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Mazagon Dock Shipbuilders enter container manufacturing with maiden order from CONCOR

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MUMBAI : State-run warship builder Mazagon Dock Shipbuilders Ltd has ventured into container manufacturing with a maiden order for 2,500 steel boxes that carry cargo from Container Corporation of India Ltd (CONCOR), also state-owned, a top official has said.

Each container will cost Rs 3.5 to 4 lakhs, translating into a deal worth some Rs 100 crore.

“We have given manufacturing orders to Mazagon Dock for 2,500 containers. The order includes 1,500 containers of 10 feet high and 1,000 containers of 12 feet high,” V Kalyana Rama, Chairman and Managing Director, CONCOR said.

Mumbai-listed CONCOR is bringing 12 feet high containers into India for the first time, which is more useful than dwarf containers, Kalyana Rama added.

Mazagon Dock, also listed, is the third state-owned firm to enter container manufacturing after Bharat Heavy Electricals Ltd and Braithwaite & Co Ltd as an acute shortage of boxes in 2020 following the pandemic induced supply chain disruptions hurt India’s exporters and triggered calls for making the steel boxes locally.

CONCOR, according to Kalyana Rama, promoted container manufacturing under the ‘Atmanirbhar Bharat’ initiative by placing orders for 6,000 containers with local firms. The manufacturing orders included 1,000 containers each to BHEL and Braithwaite & Co.

In November 2021, the Ministry of Railways allowed the introduction of 12 feet high container of 20 feet length for cargo transportation on its network.

In a circular issued on November 15, 2021, the Ministry said that the haulage charges for these containers would be at par with the charges notified in 2018 for different weight slabs on a per twenty-foot equivalent unit (TEU) basis.

A TEU is the standard size and a common measure of capacity in the container business.

When commodities notified by the Indian Railways are transported in 12 feet high containers, they will be charged at Container Class Rate (CCR) subject to the existing terms and conditions, the Ministry of Railways said in the circular.

India has been eyeing manufacturing of cargo containers, a segment dominated by China, as part of the Atmanirbhar Bharat initiative, to create an import substitute for new shipping containers and assist in the security of supply chains for exports.

China makes about 90% of global shipping containers. CIMC is the world’s largest container manufacturer with a market share of 40%. Other players include Singamas, COSCO and CXIC.

Currently, India sources its entire container needs from China.

India will require approximately 60,000 new containers between now and 2026, an annual addition of about 10,000 TEUs per year, according to the government.

The global container fleet is handled by container leasing companies and shipping lines.

Triton is the world’s largest container leasing company with a market share of 14%, owning over 6 million twenty-foot equivalent units.

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