Background:

Shipbuilding (encompassing shipyards, the marine equipment manufacturers and a large number of service and knowledge providers) is an important and strategic industry in a number of countries around the world. This importance stems from the fact a nation's need to manufacture and repair its own Navy and vessels that support its primary industries. This presents a brief overview of the shipbuilding industry in India and the possible challenges and opportunities that Indian companies could enjoy in the future.

The Uniqueness of Shipbuilding sector:

The shipbuilding industry has its own distinctive feature as compared to other industries in the country. It is unique in a way that it has to sell first and construct later, unlike the auto industry or others, where one manufactures first and sells later. Further shipyards get orders only if they are credible (deliver quality ships on time) and it can be credible only after successfully executing consistently under international competition. Further, subjoined, it has to be globally competitive against the best yards in the world. Unfortunately, the shipyards are faced with very stiff taxes, tariff, duties, and financing charges as compared to foreign yards. The deliverables of the sector involves long gestation periods and requires high cost finances over a long period.

Global Shipbuilding industry:

Shipbuilding is a global industry with China, South Korea and Japan controlling 78% of the world market though modern ship building, as defined in the contemporary world, evolved in Europe. The increasing wage structures in Japan and South Korea are increasingly leading to the emergence of China, India and Taiwan as the other leading ship building nations. Japan, although no longer considered a low cost producer, is expected to continue to dominate the world market due to larger scale automation and robotization in its shipyards.

Global Scenario:
Globally shipbuilding is a USD 20 billion industry. The global shipbuilding order book recorded a 29% CAGR over the period of 2003 06. An upward trend has been witnessed in the world order book as a percentage of world fleet indicating a strong demand outlook. Fortunes of shipping and shipbuilding industries seem to be linked to each other or at least move in tandem. For nearly three decades in the post World War II era, both the industries were dominated by European nations and United States. Historically, shipbuilding industry suffered from the absence of global rules and a tendency of over-investment due to the fact that shipyards offer a wide range of technologies, employ a significant number of workers and generate foreign currency income (as the shipbuilding market is dollar-based and a global one). However, high labour costs in the yards of Europe and USA, one of the major determinants in this cost competitive industry, has led to a gradual shift of the center of shipbuilding to these Asian nations over the last two decades. Today shipbuilding has become an attractive industry for developing nations. Japan used shipbuilding in the 1950s and 1960s to rebuild its industrial structure, Korea made shipbuilding a strategic industry in the 1970s and China is now in the process to repeat these models with large statesupported investments in this industry. The tidal shift in shipbuilding activities, from Europe to Asia, has opened up huge opportunities for Indian yards, and both public and private shipbuilders are capitalizing on them.

The Indian Scenario:

India is traditionally a maritime nation and has a rich maritime heritage. History documents trade links of India had with other nations of the world from the ages of Harappan civilization. The India enjoys a long coastline of more than 7,500 km long with several deep water ports serving as good locations for setting up shipyards and 97% of global trading by volume is through sea. Ports & Shipping forms the integral part of the maritime sector contributes greatly to the economic growth of the country. India is competing for a share in the global ship building market space. With 100% FDI in Indian ship building sector and growing competitive pressures to expand capacities across geographies by harnessing local advantages,

India has all leverage to bag its legitimate share of maritime sector in Shipbuilding industry. With global shipping industry pitching for an unprecedented demand for new shipbuilding, a window of opportunity which was not available earlier has been created for the Indian shipbuilding industry.

Tracking Indias performance:

India has 23 shipyards, of which 7 are under administrative control of the central government, 2 with state governments, and the rest in the private sector. The current shipbuilding capacity of India is only 2,81,000 DWT, which is quite undersized according to global shipbuilding standards, and inadequate given the country's requirements. A comparison of productivity shows that while China may be well ahead of India in total ship building, its productivi ty is almost the same as India and this is one area that India can take a lead on the strength of its IT industry and setting up new modern shipyards.

Country Japan (2004) Korea (2004) China (2004) India (2006)

Completions M DWT 23.2 80,000 23 71,800 8.8 158,000 0.6 12,000

Employees Productivity DWT Person 290 320 56 50

China has been gaining almost 2% of the worlds share every year. India has a lot of catching up to do.

Leveraging labour cost advantage:

In India, labour cost per worker per year of USD 1,192 is very low, when compared with USD 10,743 and USD 21,317 in South Korea and Singapore respectively.

India is probably the only country that will be able to match the Chinese prices with its relatively low labour costs and industrial base for manufacture of equipment. Hence from an inward looking industry dependent on government orders, the Indian shipbuilding industry is emerging as internationally competitive export led industry.

Replacement Demand:
40% of the Indian owned fleet is more than 20 years old and Indian owners will need to spend about $ 4 billion to replace these in the next 5 years. The International Maritime Organization (IMO) has mandated the phasing out of all single hull vessels by 2010. Single hull tankers constitute 15.8% of the total vessels. The fact however remains that Indias contribution is tending towards being a significant component in the global shipbuilding industry and that we need to get our act together to use this very promising window of opportunity. With the exponential growth in the number of ships calling on Indian ports, providing ship-repair facilities is becoming an increasingly attractive opportunity. The Indian shipbuilding industry is on a high growth trajectory and is expected to grow at a compounded growth of 30%. Though India has not yet become a significant player in the global shipbuilding business, it has gained a strong foothold in the niche offshore segment. It is projected that the shipbuilding sector is likely to cross USD3.72 billion by 2012.

