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Shipping Corporation of India to invest Rs 1,900 crore on new ships this fiscal

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State-run Shipping Corporation of India today said it will invest Rs 1,900 crore on vessel purchases during 2013-14 as part of its asset acquisition programme. "We will be investing Rs 1,900 crore in financial year 2013-14. We have a pending order of 15 vessels and hope to take deliveries of at least two during the year," Shipping Corporation of India (SCI) Chairman and Managing Director B K Mandal told reporters here.

This is part of the company's ongoing vessel acquisition programme as it has not ordered any new ship in the last two years, when it was in the red, he said. Speaking on the sidelines of the company's Annual General Meeting here, Mandal said the shipping yards with whom the orders have been placed are facing issues, just like the shipping industry and hence, deliveries are delayed.

SCI, which reported a loss of Rs 114 crore in the previous fiscal, continues to face tough times due to supply glut and this fiscal will also be difficult even though global analysts had said the industry will recover in FY 2014, he said. Of the multiple verticals which the company is present in, only the offshore unit is making profits while in some others, the ongoing rates are not even sufficing for the costs, he added. Mandal said the vessel acquisition exercise of the past five years is hurting its profitability as the newer ships are resulting in higher depreciation while the newer borrowings are resulting in an interest outgo.

When asked about its diversification plans, Mandal said the ongoing turmoil in the shipping industry has forced it to shelve plans of entering the ship building business. "There are no plans to enter the shipyard business. You can see that all those who are present are suffering," he said.

Mandal also denied reports that SCI was going the Air India way and stressed the company's troubles emanate from the subdued global scenario, saying that the fortunes will turnaround with a change in the overall economic climate.

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