MDL has a rich heritage of 250 years

Mazagon Dock Shipbuilders Limited : MDL has a rich heritage of 250 years

An interview with Sanjeev Singhal | Chairman & Managing Director | Mazagon Dock Shipbuilders Limited

What is the main role of MDL in defence sector?

Mazagon Dock Shipbuilders Limited (MDL), a Defence Public Sector Undertaking, under the administrative control of Ministry of Defence (MoD) is the oldest shipyard in India that started with a small Dry Dock in 1774, incorporated in 1934, and taken over by the Government of India in 1960with the objective to cater to the needs of the nation’s strategic defence requirements. After its takeover by the Government in 1960, MDL became a leading Warship and Submarine building yard in India, producing State-of-the-Art Sophisticated Warships and Submarines for Indian Navy (IN).

MDL is the only shipyard in India with proven capability of building Destroyers and two different types of Conventional Submarines for the Indian Navy with its facilities located in Mumbai and Nhava. MDL is also one of the unique Shipyards in the world with such diverse range of products. It is pertinent to mention that only a handful of countries have capabilities to construct Submarines and India is one among those countries in the world which is capable to construct Conventional Submarines. MDL takes pride as being the only Shipyard in India having a proven track record of constructing State-of-the-Art Conventional Submarines. MDL has already delivered 07 nos. Conventional Submarines under two different technologies i.e. German and French Design. Beyond construction, MDL is also fully involved in all Trials of the platforms that are constructed including the most critical Weapon Trials.

Further, Destroyers are the most potent Frontline Warships of any Navy.MDL is also the only shipyard in India having proven track record of constructing Destroyers and has delivered 09 nos. of Destroyers fitted with Weapon Intensive Cutting Edge Technologies for handling all three-dimension warfare Land /Sea/Air and under water.

Till date, MDL has built & delivered 28 Capital Warships, including 09 Destroyers and 07 Conventional Submarines to IN which includes Leander Class Frigates, Godavari Class Frigates, Shivalik Class Frigates, Khukri Class Missile Corvettes, Missile Boats, Delhi Class Destroyers, Kolkata Class Destroyers, Visakhapatnam Class Destroyers, SSK Class Submarines and Scorpene Class Submarines. All these platforms are the most advanced, sophisticated and frontline warships of IN.

MDL with its present facilities has the capacity to build 10 Warships & 11 Submarines concurrently, at their various stages of construction.

How do you view MDSL’s enormous growth since its inception?

MDL has a rich heritage of 250 years that started with a small Dry Dock in 1774. After its takeover by the Government of India in 1960, MDL turned into a Warship building yard in India, producing State-of-the-Art Sophisticated Warships and Submarines for Indian Navy (IN).

From the time it was taken over by the Government of India in 1960, MDL has built 802 vessels, including 28 Capital Warships and 07 Conventional Submarines and 631 Commercial Vessels (243 of which were exported to Mexico, France, UK, Iran, Yemen, Mozambique, etc.) Besides, 63 offshore platforms, 03 process platforms and 02 jack-up rigs were also built at MDL.MDL has the capacity to build Warships, Submarines, Merchant & Commercial ships up to 40,000 DWT.

MDL is proud to have contemporary world class infrastructure and facilities with Virtual Reality Lab, Product Data Management, Product Lifecycle Management, Modular Integrated Construction, with the capability and capacity to construct and repair 10 warships and 11 submarines simultaneously.

MDL is currently executing a project of constructing Visakhapatnam Class Destroyers (three out of four already delivered to IN within Contractual timelines and ahead of schedule), 04 nos. of ‘P17A’ Nilgiri Class Advanced Stealth Frigates, ‘P75’ Scorpene Class Conventional Submarines (five out of six already delivered to IN) and Medium Refit & Life Certification (MRLC) of SSK class Submarines. MDL is also executing the recently received orders of New Generation Offshore Patrol Vessels (NGOPVs), Fast Patrol Vessels (FPVs) and Training Ship of Indian Coast Guards.

MDL is strategically located with an area spread across 75 acres of land at Mumbai and over an area of 37 acres at Nhava Yard – Navi Mumbai, which is about 15 nautical miles across the channel with a deep-water frontage.

MDL has also planned to develop Nhava Yard as a Greenfield Shipyard and have a Floating Dry Dock (FDD) facility for handling future New Built ships of larger dimensions and undertake Repairs/Refits of Shipbuilding & Submarine projects.

