Seafarer’s Inc.

Vedam has set sail in global waters with its prowess in the shipbuilding space.

By Bindi Mehta

The Indian economy opened up in 1991 and many industries in the country adopted a global approach then on. They became competitive and tweaked their products and services to meet global specifications and parameters. The Indian shipbuilding industry, however, remained an exception to this whole transformation process. This was one industry that only woke up to global ways post 2000. By 2003, Indian shipyards had secured a fair amount of foreign/export orders. This movement picked up pace in 2005-2006. Three young naval architects from IIT Madras saw a huge potential to elevate the industry and workflows to a global level through an independent, naval consultancy firm.

Global Reach
“During my stint with a U.S. shipping company in 2005 and 2006, I got a chance to travel to various shipyards across the world. I was a part of the ‘New Building and Repairs’ team as a result of which I got a chance to witness first-hand the production, maintenance and upgradation process followed overseas. When I came back to India after two years of foreign posting, I saw a clear gap here. Indian shipyards worked at their own content pace. A ship that would take a few weeks to build in Korea would take months here. There was a lack of automation, technological updates, and high quality, error-free design inputs,” says Akshay Jain, Managing Director and CEO (naval architect) of Vedam Design and Technical Consultancy Pvt. Ltd.

Jain, along with his former colleagues, Rakesh Roy and Rajnish, founded Vedam in February 2007. The trio pooled together Rs.5 lakh from their personal savings to start the venture. “We decided on the name Vedam because it goes back to the Vedas; we wanted a word that would connote both spirituality and positive energy. Vedam, if expanded, otherwise stands for Vessel Engineering, Design and Application Management,” says Jain.

Today, the firm caters to ship owners and shipyards globally and its portfolio of services includes supervision services for new ship building, conversion and repairs; ship conversion—feasibility to engineering; onboard modifications and installations; production design services; new project assessment; shipyard assessment and identification; and shipyard layout consultancy. “We got our first project from a German ship owner, who had Indian managers working for him. It was for new ship building supervision in China. That kept us in good stead for the first few months. In the initial period, I had to travel a lot for business development. International orders could only be secured through word-of-mouth and networking. The website or any such presence didn’t really matter,” says Jain. After the first project, the founders took a break to focus on R&D and team building.

Spanish Software
“We wanted to offer high-end production design services to Indian shipyards and ship owners. For this, we decided to invest in specialized Spanish software called FORAN that would enable us to do complete 3D modeling of the ship during the design process. This investment was a must if we had to meet global design standards. We expanded our team, hosted trainers from Spain and built in-house capabilities for use of the FORAN software. Today, we are the official representatives of FORAN in India,” says Jain.

As the venture scaled and the team grew, the founders felt the need for additional seed capital. Captain S. Bharatan and Captain Carl Fernandes, their seniors from the previous job, who had supported their venture right from the inception stage, stepped on board as investors at this juncture. “We had hired these kids when they were fresh out of college to facilitate the new building program in our earlier company (the Indian arm of a U.S. shipping company called OMCI). During the program, they were posted in Korea and got first-hand exposure at some of the best shipyards in the world. Over time, our new building program died. Post that, we gave these kids a chance to sail on some of our ships. This gave them a chance to understand ships and their utility from a seafarer’s perspective. Seafarers are the end-users of ships and designers often fail to understand ships from their viewpoint. This team got a chance to do that. Eventually, this became their strength and advantage over other design shops. While they were still with us, they helped our design team with certain inputs and those ships came out very well. So we knew they had the ability to grow a business in this space. We had also sent Akshay to Hamburg where the world’s biggest shipping trade fair happens each year. Akshay met the FORAN guys for the first time at that trade fair and they showed faith in his idea. That was a big confidence booster for all of us. Between Captain Bharatan and me, we invested Rs.38 lakh into the venture. They have done fairly well for themselves in the past three years and there have been no complaints from the recipients of the business viz. customers,” says Captain Carl Fernandes, Managing Director, Medallion Marine Pvt. Ltd.

Design Talk
Vedam got its first production design order from Shoft Shipyard in Gujarat for an accommodation barge the latter was building. “Design is the source of the vessel. If the design goes wrong, everything else holds the possibility of going wrong. Shoft took the risk and gave us the contract,” says Jain. Talking about the industry scenario at large, Roy says, “The designs that were available in the Indian market were not detailed enough. We wanted to build engineering models that would go down to the nuts and bolts of the production process. This would help us to offer a complete ‘Bill of Materials’ to our clients. The main benefits of error-free (detailed) production designs are better quality output, avoidance of rework on the site, saving of additional expenses, flexibility in design, and optimum usage of human resources. However, to sell this idea to conventional Indian shipyards was a Herculean task.”

In July 2008, a German ship owner ordered six new ships to be built in Bangladesh. Vedam earned the supervision contract for these new ships that were to be built and sent its team to Bangladesh to be the owners’ representative on the site. “We helped the client at all stages, right from the identification of the shipyards to supervision of the actual process. Each of these projects was big and the worth huge,” says Jain. Talking about the recession that set in the same year, he further says, “The recession didn’t really hit us till 2009 when other companies started recovery. Tenure of projects in shipping industry is generally long. So the orders we had got in late 2007 and early 2008 kept us occupied till year-end. It was only in early 2009 that we felt the first jerks of tight budgets and a lack of fresh orders. By late 2009, though, things were back on track. We had a lot of inquiries lying with us and several of them got converted into successful project orders.”

Scaling Up
Today, Vedam operates like a professional enterprise with documented workflows and project time sheets. The founders realized that their presence was becoming essential for each big project that the firm undertook. This could hamper long-term productivity and scaling up of operations. “The company cannot always be a startup where the founders manage everything. Having realized that, we put standard processes in place for all enterprise functions including HR, finance and operations. That was a challenge in itself as operating as individual consultants is far simpler. We are documenting all the work that we have done so far so that there is a ready archive for the reference of new recruits. For our international clients, the main attraction we offer is cost-competitiveness without compromising the quality of work. To maintain that cost advantage, we have to hire fresh talent and train people in-house as experienced workers are much more expensive,” says Jain.

Looking Ahead
Going forward, the company wants to invest in R&D and build its own IP (Intellectual Property) database. “We want to backward integrate and start building root or basic designs. Let me explain this to you with an example. The team that must have built the first Nano on the production floor would have referred to the production design and built it. However, before that stage, someone would have conceptualized a four-wheeled compact vehicle with a capacity for four passengers and with an engine on the rear end. That is basic or root design before the fabrications stage. We want to do the same for ships. A production design is specific to one shipyard while one root design can be sold to various shipyards and they can then customize the same. Till now, we are a services firm. If we create our own root designs, that will be like creating our own products. So we will then be a product and services firm,” concludes Jain.