Essar Shipping set to buy four second-hand Panamax vessels

By Curious

Essar Shipping, India’s second largest private shipping company, is in process of buying 4 second-hand Panamax vessels at an estimated cost of R200 crore to cater to growing cargo requirement at the Hazira Steel plant. Essar Shipping, India’s second largest private shipping company, is in process of buying 4 second-hand Panamax vessels at an estimated cost of R200 crore to cater to growing cargo requirement at the Hazira Steel plant.

Essar Shipping, India’s second largest private shipping company, is in process of buying 4 second-hand Panamax vessels at an estimated cost of R200 crore to cater to growing cargo requirement at the Hazira Steel plant.

Essar Shipping set to buy four second-hand Panamax vessels

“The acquisition is in line with company’s strategy to meet increased demand of iron ore at the Hazira steel plant, which gets supplied from the Paradip and Vizag ports on the East coast,” sources close to development told FE.

“The company expects the deliveries of vessels to start in the second quarter of financial year 2017-18 if prices are attractive and financing gets tied up in time. Shipping finance is a real challenge both in domestic and international market despite asset prices being at historically low level. They are also keeping their option open to in-charter vessel for long term (3 to 5 years) with option to purchase by end of charter period,” sources said.

The new ships with a tonnage of 75,000 tonnes each, will transport iron ore, coal and limestone for export and captive shipments of Essar Steel.

When contacted the company spokesperson declined to comment on the development.

“It is aimed to use the vessels mainly for domestic shipments , however export shipments are also kept as option,” the official said.

The vessels are customized to dock at Paradeep Port, which have shorter berths and where Essar Port operates a 16 million tonne dry bulk terminal.

It will also improve the turnaround time of vessels from the Paradip and Vizag Port as Panamax vessels are smaller in size and reduce the downtime at the ports.

The purchase of these Panamax vessels will increase the total tonnage Essar shipping to 1.75 mn tonnes from 1.6 million tonnes, while the fleet size will increase to 18 from 14 at present.

Essar Shipping’s existing fleet consists of very large crude carriers, capesize vessels, mini cape bulk carriers, supramaxes, and handy-sizes to provide crude oil and bulk commodity transportation services.

Source: The Financial Express