What are the challenges Indian defence production sector facing today?

Critical dependency on foreign sources for specialised Equipment, Weapons, Sensors and Propulsion systems (Gas Turbines), Dependency on only a few suppliers renders increased risks in procurement & cost.
While the defence sector is able to meet the requirements of domestic market, the industry faces headwinds when required to capture the export market. These are primarily due to factors as enumerated:

(a) Subsidy: In most of the target countries, there is deep rooted foreign presence of certain countries with a very competitive price tag and build timelines. The subsidies hidden or upfront by the government of these countries to their shipbuilders enable them to quote significantly lower prices. For instance, Chinese Shipbuilding Industry is fostered by the following:

Steel subsidy
1. Energy subsidy
1. In case an owner cancels the orders, the govt. takes the responsibility
1. Maritime clusters and Special Economic Zone (SEZ) for ancillary Industry.
1. Lease free land for 50 years for shipbuilding activity.

(b) Labour Cost: Labour is a major cost, accounting for about 10-15% of total cost. Lower labour cost compared with China, South Korea and Japan can improve competitiveness along with greater content of indigenisation. Indian shipbuilders import 65-70% of equipment, due to absence of facilities to manufacture equipment in the country and equipment costs constitute approximately 50-55% of shipbuilding cost which tends to increase the overall cost of vessels made in the country.

What are the important steps taken by MDL to face the challenges?

In pursuance of the Government of India’s vision of Make in India. Indian Navy in July2015 had announced an Indigenization Plan for next 15 years (i.e. up to 2030).It lists out the equipment which can be taken up for indigenization in the coming years. These steps were taken to encourage all sectors of the industry to come forward and participate in indigenous development of Weapons, Sensors and other high-end equipment for the Indian Navy. In line with this objective, MDL has set up a dedicated “Make in India” Department for Indigenization. Indigenous content in Warships & Submarines built has increased in the past 5 years. Large number of equipment have been Indigenized in order to give an impetus to the GoI’s “Make in India” campaign. Indigenous content in Warships & Submarine has been increasing over the years and has led to a reduction in construction cost. Indigenization has reduced reliance on third party component manufacturers. From 42%indigenous content in P15 Delhi Class Destroyers (built in 90s), the efforts towards indigenisation has resulted in increasing the indigenous content of latest built platforms to 75% in P17A Nilgiri Class Frigates (under construction).

MDL being strategically located at busy international maritime route has a significant advantage. By being located on the Indian west coast it provides proximity to connect up with busy International Maritime route from Europe to Pacific. Being present in western India it provides access to Client and Vendors and thereby achieving closer coordination. Location of a majority of sub-contractors in & around Mumbai provides ease of access to workforce. Also the location of facilities in vicinity provides a strategic competitive advantage over peers. Further, MDL is headquartered in Mumbai which is also the Headquarters of the Western Naval Command of the Indian Navy. Customers such as the Indian Navy, the Indian Coast Guard and vendors are based in Mumbai. This has resulted in ability to closely co-ordinate and thereby greater efficiencies.

MDL had completed a modernization program upgrading itself to a world class infrastructure resulting in substantial reduction in construction/building period through technologies such as Modular Construction of building from Unit Assembly to Block Assembly. MDL today thus has a capacity to build 10 Warships and 11 conventional Submarines simultaneously. This has been made feasible through creation of following facilities:
Module workshop with two 50T EOT crane and retractable roof designed for fabrication
Large hull blocks, substantially pre-outfitted are constructed within a covered environment workspace.
Goliath crane with a capacity of 300T with a span of 138 meter straddling over two slipways and the module shop.
New wet basin equipped with about 27,000 sq. meters of area to accommodate two large frigates and two submarines for outfitting.
Cradle assembly shop, used for fabrication and pre-outfitting of cradle structure in unit block assemblies.

As per the national perspective plan of Sagarmala project, Coastal and Inland Waterways traffic is expected to shoot up 15 times over the next 20 years. Similarly, capacity augmentation is expected to result in a five times rise in traffic capacity, from the existing 350 million tonnes. This is expected to bring in additional ship repair business for both State owned & Private Shipbuilders on each ship built. Assistance is available only after Construction & Delivery of Ship to the buyer. To tap this business, MDL has envisaged to develop a Greenfield Shipyard in its freehold land spread over an area of 40 acres at Nhava, Navi Mumbai. The shipyard will have a Shiplift, Wet Basin, Workshops, Stores and Buildings and a Ship Repair facility as per the operational requirement of the Company.

