The
volume of commercial ship building in our country is very small compared to global
ship building. Our shipyards are not able to cater to the needs of even the
Indian shipowners in spite of small size of our present merchant fleet.
The
build cycle in our shipyards is long compared to other reputed shipyards
globally. All our yards have ill reputation for long delays in delivery schedules
which is a cause of great concern to those ship owners who have placed their
orders with our yards.
The
ship building industry in our country needs to understand the concerns of their
valued customers and take necessary steps to address them sincerely and
objectively. The ship builders need to understand and appreciate the business
plans of their present and potential customers. Long delays in delivery
schedules shall put the ship owners at great risk financially as well as cause
a loss to market share in their business.
In a market where demands for
building is not very high and building berths are available globally, the orders
due to delayed delivery are likely to be cancelled and further leading to legal
disputes. Such disputes result in bad reputation to the ship builders and
finally result in down turn in their business due to lack of orders. The Indian
ship building industry should take a lesson from what has happened in the
recent past.
The
ship building for our Navy is mostly carried out by our public sector shipyards
except for some small vessels for Navy and Coast Guard. Over the last four
decades, our public sector shipyards have developed remarkable capabilities in
the processes of ship design and construction; especially the capabilities
of of Mazgaon Docks Ltd. and Cochin
Shipyard Ltd. need to be mentioned as well as appreciated. However, even our
naval projects are delayed as they also have productivity issues for timely
completion of many critical projects which are vital to the safety and security
of our nation. Our private sector shipyards have not developed such capabilities
to build sophisticated naval vessels and deliver them on schedule; they are yet
to prove their capabilities for such building.
Over
the years the need to invest in development of new shipyards has been
emphasized during many seminars and presentations. The vision to develop
capabilities to enhance commercial as well as naval ship building has not
translated into development of building capabilities.
In
the context of ship building in our country, I would like to mention the great
vision of our Honble. Prime Minister, Shri Narendra Bhai Modiji, as “MAKE IN
INDIA” and “ZERO DEFECT”. I sincerely hope that the ship building industry in
our country would understand his vision fully and would initiate processes to
translate the vision into realistic and established goals. The “ MAKE IN INDIA”
initiative launched by our Prime Minister is an example of his great vision; not
only ship building industry but all manufacturing industries should strive
towards “MAKE IN INDIA with ZERO DEFECT” in their products.
To
strive towards zero defect would itself call for stringent quality control of
products manufactured and thus quality management system would become a part of
our design & production culture as well as work culture. We do not need to
develop the discipline of quality management system separately as many organizations
practice this in our country. The principle of zero defect needs to be
practiced in every sphere of our life, individually, in the family, in the
society and as a nation.
The
ship building in our country has its specific problems as an industry but the
solutions to these problems are well in sight. The Promoters, Entrepreneurs
along with our Government needs to take very bold steps in the right direction
through innovative measures.
Some
of the main issues which need to be addressed in the ship building industry in
our country are mentioned below :
1.
Design and
Development of shipyards (infrastructure) for high efficiency and productivity;
2.
Availability of
Resources (ship building materials, equipments; well trained, skilled and
productive manpower);
3.
Resource
Management;
4.
Production
Management;
5.
Ship Design &
Production Design capabilities;
6.
Research &
Development in ship building;
7.
Project
Management capabilities in ship building/repairs/conversions;
8.
Use of Updated
Technology in ship building;
9.
Use of Information
Technology in ship building;
10. Ship building/Ship Repairing Skill development.
11. Joint Venture and/or Transfer of Technology in ship
building/ship repairing/ship conversions.
12. Finance Cost.
13. Regulatory issues for development of shipyards (e.g. land acquisition,
single window for all clearances and licences);
14. Environmental issues and clearance.
15. Regulatory issues in exports/imports of ship building/ship
repairing materials/equipments;
16. Development of basic supporting infrastructure like shipyard connectivity,
power and water supply.
17. Labour Laws.
The
present government under the leadership of our visionary Prime Minister has
initiated many steps to build transparency in governance of our nation. The
global investors have already taken note of these on-going initiatives. It has
already built trust amongst global investors and has created positive
environment for long term large investments in our country. A lot more needs to
be done in this direction but within a short span of time the achievements of present
government needs to be commended.
