Dear Fellow shareholders
I am writing this letter with a sense of pride by sharing the economicand business outlook and consistent achievements of your Company on all fronts.
As per report of International Monetary Fund (IMF) global economy grewat 3.6% during the year 2018 whereas the GDP in India grew at 6.8% during 2018-19. Inorder to give a boost to the economic growth Government has been addressing the issuesthrough its policies and structural initiatives to achieve sustainable future growth. Inthis direction steps like Make in India Digital India Creation of InfrastructureSagarmala Project GST recapitalization of banks IBC etc. are commendable which willhelp in overall development.
As you know it was yet another year of low growth rate of globaleconomy the geopolitical uncertainties and environment of trade restrictions among majoreconomies in the world disrupting global trade and commerce. Due to widening gap in importand export and slow growth of import logistics services for EXIM trade has suffered.lnspite of this kind of adverse environment CONCOR has performed well during the year2018-19 because of innovative steps dynamic approach and most importantly a committed anddedicated team In the year 2018-19 Indian Railways registered a growth of 5.31% inoriginating loading of cargo from 1161.66 million tonnes in 2017-18 to 1223.29 milliontonnes in the current year. The originating containerized cargo transported by railincreased from 54.31 million tonnes in 2017-18 to 60.34 million tonnes in 2018-19 anincrease of 11.10%. The containers handled at all ports of the country registered a growthof 4.90% from 14.69 million TEUs in 2017-18 to 15.41 million TEUs in 2018-19. In thechallenging scenario faced by the trade CONCOR has delivered its best performance during2018-19. It has handled 3.83 million TEUs and transported 43.50 million tonnes of cargovolume by rail in 2018-19 an increase of 8.42% and 8.83% respectively over the previousyear. There was 8.11% and 10.23% growth in the physical volumes of both EXIM and domesticsegments of businesses respectively. During the year it achieved a gross turnover and netprofit of Rs.7216 crores and Rs.1215 crores respectively and the net worth of theCompany increased to Rs.10368 crores from Rs.9374 crores in the previous year. The TEUshandled gross turnover and net profit for the year 2018-19 were the highest ever achievedby your Company in any year.
The positive business outlook in the long term for the logistic sectoris intact for which your Company is well geared up and committed. During the year anamount of around Rs.768 crores was spent toward capital expenditure mainly on creation ofinfrastructure in the form of setting up of MMLPs at strategic locations procurement ofhigh capacity wagons containers and other handling equipments. The Company has operatedthrough its 83 terminals last year and will be adding another 8-10 in the current yearwith the target to reach 100 in next 2-3 years. The above measures will result in businessgrowth through substantial augmentation of handling capacity locational advantage valueadded services and exposure to other segments of value chain. The commencement ofoperations on Dedicated Freight Corridors (DFCs) in future will be an added advantage asthe Company is well geared up through its network of terminals to tap the expectedbusiness growth from the same.
Recently CONCOR has participated in Freight Advance Scheme of theIndian Railways in which initially it has paid an advance of Rs.3000 crores which hasinsulated it from any rail freight hike during FY 2019-20 till the advance remains withthe Railways. The Company has not only quickly passed this benefit of no freight increaseto the customers but has also committed that charges like handling and warehousing willnot be increased for one full year. This has been received well by the customers. Inaddition to this the Company has brought in 45 days and 90 days free time taking awayall worries of customers. These initiatives are path breaking and right steps towards easeof doing business. CONCOR is committed to providing best quality services and our ethos is"Customer Value Creation". It has always believed in sustainable &responsible growth and has been taking innovative steps in marketing to meet customer'sexpectations towards reliable and cost effective services.
Due to the challenges of rising competition particularly from the roadsector and PCTOs our endeavour is to retain market share in containerized railtransportation as well as in creating new business verticals. The benefits of runningdouble stack trains from Mundra/Pipavav Ports to Khatuwas and vice-versa are continuing toaccrue which has helped in containing the cost of empty running enhancing railco-efficient and made our services more competitive.
Your Company has formulated several strategies which include setting upof MMLPs at vantage locations along the Dedicated Freight Corridors (DFCs) and majorindustrial areas setting up Private Freight Terminals (PFTs) with road bridgingsolutions venturing internationally extensive use of information technology setting upextended gateway facility providing various value added services i.e. cross dockingwrapping labelling palletization bar coding and introducing mobile app etc. As a partof overall strategy of expansion and entry into new areas of business to complementCompany's position as a Multimodal Logistics service provider it has forayed into coastalshipping by starting operations in January 2019 at the West Coast. Going forward it isplanning to add such services at East Coast going upto Bangladesh. It has also enteredinto Distribution Logistics business in which 20 nodes across India have been identifiedwhich will be developed in PPP mode by selecting business partners through open tenderingprocess. At these Distribution Logistics centres the services to operate modernwarehouses and to maintain/ manage inventory and distribution of the products will beprovided. Therefore your Company is well poised to reap the benefits from theopportunities arising from GST implementation commencement of DFC and new businessavenues in the field of warehousing e- commerce 3PL/ 4PL distribution logisticscoastal shipping etc.
Your company believes that economic recovery and increase in the EXIMtrade will give boost to the growth plans. The large number of Industrial Parks SEZs etc.are being established by State Governments and Ports which offers your Company anexcellent opportunity for serving as logistics partner for the states/industrial estatesthrough arrangements of mutual benefits. There is tremendous business potential forproviding logistics services in air cargo bulk transportation of commodities Food SupplyChain Management Distribution Logistics and Integrated Logistics & ManufacturingZones (ILMZs) for which effective steps have been taken by the Company.
The Company is committed for digital transformation to leverage ITcapabilities to achieve the competitive advantage. It has taken many IT initiatives whichinclude implementation of e-office e-payment to contractors Know Your Container Location(KYCL) providing continuous cargo visibility to the customers through mobile app. SMSalerts and interactive website.
The Company follows transparent practices in doing its businessesparticularly in the areas of Corporate Governance and its Social Responsibilities. Thishas created an environment of trust and has helped in winning the confidence of thestakeholders. The CSR initiatives taken by the Company in the field of education healthsanitation environment sustainability and skill development etc. have touched andpositively impacted the lives of many underprivileged people. Going forward it is nowcommitted to carry out these activities in the aspirational districts identified byGovernment of India with prime focus on education health and nutrition.
I would like to place on record my sincere appreciation for Company'sBoard of Directors and Ministry of Railways for their continued guidance and support. Iwould like to express my gratitude to all our shareholders esteemed customers ourbusiness associates for having reposed faith in us. My special thanks to the entire CONCORteam whose commitment will take this Institution even to greater heights in times tocome.
|With best wishes ||Sd/- |
|Date : 31.07.2019 ||(V. Kalyana Rama) |
|Place : New Delhi. ||Chairman and Managing Director |