Vice Admiral B.
Kannan (Retd.) holds a Bachelor’s Degree in Electronics & Communications
Engineering from Govt. College of Engineering, Trivandrum, M.Tech from IIT
Powai and a Post-graduation in Management from Jamnalal Bajaj Institute.
He has over 40 years of varied
experience, out of which, for a period of 20 years, he was associated with
different disciplines of Indigenous development of Naval Equipment, Integration
of Equipment for War Ships and Submarine Construction. His areas of expertise
also encompass Technical Infrastructure creation, Project Management, Quality
Assurance and General Administration. For nearly 4 years, he served as
Programme Director of a Strategic Program of Indian Navy, during which INS
Arihant was launched. He retired as the Chief of Materiel - Indian Navy. He has
been conferred with 3 Presidential awards viz. VSM in 1986, AVSM in 2009 and
PVSM in 2013.
He is the Managing Director &
Chief Executive Officer – L&T Shipbuilding Limited with effect from
19th October 2015. He is a Member of the Executive Management Committee of
Larsen & Toubro and Member of Board of Shipbuilding IC of L&T.
Vice Admiral B Kannan (retd) Managing Director and CEO
of L and T Ship Building, one of the successful private sector ship yards in
the country gives an over view of the
ship building industry and in particular the problems faced by the private ship
yards in securing orders from the
government and the difficulties in execution of contracts..
He also reveals how the L T ship yard at Katupalli
near Chennai has over-come these difficulties and how it has cut both time and
cost over runs a perennial problem in the Indian defense industry and
successfully bagged overseas contracts.
Interview with Sagar Sandesh, without
waiting for questions, he began pouring out vital information covering the
shipping industry comprehensively and his highly informative talk delivered
with vigour and warmth is given below under subheadings which in a way can be
considered as Questions though not in interrogative forms.
state of the shipping industry
industry faced downward trend following the steep fall in crude prices in the
international market a few years ago. As the Oil and Gas industry was feeling
the pinch of prices going down, they were not interested in buying new ships.
In fact the industry reversed the orders they had placed with the ship yards.
Consequently the inventory of built and unsold ships became a huge problem for
The trend affected the Indian shipyard industry as
well. The public sector ship yards in the country are not engaged in building
commercial ships and were largely catering to orders from the defense ministry.
The recession in the industry led to re- activation of
the subsidy in 2016 for the ships built by the domestic shipyards. The subsidy
which was introduced in 2004 by the Vajpayee government had lapsed in 2014.
Indian shipyard built ships became competitive following the reintroduction of
By this time Oil and Gas industry’s turnaround came to
a point when demand cannot be reactivated. A large number of ships built and
unsold were still lying in ship yards. Instead of going in for competitive new
ships available in the market, the owners preferred to go in for earlier built
ships at cheaper rates.
benefitted both the Operators of ships as well as the shipyards. Ship yards
were able to liquidate ships and of course both of them incurring some level of
losses. .Hence the industry was definitely under stress.