Some
of the issues mentioned above are procedural/regulatory in nature and I am
quite confident that the present government would be able to address them
through quick decision making process. It is my belief that even taking bold
steps to bring changes in laws/acts and procedures are not difficult if there
is sincerity of purpose, reasonableness, transparency and finally, if it can
generate and sustain large scale employment, especially for the needy and the poor.
Now,
it is time for industry leaders and entrepreneurs to take advantage of this
great opportunity lying ahead of them to develop our nation as manufacturing
hub. The industry leaders need to build their organizations based on principles
of transparency and corporate governance.
The
sustained growth of ship building in our country can also be accelerated
through joint ventures as it will also lead to transfer of technology and
investments in upgradation of technology, training and development of resources
including human resources.
The
industry leaders and entrepreneurs in the ship building industry need to
establish long term strategies and work towards achievement of established
goals. The ship building industry in our country has been depending on
subsidies to grow and sustain. It is not pragmatic to work into future with the
idea of continued subsidies and simultaneously develop and sustain growth in
this field.
The
industry needs to understand the potential benefits of long range planning
& development and accordingly build their core competence to achieve their
established goals. Some of the factors listed below should be taken into
consideration while planning investments in ship building & ship repairing
business :
1.
The shipyard
should be designed and developed with long range planning and investments should
be based on strong business plan.
2.
The quantum of
investments should be planned in phases depending on the detailed business plan
and expected returns.
3.
The shipyard
should be designed for high efficiency and optimized production taking into
account various factors which would affect its efficiency and development of
production capabilities (e.g. improvement in processes, reducing build time,
reducing inventory, improving skills of employees, reducing waste, reducing
movement of materials, reducing re-work, stringent quality control, dimensional
control, improving pre-outfitting etc. The advantage attained from such
improvements will certainly outweigh subsidies provided by the government.)
4.
The overall
conceptual design of the shipyard should be based on product mix and quantum of
total investments planned for the yard.
5.
The detailed business
plan should be based on extensive research which would justify the quantum of investments
and expected returns on investments.
6.
The business plan
should also take into account influential factors like time frame for
development of infrastructure and resources as well as anticipated learning
curve which would greatly influence efficiency and production of the shipyard.
7.
The availability
of trained manpower as well as development of skilled manpower should be
ascertained and should form a part of detailed business plan.
8.
The level of
technology to be employed in ship design, build strategy, production systems and monitoring of overall
production should be ascertained well in advance and should form part of
detailed business plan.
9.
The phased
development of shipyard should be planned in such a manner so that future
changes in infrastructure, production systems and level of technology should
not affect the producibility of the shipyard to such an extent that the
economics of running the yard profitably may become a cause of concern.
I
have stated some of these factors to highlight the point that the Promoters and
Entrepreneurs need to do their home work through extensive investigations and
research to build their detailed business plan prior initiating decisions for
huge capital investments as ship building is capital intensive. The practice of
“development as required and as perceived necessary” should be avoided as it is
more likely to result in failure than success in the venture.
Some
Promoters and Entrepreneurs may feel that spending a part of investments on extensive
investigations and research can not be justified as investments are directly
related to returns. But it is my strong belief that success of any venture shall
largely depend on developing long term strategies with robust business plan.
The
ship building industry needs to develop in our country as we are a maritime
nation with huge coastline. There are huge potentials in the form of contribution
to economic growth, development of skilled manpower, generation of large scale
employment, further growth of ancillary industries and thus accelerated growth
in employment opportunities. Besides contributing to our GDP, it can also
enhance safety and security of our nation through development of maritime
capabilities.
It
is my personal view that with sincerity of purpose, strong sense of commitment
and long range planning, all the problems in the ship building industry can be
overcome and accelerated and sustained growth can be achieved. The achievements
of our scientists in the field of space technology is a clear example of what
can be achieved inspite of all types of constraints and limitations. If the
nation has to progress, we need to make way ahead inspite of all difficulties,
constraints and limitations; we have to strive hard to find solutions and contribute
towards development of our nation.
JAI
HIND.
