ABG Shipyard is looking to enter the platform building segment for oil exploration in offshore areas.
It is scouting for partners with experience and expertise.
The platforms are permanent structures for oil and gas drilling.
It is a structure next to which a jack-up rig is placed and drills.
Dhananjay Datar, executive director and chief financial officer of ABG, said: “We are studying the business.” He said its size in India was Rs 15,000 crore (yearly) and exploited by foreign shipping companies, as apart from one Indian infrastructure and engineering major, no one else was making those.
Adding: “We are looking to tie up with another company, as it’s a tender-based business and for the pre-qualification, the company must have built platforms earlier. So, we need to partner with an expert in this field to get a foothold.”
He confirmed ABG was in talks with international companies for this. “We thought about entering into this business six months ago and, initially, even if we do a business of Rs 3,000 crore, it’s a great addition to the company’s revenues,” he explained. The company’s aim, for now, is to gather a business of at least Rs 5,000 crore from this segment.
Added Datar: “There is not much investment required in this business, as we already have a yard. For some new equipment, we might need Rs 400 crore but that hasn't been finalised. The profitability of this new business is also good. We are looking at around 22-23 per cent margin from this.”
The current order book for ABG is Rs 14,900 crore. Of which, it has Rs 4,500 crore worth of orders for 38 dry bulk carriers. The company is also building four rigs worth Rs 4,200 crore. Another Rs 970 crore of orders are for the defence sector, which it got recently. The rest of the orders are from the offshore segment.