China, low oil price, declining exports hurting biz: SCI

China meltdown, decline in oil price and low exports are hurting the business the cargo business, says Arun Kumar Gupta, Chairman & Managing Director (CMD), Shipping Corporation of India (SCI). In an interview with CNBC-TV18, Gupta says going forward, business is looking difficult. India is expected to touch its five-year low of USD 265 million of exports by the end of this fiscal, he says. The company’s container segment is in shambles, he says. However, the profitable tanker business has been able to balance out the situation, he adds. Gupta refused to comment on the government’s recent decision to select someone from private sector for the post of chairman on the shipping company. Recently, Road Minister Nitin Gadkari had said that the prime minister has given permission to select a private sector candidate for the post of SCI Chairman.Below is the transcript of Arun Kumar Gupta’s interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18.Sonia: Nitin Gadkari said that there is an attempt to make the organisation a bit more aggressive and competitive, so a person from the private sector will head the corporation. What have you heard with respect to the timing or the timeline of when this private sector chief could be got into the company?A: I have no comments on this matter; it is for the government to decide.Latha: But will it be difficult for a private sector person to manage? Would it be positive for the company to get fresh blood into the running?A: Let me repeat again. I agreed to speak to you on market scenario and not on these issues.Latha: Just a word then on how business is shaping up? Are you seeing an improvement in terms of revenues and volume of cargo carry?A: Business looks difficult. There are three things, if you see, as far as trade is concerned - China meltdown, Oil prices coming down and in Indian context, our exports have been falling. Our exports are expected to touch five year low by the end of this fiscal from USD 310 billion, it is expected to touch USD 265 billion. It is a big fall. So, this is broadly what I think about the trade.Now, coming to specific in shipping, the dry bulk market is in very bad shape. Today, the Baltic Dry index (BDI) is under 800. Ships we cannot even recover our operating costs. The container market is in total shambles. The main root in the container segment is Asia-Europe and the rates have fallen almost 31 percent there. So, it is a very difficult time. Offshore has also taken a beating because of the oil prices coming down, but still, okay, we can sustain there. Only silver lining is that the tanker market is still quite okay and because of that SCI is being able to do well. Oil prices are down, lot o f oil is being consumed and strategic reserves are being built up. Production of oil is good. As we said, because of that oil prices are low. And SCI being strong in the tankers segment, we have 37 tankers out of 69, so we are making the most of it.