PORTS - IBEF · transport goods to and from ports, with higher efficiency and at lower cost. Indian...

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1 JANUARY 2017 PORTS JANUARY 2017 For updated information, please visit www.ibef.org

Transcript of PORTS - IBEF · transport goods to and from ports, with higher efficiency and at lower cost. Indian...

Page 1: PORTS - IBEF · transport goods to and from ports, with higher efficiency and at lower cost. Indian Port Rail Corporation Limited (IPRCL), plans to conduct rail infrastructure expansion

11JANUARY 2017

PORTS

JANUARY 2017 For updated information, please visit www.ibef.org

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22JANUARY 2017 For updated information, please visit www.ibef.org

Executive Summary…………………………3

Advantage India……………………….……..5

Market Overview & Trends………………….7

Porter Five Forces Model Analysis ………18

Strategies Adopted………………..……….20

Growth Drivers………………………..…….22

Opportunities………………………………..39

Success Stories………………..………. ….41

Useful Information…………………………..47

PORTS

JANUARY 2017

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33JANUARY 2017

466.1

815.2

FY16 FY17E

606.37943.1

FY16 FY17E

For updated information, please visit www.ibef.org

Source: Ministry of Shipping, TechSci Research

Notes: E – Estimates, MMT - Million Metric Tonnes

PORTS

By FY17, cargo capacity in

India is expected to increase to

2,493.1 MMT from 1,806.8

MMT in FY15

Increasing trade activities and

private participation in port

infrastructure set to support

port infrastructure activity

By FY17, cargo traffic at major

ports in India is expected to rise

to 943.1 MMT from 606.37

MMT in FY16 at a YoY of 55.53

per cent

India has 12 major ports

By FY17, cargo traffic at non-

major ports in India is expected

to grow to 815.2 MMT from

466.1 MMT in FY16

India’s 200 non-major ports are

strategically located on the

world’s shipping routes

EXECUTIVE SUMMARY … (1/2)

CAGR: 55.53%

CAGR: 17.5%

1806.82493.0

FY15 FY17MMT

CAGR: 75%

MMT

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43.6

228

FY15 FY17(E)

MMT

8.20

21

FY16 FY17E

For updated information, please visit www.ibef.org

Source: Ministry of Shipping, TechSci Research

Notes: FY17 (E) – Estimates, TEU – Twenty Foot Equivalent Unit, MMT - Million Metric Tonnes

PORTS

By FY17, container demand in

India (For major ports) is

expected to increase to 21

million TEU from 8.2 million

TEU in FY16

Trade to boost demand for

containers

By FY17, iron ore traffic (For

Major & Minor ports) is

expected to rise to 228 MMT

from 43.6 MMT in FY15

Infrastructural development to

increase demand for iron and

steel

EXECUTIVE SUMMARY … (2/2)

CAGR: 156%

CAGR: 128.7%

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ADVANTAGE INDIA

PORTS

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66JANUARY 2017

Growing demand

For updated information, please visit www.ibef.org

ADVANTAGE INDIA

Source: Report of the Task force on Financing Plan for Ports, Govt. of India, TechSci Research

Notes: FY – Indian Financial Year (April–March), NMDP – National Maritime Development Programme, FDI – Foreign Direct Investment, USD – US Dollar,

E – Estimated, MMT – Million Metric Tonnes, CAGR – Compound Annual Growth Rate

Robust demand

• Port traffic in India is set to rise at a CAGR of 29.2 per cent over FY15–17

• CAGR in traffic :

• Non-major ports: expected to increase by 140.5 per cent to 815 MMT by 2017 from March 2016

• Major ports: expected to increase by 55.5 per cent to reach 943 MMT by 2017 from FY16 (April-December 2015)

Attractive opportunities

• Non-major ports are set to benefit from strong growth in India’s external trade

• Special Economic Zones are being developed in close proximity to several ports – comprising coal-based power plants, steel plants and oil refineries

Policy support

• The government initiated NMDP, aninitiative to develop the maritime sector;the planned outlay is USD11.8 billion

• FDI of 100 per cent under the automaticroute and a ten year tax holiday forenterprises engaged in ports

• Plans to create port capacity of around3200 MMT to handle the expected

• traffic of about 2500 MMT by 2020

Competitive advantages• India has a coastline which is more than

7,517 km long, interspersed with more than 200 ports

• Most cargo ships that sail between East Asia and America, Europe and Africa pass through Indian territorial waters

