TCI plans to acquire two cargo ships worth $40 in FY 25 for its seaways business

TCI was exploring options from shipbuilding operations in China, Japan, and Korea, expecting to finalize a deal in the second half of the fiscal year; Japan has already cancelled an order from TCI at the last minute. In fact, TCI wants to go in for a large second-hand cargo vessel since the delivery of a new ship takes about three years.

Last October, TCI had signed a contract with Nakanishi Shipbuilding Co. Ltd., Japan, for two cellular container vessels of about 7,300 deadweight tonnes (DWT) each, totaling around $35 million. The cancellation of this contract has led TCI to reevaluate its ocean fleet acquisition plan.

“We are looking overseas for ship acquisition as there is still a gap in what is available from domestic capacities. Shipyards in China, Japan, Korea and others are being explored,” Agarwal said.

Currently, TCI’s fleet comprises six ships with a total DWT of 77,957 tonnes. Three of these ships will need replacement in the next three to four years, prompting the acquisition plan. Besides the ship acquisition, TCI is looking to expand its overseas operations in the Middle East, where it has set up an office in Dubai. The company also plans to add Sri Lanka to its operational map later this year or early next year, aiming to become a major logistics player in the South Asian region. TCI already operates in Nepal and Bangladesh.

“Our plan is based on following the customer strategy. So, we have set up our base in countries where our existing customers are demanding certain services. The expansion in the Middle East will continue in the next year or two with more business opportunities that are arising from there,” Agarwal said.

In FY25, TCI plans to invest ₹375 crore, with ₹75 crore allocated for ship acquisition to support its seaways operations, which currently contribute around 15% to revenue.