Tugboats, or tugs, are the helpers in the world of marine transport, as they push and pull other vessels to manoeuvre them to a parking spot or rescue them from a tight spot. And they power a global business that was valued at $19.7 billion in 2023 and projected to grow from $23.81 billion in 2024 to $74.29 billion by 2032. The fast-growing economies of China and India have led to a surge in demand for harbour tugs for maritime activities, according to industry experts.
And as the global marine industry looks for ways to reduce its carbon footprint, there is a push for tugboats run on green hybrid fuel. In India, Udupi-CSL — a subsidiary of Cochin Shipyard located in Malpe town, Udupi district, Karnataka — is gearing up to participate in the global tenders for green hybrid tugs, a segment that is currently dominated by Turkey and China.
Towards this end, Udupi-CSL is banking on added support from the Indian shipping ministry’s Green Tug Transition Programme (GTTP), announced in March 2023, to convert existing tugs into green hybrid tugs by 2047.
Niche segments
Madhu S Nair, Chairman and Managing Director of Cochin Shipyard Ltd, says, “Udupi-CSL stands at the threshold of tremendous growth opportunities. With a clear roadmap and a solid foundation, we are poised to capitalise on emerging trends and consolidate our market presence. Udupi-CSL is not just a subsidiary but an integral part of CSL’s strategic vision and diversified portfolio.”
He says there is also high demand for vessels used in the short-sea shipping segment — which involves movement of cargo and passengers mainly by sea along a coast, without crossing an ocean. The confidence shown by Wilson ASA, Norway — the largest short-sea shipping company in Europe — in Udupi-CSL promises a growth in business from this sector, too, Nair says.
According to Harikumar A, CEO, Udupi-CSL, the company’s focus on emerging niche segments, coupled with strong execution capabilities, has yielded good results. Optimistic about bagging sufficient orders in the years to come, he says the company is confident of delivering excellent performance.
The company has turned profitable within four years after its insolvency resolution process was completed in 2020. It clocked ₹186 crore turnover in March 2024. With an order book worth around ₹1,900 crore, it targets a turnover of ₹350 crore by March 2026.
Makeover and after
Udupi-CSL came into being in September 2020 after Cochin Shipyard acquired Tebma Shipyards Ltd. The subsidiary company’s first commercial order was contracted in March 2022 from Ocean Sparkle Ltd, an Adani Harbour Services Ltd company, for two 62-tonne bollard pull tugs. Next came an order from Polestar Maritime Ltd for two 70-tonne bollard pull tugs in November 2022. All the vessels were delivered within schedule. The yard has been assessed and technically evaluated by world majors in the tug segment ahead of its participation in the global tug tenders, company officials said.
Wilson ASA too, for instance, undertook multiple assessments and due diligence at the yard before placing an order for six dry cargo vessels of 3,800 tonnes deadweight (TDW) each in May 2023.
Officials say Udupi-CSL has collaborated with one of the best designers for short-sea shipping vessels, Conoship International. Satisfied with the quality on offer, Wilson ASA has placed another order — eight dry cargo vessels of 6,300 TDW each; it inked the contract for the first four vessels in June 2024 and is expected to do so for the rest in September, the officials said.
Udupi-CSL has now shortlisted tugs, short-sea vessels, and aluminium crafts as its key manufacturing segments for at least the next five years. It is seeking more local collaborations to expand capacities to meet the market demand in these segments.