Indian Ship Repair Industry:

With the growing global fear of pollution and stricter environmental norms and regulations, ship repairing services in India are in demand. Indian shipyards have competitive advantages like low labour costs, availability of skilled labour force and proximity to international shipping routes. Rising costs in Singapore are expected to push the market towards India and China. Long steaming distance to Chinese yards from South Asia make India a better destination for ship repairs in the region. In addition a healthy shipbuilding industry is also attract ship repair business. Ship repair is even more labour intensive than shipbuilding sector. India with its labour advantage and its ideal position on International Trade Route is well placed to wrest this business from competitors, once the Shipbuilding industry is developed. This can create additional revenue and employment opportunities with marginal increase in investment. Finally a booming domestic shipbuilding industry would also provide the much needed domestic capacity which can be accessed for future needs of the Indian Navy and Indian Coast Guard and help to realize the goal of indigenization in defence production.

Maritime Policy:
The Government of India announced a draft policy for the maritime sector. The policy says that the Indian government is committed to strengthen the shipbuilding sector. The Govt. of India announced 100% FDI and plans to set up international ship building yards on the east and west coast in publicprivate partnership. These initiatives are expected to boost Indian ship building activity. The government has also extended its subsidy policy to private shipyards effective October 2002.Ship building subsidy of thirty (30) % for a period of 5 years ending on August 14, 2007. The Govt. of India has announced a major project known as Sagar Mala to develop Indias maritime sector. The project is expected to result in additional demand for 2500 new ships.
Shipbuilding capacity by 2012 (in terms of cargo carrying capacity) => 4 MT Shipbuilding capacity by 2017 (in terms of cargo carrying capacity) => 19 MT

Percentage of ships built for exports => 75%

Training & human skills issues:

Development of training programs in various academies to produce high quality talent should be prime focus. The birth of Indian Maritime University (IMU) is a long cherished dream of the maritime community of India. The Indian Maritime University has been established as a Central University by the Government of India under an Act of Parliament, namely, the Indian Maritime University Act 2008, is poised to play a key role in the development of required human resource for the maritime sector. The Indian Maritime University, being the first of its kind in the country will cater to the educational requirement of the maritime fraternity. It is a teaching and affiliating University which will offer certificate, degree, post graduate degree and research programmes in all disciplines of maritime sector.

Strategically Located Shipyards:

Shipyards are strategically located along the West & East Coasts, providing it with significant flexibility and efficiency in manufacturing a wide variety of ships. The new shipyard in the vicinity of the existing facility, thereby resulting in lower management overheads and increasing cost effectiveness.

One-Stop Source for Shipyard Services:

In addition to its core shipyard repair and construction services, the company offers a range of related environmental services at its facilities, including tank cleaning, degassing and wastewater treatment. Services such as these will enable to become the only one-stop source of all services for all segments of the offshore support vessel, offshore barge and inland marine markets in India.

Conclusion:
Worldwide, the yards were full and the world is turning to India to meet their needs. After all, China and India have the skills and cheap steel for the best and cheapest ships. The successful development of the shipbuilding industrial Japan, Korea and China is no accident, but through a carefully crafted policy where the government has provided the core administrative advice and support. Such an initiative would require an integrated policy for the revitalization of the Indian ship repair industry as well, so that the conditions for the Indian companies are created to a technology leader instead become a trailer, through the promotion of competition, cooperation and even acquisition and joint ventures with leading foreign yards.

About Shipbuilding & Repair:

Shipbuilding is the construction of ships, which takes place in a specialized facility known as a shipyard. Shipbuilders, also called shipwrights, are workers which specialize in vessel construction and repair. The construction of boats is called boat building. Due to the smaller size and scope of the vessels being produced, boats do not necessarily require the full services of a shipyard but may be built in a boatyard or even smaller private facility. Shipbuilding is highly labour intensive and requires special skill sets to take up the task of building vessels of different usage and size keeping in view the highest levels of quality, competitive cost and stringent delivery schedules. The manufacturing process of shipbuilding can be broadly divided into five important areas of activities viz. (i) Hull fabrication (ii) Piping (marine plumbing) (iii) Electricals (iv) Machinery installation, and (v) Outfitting, accommodation and painting. Every activity is distinctive in nature and requires specialised skills and competency of operative personnel. Since the activities are sequential in nature, it requires tremendous synchronisation and team work to prevent problems at a later stage and last minute hassles. Block construction is a modern shipbuilding method which involves the assembly of prefabricated sections. Cross-sections of the superstructure are pre-built in a shipyard, taken to the building dock (or slipway,) and then hoisted into position and attached. Some of the more equipped shipyards are able to build equipment and utilities into the blocks, pre-installing pipes, plumbing, and electrical cables. The more components that can be built into the blocks before final assembly, the less effort required once the hull is welded together.

