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Pipavav Shipyard and Mazagon Docks form JV for Building Naval Warships Print E-mail
Written by Vijay, James   
Wednesday, 14 September 2011
Mumbai: Pipavav Defence and Offshore Engineering Company will form a joint venture with state-run Mazagon Docks Limited (MDL) for the production of warships for Indian Navy. Mazagon Dock Ltd, Ministry of Defence, Government of India selected the Company as its joint venture partner.

Both companies will hold a 50 percent stake in the joint venture company - Mazagon Dock Pipavav Ltd. No fresh investment would be made in the proposed joint venture. The JV will focus on execution of Mazagon Dock's naval orders and will utilise both Pipavav and Mazagon Dock facilities. MDL's orders alone are sufficient to keep the JV engaged for the next 10 years or more.

This is the first time post independence that a private sector Company has been selected by a Company controlled by the Ministry of Defence to build warships together, which will result in speeding up the delivery of warships to the Indian Navy.

Mazagon Dock Limited (MDL) had invited private sector shipyards to submit proposals for a joint collaborative strategy to meet the challenging time lines in order to liquidate the order book of MDL - Expression of Interest entitled "Synergising Efforts of MDL in Shipbuilding".

Pipavav had responded to the same, and in response, the Company received a Letter of Intent from MDL, stating that the MDL Board had approved the Company as the Joint Venture Partner, and that the JV would be named as "Mazagon Dock Pipavav Limited" (MDPL). The formalities of the joint venture firm will be completed in the next few weeks.

"We are delighted to announce the formation of a joint venture with Mazagon Dock Ltd. for the construction of front line warships for the Indian Navy. As we have always said at PDOECL, we seek to be a Company that complements Government shipyards in their endeavor to produce warships for the armed forces. This truly marks a ‘Golden Day’ in the corporate history of this Company. With significant defence focused infrastructure in the country, Pipavav's proposed partnership with MDL(the largest defence shipyard) will create immense scope for the Company's order book growth and will help PDOECL scale new heights," said Nikhil Gandhi, Chairman, PDOECL.

Pipavav has already committed to invest $1 billion in its own facilities, of which $ 750 million has already been invested. The company is converting its wet dock to dry dock facilities.

The Board has recognized this as the 'Golden Day' in the corporate history of the Company. It has recognized that this will be a game changer and will help the Company to scale new heights.

Presently, Pipavav is licensed to make five warships a year. With a workforce of about 3,000 employees, Pipavav has a modular shipyard, huge dry dock and has the capability to construct futuristic ships for the Indian Navy. It has an order book of $1.5 billion. The company has inked MoUs with US-based Northrop Grumann and UK-based Babcock Group to tap the growing defence sector in India. It also has an agreement with Rosoboron Export.

Last Updated ( Wednesday, 14 September 2011 )
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