Ports and Special Economic Zone (APSEZ), part of the $12 billion Adani
Group and the leading private ports operator in the country that handles about 15 per cent of India’s export-import cargo
is working on diversifying its cargo
mix to reduce dependence on individual commodities. It’s moving towards long-term cargo
contracts to provide resilience to volumes.
The share of long term contracts has increased from 59 per cent of overall cargo
volumes in FY15 to 62 per cent in FY17, clocking a compounded annual growth rate (CAGR) of 10.7 per cent. In comparison, share of short-term contracts have come down from 41 per cent to 38 per cent during the same period. At the same time, total cargo CAGR
through FY15 to FY17 is 8 per cent or so.
Coal is a key cargo
item for APSEZ
and is part of its long-term contracts. This year it will focus on coal cargo
at Dhamra, which would also handle fertilisers, steel and agri-commodities. However, coal volumes continue to be a concern for both ports and railways since better availability of domestic coal has slowed down imports.
In fact, India's seaborne coal imports
have dropped in the first seven months of the year by 13.4 per cent to 105.36 million tonnes.
Karan Adani, chief executive officer, APSEZ) thus said, "In line with our goal to reduce dependence on individual commodities and to offset the decline in coal imports
following the government's revised policy, we ramped our efforts to diversify our cargo
mix and increase container volumes.In FY17, 62 per cent of our cargo
volumes materialised from long-term contracts."
He added: "We moved from short-term contracts to long-term multi-year coal supply arrangements for a large number of customers."
Compared to China, India's coal imports
are slowing down as the government has stated a policy of reducing coal imports
to zero eventually and it is boosting the domestic coal production besides focussing on efficient distribution of the commodity within the country.
Coal comprises 37 per cent of APSEZ's overall cargo
volumes. This has come down from 47 per cent in FY15. In contrast, share of container cargo
have grown from 29 per cent of total cargo
volumes in FY15 to 37 per cent in FY17. Adani
explained, "We saw a growth in agriculture, iron,steel, and project cargo
volumes, which contributed to a healthy cargo
mix and higher margins. FY17 saw containers constitute 37 per cent of our total cargo, compared to 32 per cent in FY16. Coal now comprises 36 per cent of our cargo,compared to 41 per cent last year. Crude and other cargo, which grew by 17 per cent, now constitute 27 per cent of the total cargo.
The company expects overall container volumes to grow by 20 per cent and overall cargo
volumes between 12-14 per cent in FY18. "We estimate a rise in EBITDA margins from 69 per cent to 70 per cent through enhanced use of technology, diversified cargo
mix and higher capacity utilisation," Adani
In FY18, all-India port cargo
volumes grew by 8 per cent, APSEZ cargo
volumes grew 11 per cent. Of this, container volumes grew by 27 per cent YoY against the 10 per cent growth achieved by ports all-India, thus expanding APSEZ's market share from 27 per cent to 31 per cent, the company claimed in its latest annual report.