Job Opportunities:
In India, shipbuilding is still considered as a job work and assigned to subcontractors. The long-term investment in training and development of workers is considered. The comparative chart presented below will give a clear picture of how the shipbuilding sector will grow in the next five-seven years: 2006-07 Order book (million dwt) Global order book (million dwt) India's share of global order book Delivery (million dwt) Turnover ($ billion) Shipbuilding industry % of GDP Total employment prospect 1.3 231.2 0.4% 0.65 0.65 0.04% 12,000 2007-12 5.00 231.2* 2.7% 4.00 3.72 0.18% 78,000 2012-17 18.00 231.2* 7.8% 19.00 9.00 0.30% 2,52,000

A majority of the workers, basically migrant labourers from various Indian states, usually start working in the industry as unskilled helping hands and eventually become hull fabricators/piping and electrical operators over the years without any formal training and certification. Experience no doubt has a value in terms of operational skills, but such operators lack overall operational competency to perform the job technically as well as professionally. Also, they do not have the capabilities to do things right in the first attempt and anticipate problems proactively.

Source XI Th Five-year plan (2007-2012) by Min. of Shipping, GOI.

OPINION BY EXPERTS ON THE REQUIREMENT OF MULTI SKILLED MAN POWER Firstly, within the existing infrastructure, improve management of shipbuilding, provide the right environment, introduce multi skilled trade and improve worker productivity, when implemented, will improve efficiency by at least 20 per cent and even with existing facilities.
Source: Towards Modern Ship Design and Shipbuilding in India by Vice Admiral Rajeshwer Nath, PVSM, AVSM, VSM (retd)

Stresses the need of having a special work force for design, construction, maintenance and operation of marine vessels and structures. Success of a shipyard critically depends on its design and engineering edge he says. He advocates the need for quality equipment and trained hands. Design officer should be equipped with the right tools and manned by adequate number of experienced and skilled manpower.
Source: Rear Admiral B. Varadarajan, Head Ship Design & Engineering, Larsen & Turbo

India's ship building and repairs industry is likely to touch Rs 9,200 crore by 2015 because of robust demand in the domestic market and adequate availability of skilled workforce, an Assocham report said. Currently, the industry size is about Rs 7,310 crore. The report added, "Lower costs of labour, availability of skilled workforce together with robust demand in the domestic market and a growing steel industry are certain factors that build up a strong case for the sector in India."
Source: Assocham, Report-2012.

B.Sc. Ship Building & Repair

In the absence of smooth transition both at the middle management level and senior management level, it could be difficult to develop at par expertise with the established shipbuilding countries or shipyards. This is on big opportunity, Indian Maritime University introduced B.Sc.in Shipbuilding & Repair (B.Sc. SBR) programme with the best practices and improving their productivity across all levels. B.Sc.SBR Course was introduced by Indian Maritime University in the year 2010 for the first time in the country after carefully assessing the needs of the industry. The course is structured scientifically to help the students to derive maximum benefit and in turn the Industry. The Ship Building and Repair Industry is facing severe shortage of qualified and knowledgeable technicians, supervisors and Engineers for various activities. The course imparts sufficient theoretical classes complimented by equally important practical sessions. The course is divided into six semesters each of six month duration. While the I and IV Semester classes are held at the IMU Cochin Campus, the II, III, V and VI semester classes and practical are imparted at the COLLEGE OF SHIP TECHNOLOGY Campus located at Puthucode, Palakkad. COLLEGE OF SHIP TECHNOLOGY is affiliated to Indian Maritime University as a service provider / facilitator for imparting tuition and practical at its well

manned Campus and Workshops. The students will be required to take part in PT and sports for his all-round development.

INTRODUCTION TO THE SHIPBUILDING

Shipbuilding industry is a specialised and customised industry. Due to its inherent nature, the ship building activities cannot be automated beyond a certain limit. Every ship at the building stage is a new project with wide range of variables and implications. The execution part needs meticulous planning and implementation. The knowledge base of managers and skill set of workers play a very important role in the output of the finished Ship. In order to achieve a reasonable level of output and productivity compared to the International ship building standards, Indian shipyards have to work to improve on several more fronts. One of the identified areas of concern is the knowledge and ability of the Ship Building Crew in understanding the processes and sequence of ship building activities from concept, design, planning, procurement, execution and delivery.

B.Sc. SBR PROGRAMME.

Ship Building is a combination of art and science. But there are a number of important factors to be considered in ship building. Therefore, the curriculum includes types of ships, materials, welding and cutting, ship structure, outfitting, design(concept, preliminary, contract),dimensions, displacement, stability, propulsive characteristics, Hull form, general arrangement, structural details, prefabrication, shell plating, framing, decks, Hatches superstructure, tanker construction, pumping, piping, painting, corrosion control, ventilation, refrigeration, testing, launching, international regulations and shipyard layout etc. Training is provided in well-equipped workshop manned by able and experienced trainers. On job Training is imparted at M/s. TEBMA SHIPYARDS LTD., MALPE.