'We believe that Green Ports are truly the future of the industry"
We have taken numerous steps, and have invested significantly, to reduce the carbon footprints of all our terminals.
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[/vc_column_text][vc_column_text]We have taken numerous steps, and have invested significantly, to reduce the carbon footprints of all our terminals.
What has been the growth scenario (including investment) in the port sector in general for the last couple of years? How do you expect the future growth to be and what has been Essar's performance?
During April to December FY 20, the Indian Major Ports handled 524 MT of traffic compared to 519 MT in the corresponding period of FY 19, registering an increase of 1%. Non-major ports are expected to have a growth of around 4 - 5%.
During the same period Essar Ports has seen a growth of 29% in its traffic. We expect the company to continue to grow at more than 20% over next few years. In the coming years, the sector is poised to grow at a much faster rate, and we expect our business to continue surpassing the sector growth. This expectation is set by the emerging trends in the sector that includes rising demand for moving bulk cargoes, need for coastal movement of cargo, and the governments push to achieve a faster GDP growth.
With focus on India becoming a USD 5-trillion economy in the near future, Essar Ports is well placed to enable the pace of business of its customers, paving way for sustainable growth. All our facilities are capable of handling different types of cargo, and hence our business is well-placed to overcome any cargo risk in the future.[/vc_column_text][vc_column_text]What is the existing cargo handling capacity of Essar and is there any more capex on the anvil for capacity augmentation?
Essar Ports specializes in development and operations of ports and terminals for handling dry bulk, break bulk, liquid and general cargo. Essar Ports currently operates four terminals—two each on the east and west coasts of India. The terminals are located in Hazira and Salaya in Gujarat, and one each in Visakhapatnam Port and Paradip Port. Current operational port terminal capacity in India is 110 MTPA with investments exceeding USD 1.5 billion. All our terminals are scalable with potential to expand. We aim to continue investing in the expansion of our capacity (modular in nature) and enhance our operational efficiencies.[/vc_column_text][vc_single_image image="34638″ img_size="full" alignment="center"][vc_column_text]What is the projected growth by 2020-21 and what do you think the growth enablers?
The Company has witnessed healthy growth across all its terminals on the back of increased cargo handling performance. It has been consistently surpassing sectorial benchmarks of performance. In FY20, till date the company recorded a growth of 29%. We expect to surpass the same in FY 21, and also surpass all industrial benchmarks.[/vc_column_text][vc_column_text]Key Factors for Growth are:
- Capacity expansion at our terminals and enhanced capacity utilisation of existing customers
- Delivering operational efficiency and high service levels to customers consistently
- A balanced cargo mix
- Long-term cargo handling agreements with existing customers, ensuring sustainability
- New customer additions across our facilities
[/vc_column_text][vc_column_text]Brief us on the initiatives taken to ensure better turnaround schedules by Essar?
Essar Ports has deeper drafts that help us accommodate larger vessels. This enables economies of scale and lowers import costs. Our mechanized facilities for unloading/ loading, stacking and reclaiming, and evacuation ensures faster turnaround of vessels.
Our automated loading and unloading systems reduces human intervention, and enhances efficiency and safety in operations. [/vc_column_text][vc_column_text]What are the major challenges the Port Sector is facing? Also tell us about the delay of Major Ports Authorities Bill?
The infrastructure sector faces myriad systemic challenges across the project lifecycle like project financing, liquidity constraints, lack of project off-take (i.e. low capacity utilization), change in market dynamics over long tenure, commodity price fluctuations, sub-optimal risk sharing mechanism, and a challenging regulatory environment due to which there are delays in approvals and commissioning of Projects.[/vc_column_text][vc_column_text]Key challenges in the sector are:
- High logistics cost (13% of GDP) in India,that making exports highly uncompetitive
- High cost of financing as compared to the one secured by theGovernment for similar projects, and as compared to international benchmarks
- Bidding for projects prior to approvals from the Awarding Authority leading to significant delays
- Bidding for projects at high revenue share, makingit unsustainable in the long term
- Project delays on account of delay in approvals, financing, litigation, land acquisition & other local issues
- Risks on account of changing market dynamics and commodity risks
- Non-availability of hinterland connectivity through road and rail, hindering ease of evacuation and reducing competitiveness
- Base cargo non-availability,making greenfield projects unviable
- Non equitable risk sharing in PPP projects between Concessioning Authority & Concessionaire
- Inability of Concessioning Authority to provide relaxation to Concessionaires, especially when there are genuine limitations faced by the Concessionaire to discharge obligations
- We expect the Major Ports Authorities Bill to be implemented soon which will address some of the key issues highlighted above.
[/vc_column_text][vc_column_text]There has been so much talk about greening the port activities? What is the contributory role played by Essar in this area?
As a company, we are cognizant of the environmental impact of our activities, and have strong policies and culture in place to ensure that our operations have a positive impact on the environment and stakeholders. We, at Essar Ports, believe that Green Ports are truly the future of the industry. We have taken numerous steps, and have invested significantly, to reduce the carbon footprints of all our terminals. By implementing revolutionary technologies such as cold-fog system, ensuring complete mechanized handling of cargo and,most notably, covering the entire conveyor system, we have been highly successful in reducing emissions and zero spillage.[/vc_column_text][vc_column_text]Telematics, Big Data analytics, embedded technologies have had a huge impact on almost all the business verticals. To what extent Essar has been able to leverage the efficacies of these advanced technologies?
Technology deployment has been one of the core philosophies of the company while developing & operating our facilities. We believe that innovative technological solutions will ensure that ports are future ready as India journeys to be a USD 5-trillion economy and more. Some of the technology initiatives at our facilities are:[/vc_column_text][vc_column_text]
- Vessel scheduling and vessel traffic management systems, ensuring safe operations and efficient planning
- State-of-the-art IT systems, ensuring round-the-clock uptime and monitoring of our facilities
- Fire fighting and dust suppression systems like the cold fog systems, minimising pollution and ensuring sensitivity to all the stakeholders
- Data analytics and investments ensuring continuous-improvement of operational efficiency
- Automated Mechanised Systems:
- Screw type ship unloaders – one of the highest rated in India
- Integrated conveying systems, spanning ~50 km across 4 terminals
- Grab type ship unloaders
- Ship loaders - biggest and highest capacity in India
- Wagon tipplers - twin and rotary
- Stackers, reclaimers and stacker-cum-reclaimers
- Centrally controlled systems minimising human intervention.
[/vc_column_text][vc_column_text]What are the strengths and competencies of Essar Ports?
- State-of-the-art mechanized facilities at strategic locations on both the east and west coasts of India
- Deep drafts, enabling larger parcel size ship to call upon and ensuring that customers enjoy economies of scale
- Faster turnaround of vessels, reducing overall logistics and import costs
- Ensuring operational efficiency and high service levels to customers on a consistent basis
- A balanced cargo mix
- Long-term cargo handling agreements with existing customers, ensuring sustainability
- Scalable terminals with the flexibility to enhance and modify them, keeping industry and trade requirements in mind
[/vc_column_text][vc_column_text]Tell us about your road map for the next five years.
- Enhance capacity utilization of existing terminals
- Invest in new technologies ensuring the ports are future-ready
- Ensure operational efficiency and high service levels to customers on a sustainable basis
- Undertake modular expansions at existing facilities, and ensure that customers' demands and requirements are met
- Cargo and customer diversification
- Scout for opportunities to expand and grow our business further, so as to benefit all our stakeholders.
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