Apeejay Shipping Ltd has set an ambitious plan to get four more ships, aiming for a total fleet capacity of 1 million tonnes DWT (deadweight tonnage). This move would increase their capacity by almost 50%, making them a strong global contender in the dry bulk cargo shipping sector.
Currently ranked third after Great Eastern Shipping and the Shipping Corporation of India, Apeejay Shipping has managed to navigate the tumultuous waters of the shipping industry which has seen many prominent companies facing significant challenges and setbacks.
Despite these challenges, Apeejay Shipping, which currently owns 10 ships, has not only weathered the storm but also benefited from higher bulk charter rates following the pandemic, leading to substantial profits. Unlike some of its competitors, such as GE Shipping and SCI, Apeejay Shipping has decided to concentrate solely on dry bulk ships, leveraging their expertise in this area.
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Karan Paul, the chairman of Apeejay Surrendra Group, emphasized the company’s intention to focus on their strength in dry bulk shipping. He explained that achieving a combined DWT of 1 million tonnes would position them well among the top bulk shipping companies in India and globally.
In terms of finances, acquiring these new vessels is estimated to cost the company around $50-75 million over the next 3-5 years. The funding will come from a mix of debt and equity, with a ratio of 1:3. Apeejay Shipping plans to buy pre-owned ships rather than new ones to minimize the impact of volatile ship prices.
While the primary focus is on expanding the fleet, the company also intends to renew its existing fleet. In the near future, Apeejay Shipping will purchase one more ship and sell a couple of older vessels to improve operational efficiency and the reliability of their fleet.
Specializing in coal transportation along the Indian coast, Apeejay Shipping owns Panamax and Supramax vessels. The company’s strong financial performance in recent years, with a profit of Rs 400 crore in FY23 and Rs 300 crore in FY22, indicates that arranging financing for the expansion may not be a significant challenge.
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However, Karan Paul cautions that success in the shipping industry demands resilience. The industry is known for its cyclical nature, with periods of prosperity and downturns affecting bulk carriers, tankers, and container ships. Navigating these fluctuations is crucial for long-term survival.
Paul reflects on the challenges that Apeejay Shipping, founded by his late uncle Jit Paul in 1948, has faced over the years. He notes that the shipping industry’s constant ups and downs require a steadfast approach for sustainable success.
As Apeejay Shipping approaches its 76th year of operation, they’ve announced the acquisition of their 10th ship. This Japanese-built gearless Panamax vessel has a capacity of 76,812 DWT and will be named APJ Indrani, after Karan Paul’s wife and supermodel, Indrani Dasgupta Paul.
