January 10, 2007

Singapore smile An Indian owner says doing business out of Singapore is its best move ever

India's Transworld Shipping Group is cashing in on all the benefits Singapore's drive to become the leading maritime centre in Asia has to offer. Talk to any shipping company in India and they will tell you that the country's notorious bureaucracy is without question the biggest challenge they face when attempting to carry out their day-to-day business activities. Over the past year, the likes of Varun Shipping and Mercator Lines have been wooed by low taxes, accommodating regulations and the ease of doing business out of Singapore. Transworld took the bait more than five years ago and claims it was one of the best moves it could ever have made.

Many will be more familiar with Transworld's Indian liner arm, publicly listed Shreyas Shipping. The company is one of several in the Transworld empire, which also includes Dubai-based feeder-container operator Orient Express Lines (OEL). Transworld set up two separate subsidiaries when it moved to Singapore in 1999. Shreyas World Navigation (SWN) is the shipowning arm, while Orient Express (Singapore) Ltd OEL(S) is the ship-operating arm. Both are headed by Mahesh S Iyer, the younger brother of Transworld chairman S Ramakrishnan. A third subsidiary handles freight and logistics activities. Mahesh points out that the move to Singapore was made for reasons beyond the incentives being offered by the Singaporean authorities. "The most important factor was that we wanted to start a feeder service between Singapore and India and we needed a strong base in Singapore in order to do so," he said .

OEL(S)'s success in starting a feeder service stems from the growing level of Indian imports from Asia. Liner-company majors, who form the bulk of OEL(S)'s customers, prefer to feeder their Indian cargoes through Singapore because most Indian ports lack the infrastructure to handle large containerships. "India and Bangladesh have few deepwater ports. Most containers are transhipped in Dubai, Colombo or Singapore. Our sister company, OEL, handles the Dubai and Colombo trades, while we handle the Singaporean trade that is used to penetrate the east coast of India and Bangladesh. Almost all our customers make their decisions here in Singapore," Mahesh said. Although competition on the Singapore-based routes to India is stiff, Mahesh believes there is more than enough room for everyone. OEL(S) currently operates three dedicated services using eight containerships controlled out of Singapore.

OEL(S) currently operates three dedicated services using eight containerships controlled out of Singapore. Three of these are Singaporean-flag vessels owned by SWN, while the remainder are chartered in, either from Shreyas Shipping in India or the general charter market. Mahesh has no plans to branch out into other feeder services within Asia. "Our focus is on the Indian subcontinent and will continue to be so for the foreseeable future," he said.