• India is the largest importer of thermal coal in the world

FY16

Cargo

traffic in

MMT:

1072.47

FY17E

Cargo

traffic in

MMT:

1,758.3

Advantage

India

PORTS

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MARKET OVERVIEW AND TRENDS

PORTS

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88JANUARY 2017 For updated information, please visit www.ibef.org

THERE ARE TWO BASIC CATEGORIES OF PORTS IN INDIA

Source: Ministry of Shipping; TechSci Research

PORTS

• There are 12 major ports in

the country; 6 on the

Eastern coast and 6 on the

Western coast

• Major ports are under the

jurisdiction of the

Government of India and

are governed by the Major

Port Trusts Act 1963,

except Ennore port, which

is administered under the

Companies Act 1956

• India has about 200 non-

major ports of which one-

third are operational

• Non-major ports come

under the jurisdiction of the

respective state

Governments’ Maritime

Boards (GMB)

Ports in India (2015)

Major Non-major (minor)

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99JANUARY 2017 For updated information, please visit www.ibef.org

MAJOR PORTS IN INDIA

Note: JNPT – Jawaharlal Nehru Port Trust

PORTS

Mumbai

JNPT

Kandla

Mormugao

New Mangalore

Cochin Tuticorin

Chennai

Ennore

Visakhapatnam

Paradip

Kolkata

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1010JANUARY 2017

463.6519.2 530.4

561 569.8 560.1 545.6 555.3581.3

606.37

943.1

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17E

For updated information, please visit www.ibef.org

Cargo traffic at major ports (MMT)

Source: Ministry of Shipping, TechSci Research

Notes: MMT – Million Metric Tonnes,

CAGR – Compound Annual Growth Rate,

FY – Indian Financial Year (April–March),

E – Estimated

Cargo traffic at major ports in India –

Stood at 606.37 MMT in FY16

Increased at a CAGR of 7.4 per cent during FY07–17E

Cargo traffic in 2017 at major ports is expected to reach

943.1 MMT

During April to September 2016, 12 major ports in India

handled 315.4 MT (Million Tonnes) of cargo, showing a

growth of 5.1 per cent in comparison to the same time

during previous year.

CARGO TRAFFIC IS ON THE RISE … (1/2)

PORTS

CAGR: 7.4%

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1111JANUARY 2017

71

.4%

71

.8%

71

.3%

66

.0%

64

.4%

61

.3%

58.4

%

57

.1%

55

.2%

56

.5%

53

.6%

28

.6%

28

.2%

28

.7%

34

.0%

35

.6%

38

.7%

41.6

%

42

.9%

44

.8%

43

.5%

46

.4%

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17E

Major Ports Non Major Ports

186.1 203.6 213.2288.9 314.9

353.0 387.9 417.1471.2 466.1

815.2

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17E

For updated information, please visit www.ibef.org

Percentage share of ports

CARGO TRAFFIC IS ON THE RISE … (2/2)

PORTS

Non-major ports are evolving faster than major ports-

Non-major ports are gaining shares and a major chunk of

traffic has shifted from major ports to non-major ports

The contribution of non-major port’s traffic to total traffic

rose to 43.5 per cent in FY16 from 28.6 per cent in FY07

Cargo traffic at non-major ports (MMT)Cargo traffic at non-major ports –

Stood at 466.1 MMT in FY16

Cargo traffic has expanded at a CAGR of 10.7 per cent

during FY07–16 and is expected to grow annually at 15.9

per cent during FY07-17

Cargo traffic in 2017 at non-major ports is expected to reach

815.2 MMT

Source: Ministry of Shipping, TechSci Research

Notes: MMT – Million Metric Tonnes, CAGR – Compound Annual Growth Rate,

FY – Indian Financial Year (April–March); E – Estimate

CAGR: 15.9%

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1212JANUARY 2017 For updated information, please visit www.ibef.org

Source: Ministry of Shipping; TechSci Research

Note: Other cargo includes Fertiliser Raw Material (dry) and food-grains

Cargo at major ports in FY15

Solid Liquid

(petroleum, oil

and lubricants)

Container

Share: 47.0%Share: 33.7%

Share: 22.5%

Iron ore

Coal

Fertilizer

Other cargo

Share: 2.8%

Share: 20.4%

Share: 2.8%

Share: 20.9%

Cargo at major ports in FY16

Solid Liquid

(petroleum, oil

and lubricants)

