SCI set to buy three container ships for USD 225 mn

"SCI plans to purchase three new container vessels, along with its existing JV partner Mediterranean Shipping Company (MSC). These will be executed after securing the necessary board approval," a senior SCI official said.

Presently, Shipping Corporation has a total fleet strength of 76, which includes five container vessels.

Taking into account a visible pick up in the trade volumes in the recent past, the shipping major decided to strengthen its fleet strength, the official said.

"We have seen a significant pick up in volumes in the recent past, on account of the recovery in the domestic and global markets. The volumes are expected to pick up further in the months ahead," the official said.

Reflecting the recovery and the corresponding revival in the export trades from Europe to Asia, shipments in the Europe-Asia trade route have increased by 12.57 per cent in October to 464,689 Twenty-foot equivalent units (TEU), from last year's 413,249 TEUs.

"In the long-term, there is a huge potential in this business. The recovery in freight rates is most notable on the Asia-Europe routes with all container routes showing signs of improvement," the official said.

A decline in vessel prices in the past few months could also facilitate the corporation to acquire more vessels in the near future, the official said, without giving any further details.

However, the SCI and its Geneva-based JV partner, MSC have not decided on whether the latter will co-fund the proposed acquisitions of three container vessels, the official added.

In May, SCI had entered into an agreement with MSC to run its European service.
"The discussions with our JV partner is on and it is too early to comment on the matter," the official said.

Presently, the five container vessels of the corporation covers Far East, China, UK and the Middle East.

The SCI also operates its feeder cargo vessels on west coast of the country, besides operating cargo in the coastal regions of India.