Also, India’s strategic position along the East bound and West bound International Trade routes offers an opportunity to undertake repairs of the vessels plying on these routes. A main Container route connecting America and Europe to the East passes very close to the Indian coastline, presenting a major opportunity for repairs. To tap this business opportunity, MDL has signed agreements with very important nations including the US Navy and is expected to open-up voyage repairs of their platforms by at MDL.

Further, MDL’s senior management team with significant Industry experience, provides impetus to the pace of construction through a large pool of experienced Naval Architects, Engineers and Draftsmen with Technical capabilities, an enhanced maturity in design and ensuring equipment availability at the time of commencement of production led to best quality and efficiency of vessels constructed by the Company.

Under the Shipbuilding Financial Assistance Policy 2015, which aims to provide financial assistance to shipbuilders and grant infrastructure status for the industry, the government has set aside Rs40 billion to implement the scheme over 10 years. The Financial Assistance Policy of 2015 coupled with exemption from Customs and Central Excise Duties on all raw material and parts for use in the manufacture of Ships/Vessels/Tugs, Pusher Crafts etc. shall reduce the cost of manufacturing ships in India, thus improving the competiveness of Indian shipbuilders.

MDL has unique strengths and skill sets that have been meticulously developed in the past eight decades and are adapted in the complex activities of weapon integration sensors for export of high tech Defence platforms for the Defence needs in the international market, which has displayed a tendency to continue to rise at every moment. Artificial Intelligence (AI) presents opportunities to complement and supplement human intelligence and enrich the way people live and work. AI is a key component of the Industry 4.0 revolution which is poised to disrupt the status-quo.

What are the recent activities of MDL?

Major Recent achievements of MDL:

MDL has delivered 06 nos. of Destroyers in 9 years from 2014 to 2023 to the Indian Navy, averaging delivering one Destroyer almost every 18 months. This delivery rate matches even with advanced nations even though they have an advantage of being flanked by a much robust ancillary infrastructure to support the yard efforts.
In addition, MDL also delivered 05 nos. Submarines to the Indian Navy between 2017 to 2022, inspite of challenges relating to COVID, global Chip shortage and logistics issues due to Russia-Ukraine war etc.
Platforms delivered by MDL are most potent Weapon intensive platforms that equip the Indian Navy with front-line Cutting-Edge prowess.
MDL has been consistently earning Profits and distributing Dividend for the past more than 15 years.
MDL has recorded highest ever Revenue from Operations of Rs 7,827 crores and the Profit after Tax of Rs 1,073 crores in FY 2022-23, higher by 37 % & 83% over previous financial year respectively.

vi) Last three Destroyer class Ships were delivered to the Indian Navy as per contractual timelines or ahead of it.

How do you see MDSL in the year 2030? Elaborate MDSL’s future plans.

During the inaugural address of Hon’ble Prime Minister of India in the 3rd Global Maritime Summit held at Mumbai, it was highlighted that India is poised to become one of the top five ship-building nations in next ten years. In this line, the Government of India has a grand vision for expansion of all maritime activities at a rapid pace in a defined time frame such that India ranks amongst the top five ship-building nations. Coupled with the above vision, the developing geo-political imbalances present an un-foreseen opportunity for MDL to expand exponentially in the coming years in both New Build and Repair/Refit projects as enumerated in subsequent paragraphs.

New Build Projects:

MDL’s present Order book position as on Dec 2023 stands at Rs 38,389 Cr consisting of 01 no. of ‘P15B’ Visakhapatnam Class Destroyers (three out of four already delivered to IN within Contractual timelines and ahead of schedule), 04 nos. of ‘P17A’ Nilgiri Class Advanced Stealth Frigates, 01 no. of ‘P75’ Scorpene Class Conventional Submarines (five out of six already delivered to IN) and 2 nos. of Medium Refit & Life Certification (MRLC) of Submarines ‘INS Shishumar’ & ‘INS Shankush’.
Additionally, MDL expects to receive Orders w.r.t3 nos. follow-on Kalvari Class Scorpene Submarines, for which bids have already been submitted.
Further, the core business of MDL is based on the requirements of Indian Navy’s Maritime Capability Perspective Plan (MCPP), and Coast Guard requirements. The future projections include the following:
- 06 nos. Submarines under Project P75(1)
- 05 nos. Next Generation Destroyers
- 08 nos. Next Generation Corvettes (NGCs) for Indian Navy
- 01 no. Hospital ship for Indian Navy
- 06 nos. High Speed Landing craft for Indian Navy
- 07 nos. NG Fast Attack Craft for Indian Navy
- 12 nos. Air Cushion Vessel for Indian Coast Guard
- 01 no. Polar Research Vessel (Civil)