Container

Share: 46.4%Share: 33.3%

Share: 20.3%

Iron ore

Coal

Fertilizer

Other cargo

Share: 2.1%

Share: 22.7%

Share: 2.6%

Share: 18.9%

CARGO PROFILE AT MAJOR PORTS IN INDIA … (1/2)

PORTS

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23

5.9

258.2

26

1.2

28

4.7

27

6.6

26

0.9

23

9.9

25

3.5

273

28

1.1

8

15

4.3

168.7

17

6.1

17

5.1

17

9.1

17

9.1

18

5.9

18

7.2

188.9

20

2.373

.2 92

.3

93

.1

10

1.2

11

4.1

12

0.1

11

9.8

11

4.6

119.4

12

3.1

8

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Solid Liqiud Container

For updated information, please visit www.ibef.org

Cargo traffic at major ports (MMT)

Source: Ministry of Shipping; Indian Ports Association (IPA), TechSci Research

Note: Other cargo in Solid includes fertiliser raw material (dry) and food-grains

Between FY07– FY16, cargo traffic grew at CAGR 3 per

cent

Over FY07–16, CAGR in the volume of different segments

was as follows–

Solid cargo was 2 per cent

Liquid cargo was 3.1 per cent

Container cargo was 6 per cent

Cargo traffic during FY16 for solid, liquid, and container

cargo was 281.18, 202.3 and 123.18 MMT, respectively

During April-October 2016, cargo traffic at 12 major ports in

the country was reported at 370.04 MT, showing a growth of

6.27 per cent over the same period during the previous year

CARGO PROFILE AT MAJOR PORTS IN INDIA … (2/2)

PORTS

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50

4.8

53

2.1

57

4.8

61

6.7

67

0.1

68

9.8

74

4.9

80

0.5

2

87

1.5

2

96

5.3

6

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

0

200

400

600

800

1000

1200

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Capacity Utilization (RHS)

For updated information, please visit www.ibef.org

Capacity and utilisation at major ports (MMT)

Source: Indian Port Association, Ministry of Shipping,

TechSci Research

Note: MMT – Million Metric Tonnes

Capacity at major ports grew to 965.36 MMT in FY16,

implying a CAGR of 7.5 per cent since FY07

Despite capacity increasing, utilisation rates have been

gradually coming down post the global economic

meltdown in FY08

Utilisation rates of major ports in India are much above

world’s average

As of November 2016, 12 Major Ports were identified

under Sagarmala project, for cargo handling till 2035.

The objective of this project is to promote port led

development and to provide infrastructure to quickly

transport goods to and from ports, with higher efficiency

and at lower cost.

Indian Port Rail Corporation Limited (IPRCL), plans to

conduct rail infrastructure expansion and modernisation

work for Jawaharlal Nehru Port Trust (JNPT), Kandla

Port and Haldia Dock Complex (HDC) from April 2017.

Similar works have already started for Kolkata,

Vishakhapatnam, Tuticorin, New Mangalore and

Chennai ports.

INCREASE IN CAPACITY OVER THE YEARS

PORTS

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1515JANUARY 2017

3.804.00

4.20

4.63

5.29

4.564.29

3.844.01

2.04

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

For updated information, please visit www.ibef.org

Average turnaround time for major ports (in days)

Source: Ministry of Shipping;, Indian Port Association TechSci Research

Note: Turnaround time – Total time spent by a ship from entry into port until departure

Average turnaround time is influenced by factors such as

type of cargo, parcel size and entrance channel

The average turnaround time improved to 2.04 days in

FY16 from 4.01 days in FY15

DROP IN TURNAROUND TIME IN FY13

PORTS

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1616JANUARY 2017 For updated information, please visit www.ibef.org

Increasing private

participation

• Strong growth potential, favourable investment climate, and sops provided by state

governments have encouraged domestic and foreign private players to enter the Indian

ports sector. In addition to the development of ports and terminals –

• The private sector has extensively participated in port logistics services

• By March’15, around 99 Public Private Partnership (PPP) projects are operational

with a total cost of around USD8813.8 million and capacity of 683.29 million tonnes

per annum.

