Abu Dhabi's NMDC may buy stake in Dredging Corporation

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Abu Dhabi's National Marine Dredging Corporation (NMDC) is planning to pick-up stake in the government-owned Dredging Corporation, reports the Hindu BusinessLine.

On Wednesday, the Cabinet approved sale of the government’s entire 73.47 percent stake in Dredging Corporation of India (DCI), according to official sources.

“DCI would be a most suitable and best fit for us,” Mahesh Zagade, director at National Marine and Infrastructure India Pvt Ltd, told the newspaper.

“We are weighing plans to submit a bid,” he added.

National Marine and Infrastructure India Pvt Ltd is the Indian unit of the Abu Dhabi stock exchange-listed company in which the Abu Dhabi government has a 32 percent stake.

The move will help create a global giant to fight competition from Dutch and Belgian majors that are market dominants in the sector. The UAE-based NMDC is the sixth biggest dredging contractor in the world and joining hands with DCI will bring it a notch up to spot 5.

According to the report, there were talks between the two companies to bring DIC's dredgers in the global market. However, that deal did not work out.

Currently, NMDC has a USD 316 million EPC contract with Swan Energy's floating storage unit-based LNG port near Jafrabad in Gujarat. It had also worked on the expansion of the Suez Cana in 2015.

As for DCI, the company is involved in maintenance dredging, capital dredging, beach nourishment, land reclamation, shallow water dredging, project management consultancy and marine construction. It is under the administrative control of the shipping ministry.

A Moneycontrol report says that Dredging Corporation has enough potential for growth as a number of ports are coming up around the country and government is planning to increase use of waterways.

The report further says that a management with a strong focus on growth rather than survival can take the company to a different level given the experience and expertise that DCI has.