The 06 nos. Submarines of Project P75 (I) has an AON value of Rs 43000 Cr (Base 2018) while the 05 nos. Next Generation Destroyers would cost in excess of Rs 50,000 Cr. MDL has been shortlisted as one of the Bidders for Project P75(1) Conventional Submarines project. The Bid for the Project has already submitted to the Indian Navy.

Further, Ministry of Defence (MoD) has also approved the procurement of 08 nos. Next Generation Corvettes (NGCs) for the Indian Navy for Rs 36,000 Cr. The RFP for NGCs is likely to be issued very soon. MDL shall be participating in the New Build Program of above vessels as and when the Request for Proposal (RFP) for the above vessels will be floated by MOD on competitive bidding.

Repair/Refit Projects:

MDL has also undertaken repair & refits of Warships, Submarines and Commercial Vessels. In this line, MDL has already done the Medium Refit & Life Certification (MRLC) of the SSK Class Submarine ‘NS Shishumar’ and currently executing the MRLC of ‘NS Shankush’. MDL has also completed the repair of many Indian Coast Guards vessels and is currently doing the refit of ICGS Sachet & ICGS Vikram.
MDL has signed agreements with very important nations including the US Navy and is expected to open-up voyage repairs of their platforms by at MDL. The revival of ship repair operations has helped MDL to generate more revenues apart from improving the capacity utilization.

What are the initiatives taken by your MDL?

The R&D initiatives in MDL have been pursued for betterment of the working environment, improving ergonomics on board platforms and to find solutions on perennial issues faced during ship construction. There are various in-house projects as well as projects in collaboration with academic institutions of repute like Welding Research Institute (WRI), Trichy, IISc, Bangalore, NID, etc. Design department of MDL is registered with Department of Scientific and Industrial Research (DSIR) as a R&D unit.

In its quest to diversify the product range, MDL has also embarked upon the development of New Innovative products such as: Artificial Intelligence (AI) based projects, Fuel Cell Electric vessel, Midget Submarine, Swarm Drone, Mobile Target Emulator (MTE), Expandable Underwater Target (EUT), Lithium Ion Batteries, etc. to make our presence felt in areas other than Shipbuilding and Submarine building. Some of these are maiden efforts in the country aimed at National Capability development and has drawn attention of who’s who in the industry.

MDL has also undertaken various CSR initiatives in compliance to the Govt. guidelines that includes CSR activities towards National Priorities and to support the weaker sections of society in the sectors of Health, Nutrition, Education, Skill Development and Rural Development. MDL has spent more than Rs 100 Cr in last 6 years in various CSR initiatives.

Tell us the Role of MDL in “Make in India” and “Atmanirbhar Bharat”.

Indigenous Warship construction by MDL in itself is a major indigenisation success story. “Make-in-India” and “Atmanirbhar Bharat” in MDL dates back to 1960, when under a strategic national objective of indigenous shipbuilding, indigenous construction of first frontline warship, INS Nilgiri, was undertaken. Since then, MDL has been continuously striving to enhance the indigenous content in the successive deliveries of Ships and Submarines.

MDL’s stellar efforts and commitment towards indigenisation are evident from the fact that percentage of indigenous content in the ships built by MDL has been steadily increasing from 42% in P15 Delhi Class Destroyers (built in 90s) to 75% in P17A Nilgiri Class Frigates (under construction).

MDL is putting all efforts & has contributed to Positive Indigenisation List (PIL) (PIL-1, PIL-2, PIL-3 and PIL-4) initiatives of MoD/DDP. The PIL-1 contains 05 MDL items, PIL-2 contains 06 MDL items, PIL-3 contains 134 MDL items and PIL-4 contain 872 MDL items. MDL has already successfully indigenized fifty (50) major items/equipment through the Indian Industries.

Shilpa Bichitra | Anniversary Edition | 2024)