Setting up of port-

based SEZs

• SEZs are being developed in close proximity to several ports, thereby providing strategic

advantage to industries within these zones. Plants being set up include –

• Coal-based power plants to take advantage of imported coal

• Steel plants and edible oil refineries

• Development of SEZs in Mundra, Krishnapatnam, Rewas and few others is underway

• Government has announced plans to develop 14 CEZs (coastal economic zones) in a

phased manner for port-led development in all the nine maritime states by advancing

efforts to develop one new port, each on the east and the west coast

NOTABLE TRENDS IN THE PORTS SECTOR … (1/2)

PORTS

Focus on draft depth

• All the greenfield ports are being developed at shores with natural deep drafts and the

existing ports are investing on improving their draft depth.

• Higher draft depth is required to accommodate large sized vessels. Due to the cost and

time advantage associated with the large sized vehicles, much of the traffic is shifting to

large vessels from smaller ones, especially in coal transportation

Source: Ministry of Shipping, TechSci Research

Notes: SEZ – Special Economic Zone, PPP – Public-Private Partnership

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1717JANUARY 2017 For updated information, please visit www.ibef.org

Specialist terminal-

based ports

• Terminalisation: Focus on terminals that deal with a particular type of cargo

• This is useful for handling specific cargo such as LNG that requires specific

equipment and hence high capital costs. Forming specialist terminals for such

cargo result in optimal use of resources and increased efficiencies

• Examples of specialist terminals: ICTT in Cochin, LNG terminal in Dahej Port

‘Landlord port’ model

• To promote private investments, the government has reformed the organisational model of

seaports –

• From: A ‘service port’ model where the port authority offers all the services

• To: A ‘landlord port’ model where the port authority acts as a regulator and landlord

while port operations are carried out by private companies

• Major ports following ‘landlord port’ model: JNPT, Chennai, Visakhapatnam and Tuticorin

NOTABLE TRENDS IN THE PORTS SECTOR … (2/2)

PORTS

Rising traffic at non

major ports

• With the increasing private participation in establishing minor ports. Cargo traffic handled

by the minor ports are outpacing cargo traffic at major ports, cargo traffic at non major port

has expanded at a CAGR of 31.5 per cent during FY07–15

• The cargo traffic at major ports was 606.37 MMT in FY16

Source: TechSci Research

Notes: ICTT – International Container Transshipment Terminal, LNG – Liquefied Natural Gas,

MMT – Million Metric Tonnes

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PORTER FIVE FORCES ANALYSIS

PORTS

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1919JANUARY 2017

Source: PricewaterhouseCoopers, Techopak, TechSci Research

PORTER’S FIVE FORCES ANALYSIS

Competitive Rivalry

• Increasing trade activities brought by rising imports of commodities like

coal and crude to generate higher business and limit overall

competition as most ports handle specific geographies

• There have been instances of private managed ports attracting the

share of other ports (usually handled by government agencies) as in

the case of JNPT and Mumbai Port Trust. However, demand expected

to remain strong

Threat of New Entrants

• 100 per cent FDI under

automatic route and income tax

exemption (10 years) is

attracting foreign players.

However, higher capital

expenditure acts as a barrier

• With rising demand for port

infrastructure due to growing

imports (crude, coal) and

containerisation, the threat of

substitute products to remain

weak

Substitute Products

Bargaining Power of Suppliers

• Considerable capacities to be

added going forward. However,

demand to continue to remain

strong

Bargaining Power of Customers

• Imports to continue to remain

strong led by strong demand.

However considerable port

capacities to be added going

forward

Competitive

Rivalry

(Medium)

Threat of New

Entrants

(Medium)

Substitute

Products

(Low)

Bargaining

Power of

Customers

(Medium)

Bargaining

Power of

Suppliers

(Medium)

PORTS

For updated information, please visit www.ibef.org

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STRATEGIES ADOPTED

PORTS

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2121JANUARY 2017

STRATEGIES ADOPTED

• After having a strong advantage on India’s West coast, Adani Ports and Special Economic

Zone Ltd (APSEZ) is looking to strengthen its position by winning the bid of a new

container terminal at Ennore port located on the east coast. Furthermore Adani Ports has

acquired Dharma Port to replicate its development and growth on the eastern coast.

