The ship-breaking activities at Azhikkal Steel Industries Kerala Limited (SILK), a public sector undertaking, has witnessed a sharp decline in recent years. The fall is attributed mainly to the low market value of iron scrap. Currently, the unit survives on small construction orders from both government and private entities. Ship-breaking has traditionally been the primary source of income for the Azhikkal unit.

Established in 1984, the facility has dismantled more than 30 ships over the last 41 years. Most of these vessels were oil tankers from the Maldives. In 2024–25, the unit dismantled a naval submarine, INS Sindhudhvaj.

The cost of dismantling a ship at the unit is fixed at ₹4,525 per tonne, plus service tax. However, SILK subcontracts the actual dismantling to private contractors at a lower rate of ₹2,400 per tonne, in addition to GST.

Depending on the size of the ship, SILK earns between ₹25 lakh and ₹50 lakh per project. Agencies typically bring in vessels and SILK carries out the dismantling work on a subcontract basis.

Ship-breaking once thrived at ports such as Chennai, Kolkata, Mumbai and Alang in Gujarat. But a crash in scrap material prices has dealt a severe blow to the industry.

“When scrap prices fall, it adversely affected ship-breaking,” a representative of an agency said.

Many ships destined for Gujarat are now diverted to Bangladesh for dismantling. Bringing a ship via Kochi to Azhikkal costs more than ₹30 lakh. In addition, crew salaries and rising fuel expenses will create even more losses.

Five years ago, environmental activists staged a protest alleging oil leaks during dismantling were polluting the sea, further hampering the unit’s functioning.

Ship Drift and Setbacks

In 2019, two ships were brought to the Azhikkal unit of Steel Industries Kerala Limited for dismantling. However, one of them drifted off course in the Dharmadam sea and sank. Even after six years, efforts to shore up Azhikkal have failed. Another vessel that did reach Azhikkal could not be brought ashore to the SILK yard. Instead, it had to be cut and dismantled along another stretch of the coast.

Steel and Houseboats

Over the years, the Azhikkal unit has built around 60 steel boats, mainly for the State Water Transport Department.

Two passenger boats are currently in service on the Valapattanam river, one operating on the Mattool-Azhikkal ferry route and another on the Mattool-Valapattanam Parassinikkadavu route. A houseboat was constructed for the Mayyil Royal Tourism Society.

Slipway lost in the woods

The mechanical slipway (a facility to haul boats ashore) constructed at the SILK yard now lies abandoned amid overgrown vegetation. Built in 2021 at a cost of ₹3 crore, it was used only two or three times to launch and retrieve boats before operations came to a halt due to technical faults. As a result, nearly 125 meters of waterfront has been rendered unusable.

However, SILK unit manager PS Prashobh stated that once the second phase of the slipway project is completed, regular boat hauling and launching will be possible. Efforts toward this have already been initiated.

Golden Jubilee Milestone

Currently, SILK is celebrating its 50th anniversary. The corporate office was first established in Athani, Thrissur, in 1975. Over the years, units were set up at Cherthala, Beypore, Azhikkal, Thuravoor, and Ottapalam.

At present, 221 employees work across various divisions. In 2024–25, the company recorded sales worth ₹74.89 crore, with an operational profit of ₹4.39 crore.

As part of diversification, SILK is also in the process of setting up a Registered Vehicle Scrapping Facility in collaboration with the Motor Vehicles Department. The company is additionally exploring the possibility of manufacturing aluminium boats.