Five months into his new job at the ailing public sector unit, HSL's chairman and managing director Rear Admiral RM Bhatia has put in place an aggressive strategy for a new marketing set-up, a foray into hi-tech ship building and shedding of flab apart from hinting at the possibility of forming product-specific joint ventures in the coming months.

While the implementation of the financial restructuring plan which was approved several months back has been delayed owing to HSL's demand of waiving off the Rs 32 crore minimum alternative tax (MAT) burden which would fall on the company with the write off of Rs 590 crore in past losses, the joint venture has been delayed on account of a change in the management at Kvaerner,the HSL CMD told The Financial Express in an interview.

"Considering the delay in the joint venture, I am keeping my options open, particularly with the Koreans and Japanese," Bhatia said. "Talks for these joint ventures will begin within a month's time by when Kvaerner's position too would be clear," he said.

These new joint ventures could even be product specific, in line with the company's plans to get into specialised and hi-tech ship building and repair which it has identified for diversification. For instance, HSL may collaborate with different companies for offshore jobs and so on.

With a slump in the container vessel requirement, the trend is towards developing specialised ships which shows promise of developing into a major market over the next year. The future is LNG carriers and tankers and other hi-tech vessels which typically would cost between Rs 700 crore and Rs 800 crore each.

Several Indian and foreign companies have identified LNG for future growth in India which calls for anational policy on the subject, Bhatia said. At the same time, HSL is also studying the Ninth Plan requirement of the Shipping Corporation of India (SCI).Though dull as of now, the HSL CMD expects the ship-building activity to revive later this year with new IMO regulations coming into force in a few months from now which will result in the decommissioning of several vessels the world over. The ship-building activity will pick up as a result, he felt.

HSL's emphasis on ship repairs would continue considering it is the shipyard's bread and butter, Bhatia said. While 45 per cent of the company's turnover was accounted for by repair activity last year, a target of Rs 70 crore has been set for 1998-99. However, Bhatia was candid enough to admit that it was not enough and a turnover of at least Rs 150 crore from repairs was needed if the shipyard was to be on an even keel.

This, he said, would be achieved in another four years. While the proposed joint ventures are expected to bring in the much neededtechnology and marketing knowhow, one of the first moves being contemplated by Bhatia is the setting up of a marketing division for HSL. "Till now there has practically been no marketing for HSL. It has been ad-hoc at best," he said.

Some of these efforts are already showing results with HSL bagging a Rs 100-crore order for the repair of a naval submarine apart from another Rs 23-crore order from the navy for refurbishing a floating dock against stiff international competition for the latter.

However, Bhatia was quick to point out that the 30 per cent subsidy being given by the government may not be enough if Indian shipyards are to survive the cut-throat competition from foreign companies. "We are competitive technologically and we can be competitive commercially too if the necessary support is provided by the government," he said. "As things remain we cannot compete with shipyards from countries like China, Taiwan and even Korea where government subsidies far exceed the Indian levels.

The 30 per centdoes not even cover the cost if production while the ideal situation would be a subsidy to the extent of cost of production plus the cost of conversion," Bhatia contended. With these measures in place Bhatia is hopeful the ailing shipyard will be able to turn the corner soon.