• Essar Ports Limited as a part of it strategic move to increase its potential on the east coast

has won the contract for the modernisation of three ports at Visakhapatnam

• Geographic diversification as in the case of Adani group acquiring coal mines(Australia

and Indonesia) and setting up coal terminal in Australia to take the benefit of increasing

coal imports in India

• Adani group, largest private port operator in India, is now venturing into providing allied

services like dredging. Its dredgers which were being used only at its own ports in the past

have now started taking work from other ports

• Adani group has also ventured into the container railway business becoming the largest

private link in the country. It conducts operations on a pan-india basis operating 6

container rakes

Pan-India presence

Geographic

diversification

Allied activities

Container train

operations

• Port authorities are modernizing and upgrading port facilities to meet the needs of the port

users in competitive environmentModernising

Source: Company website, TechSci Research

For updated information, please visit www.ibef.org

PORTS

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GROWTH DRIVERS

PORTS

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2323JANUARY 2017 For updated information, please visit www.ibef.org

Source: Ministry of Shipping, TechSci Research

Note: NMDP - National Maritime Development Programme

SECTOR BENEFITS FROM STRONG DEMAND, PRIVATE PARTICIPATION

PORTS

Growing demand

Growing demand

Increasing trade

activities resulting

in container traffic

Rising demand for

coal and other

commodities

Growing crude

imports by the

country

Policy support

National Maritime

Development

Programme and

National Maritime

Agenda

FDI of up to 100

per cent under the

automatic route

Various sops and

incentives for

private players to

build ports

Increasing

investments

Increasing

investments in

building ports and

related activities

Private equity

supporting private

port developers

Increasing

investments by

foreign players

Innovation

Expanding port

development and

distribution

facilities in India

Use of modern

technology

Providing support

to global projects

from India

Resulting DrivingInviting

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2424JANUARY 2017

18

5

17

9

25

0 30

6

30

0

31

4

31

0

26

2

43

30

4

28

8

37

0

48

9

49

1

45

0

44

8

38

1

54

FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17

Export Import

For updated information, please visit www.ibef.org

India’s external trade flows (USD billion)

Source: Ministry of Commerce, TechSci Research

CAGR: For Imports from FY09-15

FY171: Data available for April - May 2016

India’s total external trade have grown to USD643 billion in

FY16, implying a CAGR of 4 per cent since FY09

Ports handle almost 95 per cent of trade volumes; thus

rising trade has contributed significantly to cargo traffic

INDIA’S PORTS ARE BENEFITTING FROM STRONG GROWTH IN EXTERNAL TRADE … (1/2)

PORTS

CAGR: 4%

1

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2525JANUARY 2017

73.4

92.3 93.1101.2

114.1120.1 119.8

114.6 119.4 123.2

31.1

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17

For updated information, please visit www.ibef.org

Container traffic at major ports (MMT)

Source: Indian Ports Association, TechSci Research

Note: MMT – Million Metric Tonnes

FY171: Data available for April - May 2016

Increasing trade is translating into higher demand for

containerisation due to their efficiency

During FY07–16, container traffic rose to 123.2 MMT,

implying a CAGR of 5.9 per cent

During FY171, container traffic stood at 31.1 MMT

INDIA’S PORTS ARE BENEFITTING FROM STRONG GROWTH IN EXTERNAL TRADE … (2/2)

PORTS

CAGR: 5.9%

1

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2626JANUARY 2017

11

1.5

12

1.6

7

13

2.7

8

15

9.2

6

16

3.6

17

1.7

3

18

4.8

18

9.2

4

18

9.4

4

20

2.8

5

53

.15

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17

For updated information, please visit www.ibef.org

Crude imports (MMT)

Source: Handbook of Indian Statistics (RBI),

Petroleum Planning and Analysis Cell, TechSci Research

Notes: MMT – Million Metric Tonnes,

FY171 – Data available for April – June 2016

A consequence of strong GDP growth has been rising

energy demand; the country currently meets about 75 per

cent of total crude oil demand by imports

India’s crude imports touched 202.85 MMT in FY16,

implying a CAGR of 6.9 per cent over FY07–16

PORTS TO BENEFIT FROM GROWING CRUDE IMPORTS … (1/2)

PORTS

1

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2727JANUARY 2017

15

4.3

16

8.7

17

6.1

17

5.1

17

9.1

17

9.1

18

5.9

18

7.2

18

1

195.8

81

.2 91

97

.8

13

7.7

14

5.4

15

6.3

16

8.6

16

9.8

16

7.3

180.9

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16(P)

