long term, there is a huge potential in this business. The recovery in freight rates is most notable on the Asia-Europe routes, with all container routes showing signs of improvement," the official said.

A decline in vessel prices in the past few months could also facilitate the corporation to acquire more vessels in the near future, the official said, without giving further details.

However, SCI and its Geneva-based JV partner, MSC, have not decided on whether the latter will co-fund the proposed acquisitions of three container vessels, the official said.

In May, SCI had entered into an agreement with MSC to run its European service. "The discussions with our JV partner are on and it is too early to comment on the matter," the official said.

Presently, the five container vessels of the corporation cover the Far-east, China, UK and the Middle-east. The Middle-east covers Jebel Ali and operations in all the upper Gulf regions.

SCI also operates its feeder cargo vessels on the west coast of the country, besides operating Indian coastal cargo vessels in the coastal regions, pan-India.

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