The Shipping Corporation of India has decided to shelve its plans of having shipyards due to an unfriendly business environment.
"Shipbuilding companies have no orders at present since the market is down and so it makes no sense to get into this business right now," Chairman B K Mandal said on the sidelines of the company's 63rd annual general meeting on Tuesday.
"Presently, we have no plans to go for shipyards," said Mandal, also managing director and director (finance). Regarding purchase of vessels as part of its old order, he said the company would be taking delivery of two vessels, mostly in the current financial year of the total 15 vessels it has ordered.
For the two vessels to be bought, Shipping Corp of India will be spending Rs 1900 crore.
So far since April, the company has not taken delivery of any vessel, said the chairman.
The chairman also said that the market value of the company's assets has gone down in the last couple of years mainly due to the recession and that he is hopeful that sentiment will improve.
The company was unable to pay any dividend to its shareholders for the year ended March due to its poor performance during the year.
"Between 2002-2003 and 2010-2011, the company has paid an average dividend of 83 percent," Mandal told his disappointed shareholders at
the meeting. Once the business picks up, the company's perfomance will imrpove, he said without giving a specific timeline as to when he sees sentiment turning positive.
The company's offshore business has been doing well said the chairman but the tanker segment has taken a hard hit and it is this business that contributes around 50 percent to the bottomline.
"We plan to focus more on the gas transportation business hereon from oil at present," he said.