Major Ports Minor Ports

For updated information, please visit www.ibef.org

POL traffic (MMT)

Source: Ministry of Shipping, TechSci Research

Notes: POL – Petroleum, Oil, and Lubricants,

MMT – Million Metric Tonnes

P – Provisional

Private ports have been especially good at attracting

crude import traffic

POL have been the major contributors to total traffic

at ports and contributed 33.3 per cent in FY16

POL traffic at both major and non-major ports added

up to 376.7 MMT in FY15, implying a CAGR of 5 per

cent over FY07–15

POL traffic in FY16 is expected to reach 376.7 MMT

PORTS TO BENEFIT FROM GROWING CRUDE IMPORTS … (2/2)

PORTS

CAGR: 5%

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2828JANUARY 2017

60

83.5

132.2

160.9

192.5

168.5

212.1

111.68

FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

For updated information, please visit www.ibef.org

Coal supply gap (import requirement) (MMT)

Source: Ministry of Coal, TechSci Research

Notes: The figures from FY9–14 in the above graph are as per the data

provided by Coal Ministry Annual Reports, and the figure for FY17 is

taken from the erstwhile Planning Commission Report data sourced

from Coal Ministry Annual Report,

FY161 – Data available till October 2015

India is the largest importer of thermal coal in the world and

this is expected to grow due to increased demand for power

as coal-based power stations were the biggest contributors.

A major chunk of this import is transported by sea

With growing demand for power, coal imports reached to be

111.68 MMT in FY161

INCREASING COAL IMPORTS SET TO DRIVE RISING CARGO TRAFFIC … (1/2)

PORTS

Notes:: GW – Gigawatt, MMT – Million Metric Tonnes

CAGR: 19.60%

1

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2929JANUARY 2017

59

.9

64

.9

70

.4

71

.7

72

.7

78

.8

86

.6

10

4.1

11

8.7

12

6.1

14 15.4 21.541.3 58.5

79109.3

126.3

158.7 144.2

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Major Ports Minor Ports

For updated information, please visit www.ibef.org

Coal cargo traffic (MMT)

Source: Ministry of Shipping; TechSci Research

Note: MMT – Million Metric Tonnes

Increasing coal imports are set to drive coal cargo traffic

upwards at both major and non-major ports

With private ports boosting their coal handling capacities,

non-major ports look set to handle majority of coal imports

in the future

Coal cargo traffic has grown at a CAGR of 15.5 per cent

over FY07–16 to reach 270.3 MMT.

Total coal handled by India’s 12 major ports jumped to

126.1 million tonnes in FY16 from 118.7 million tonnes in

FY15

Thermal coal imports through the ports leaped 13.3 per cent

to 98.7 million tonnes, while shipments of coking coal, used

in making steel, reached to 27.35 million tonnes

Coal cargo traffic by minor ports crossed the total traffic of

major ports by 2013. In FY16, the coal traffic by minor ports

reached 144.23 MMT

INCREASING COAL IMPORTS SET TO DRIVE RISING CARGO TRAFFIC … (2/2)

PORTS

CAGR: 15.5%

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3030JANUARY 2017 For updated information, please visit www.ibef.org

Focus on increasing

capacity• To create a port capacity of around 3,200 MT to handle the expected traffic of about 2,500

MT by 2020

Increasing investments• Proposed investments in major ports by 2020 are expected to total USD18.6 billion, while

those in non-major ports would be USD28.5 billion

PORTS

World-class

infrastructure

• To implement full mechanisation of cargo handling and movement at ports, thereby

bringing Indian ports on par with the best international ports in terms of performance and

capacity

Source: Ministry of Shipping, TechSci Research

Strategically building

ports

• To develop two major ports (one each on East and West coast) to promote trade as well

as two hub ports (one each on the West coast and the East coast) – Mumbai (JNPT),

Kochi, Chennai, and Visakhapatnam

Bringing ports under

regulator

• To establish a port regulator for all ports in order to set, monitor, and regulate service

levels, technical and performance standards

NATIONAL MARITIME AGENDA 2010–2020 … (1/2)

Landlord ports• Major ports have been working towards implementing ‘Landlord port‘ concept duly limiting

their role to maintenance of channels and basic infrastructure leaving the development ,

operation, management, of terminal and cargo handling facilities to the private sector

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3131JANUARY 2017 For updated information, please visit www.ibef.org

Source: Ministry of Shipping, TechSci Research

Note: EXIM - Export-Import,

MT – Million Tonne

National Maritime Agenda 2010–20 is aimed at all-round development of the Indian maritime sector

As per the National Maritime Agenda, the government is likely to create port capacity of 3200 MT for handling about 2500

MT of cargo, by 2020

Agenda involves investments in new projects at major ports of around USD18.6 billion, of which USD12.4 billion is expected

to come from private sector players and the remaining from budgetary allocation

The total traffic on the Indian ports is expected to grow from about 2229 in 2018 and reach to 3033 MT by the end of 2020

The government, through this policy, aims to increase the tonnage under the Indian flag and Indian control as well as the

share of Indian ships in EXIM trade

The government is also working to float a specialised Maritime Finance Corporation with the equity of ports and financial

institutions to fund the Port projects

PORTS

NATIONAL MARITIME AGENDA 2010–2020 … (2/2)

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3232JANUARY 2017 For updated information, please visit www.ibef.org

12TH FIVE-YEAR PLAN

Planned capacity 12th Five-Year Plan (MMT)

The 12th Five-Year Plan (2012–17) is focused on the development of major and non-major ports through public and private

investments

The proposed outlay for port sector in the plan, excluding private investment, is USD4.9 billion

The overall projected traffic of 1,758.3 million tonnes to be achieved by FY17, the total capacity of the port sector is

envisaged to be 2,289.04 million tonnes by the end of 2017

The government anticipates private sector investment of around USD28.8 billion during the 12th Plan Period.

Projected traffic12th Five-Year Plan (MMT)

PORTS

689.9

544.7

1,229.2

1,059.8

Major Ports Non- Major Ports

FY12 FY17E

560.1

370.0

943.1

815.2

Major Ports Non- Major Ports

FY12 FY17E

Source: E:Estimated

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3333JANUARY 2017 For updated information, please visit www.ibef.org

De-licensing and tax

holidays

• The government has allowed FDI of up to 100 per cent under the automatic route for

projects related to the construction and maintenance of ports and harbours

• A 10-year tax holiday to enterprises engaged in the business of developing, maintaining,

and operating ports, inland waterways, and inland ports

Source: Ministry of Shipping; TechSci Research;

Note: FDI – Foreign Direct Investment

FAVOURABLE POLICIES ASSISTING THE PRIVATE SECTOR

PORTS

Price flexibility• Private ports enjoy price flexibility, as the government allows non-major ports to determine

their own tariffs in consultation with the State Maritime Boards; at major ports, tariffs are

regulated by the Tariff Authority for Major Ports (TAMP)

Model Concession

Agreement (MCA)

• An MCA has been finalised to bring transparency and uniformity to contractual

agreements that major ports would enter into with selected bidders for projects under the

Build, Operate and Transfer (BOT) model

• As on September 2016, the Ministry of Shipping proposed a new model concession

agreement (MCA) to attract more private sector investments in the development of port

infrastructure across the country.

Major Port Authorities

Act, 2016

• Primary focus of the scheme is to allow future public-private partnership operators to fix

tariffs. With the implementation of this policy, port authorities will get the power to lease

land for port-related use for up to 40 years and for non-port related use up to 20 years

Favourable system

• The system for security clearance for ports being streamline and made faster

• Expansion of existing framework to attract participation from the private sector for

development of infrastructure facilities such as dredging, road infrastructure, creation of

SEZ and development of integrated parking zones in the port area

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3434JANUARY 2017 For updated information, please visit www.ibef.org

STRONG PRIVATE SECTOR PARTICIPATION IN PORTS PROJECTS … (1/3)

39 Public Private Partnership (PPP) projects are operational at a cost of around USD2219.4 Million and capacity of 240.72

Million Tonnes Per Annum (MTPA).

32 PPP projects at an estimated cost of around USD3917.6 Million and capacity 264.77 Million Tonnes Per Annum (MTPA)

awarded and are under implementation.

Total 91 projects with involving capacity of 521.45 MMPA have been awarded during 2012-16 (Upto 30th June, 2015)

15 PPP projects with an estimated cost of about USD1210.6 Million and capacity 69.47 Million Tonnes Per Annum (MTPA)

have been awarded/approved and 13 projects at an estimated cost of about USD1466.2 Million and Capacity 108.35 Million

Tonnes Per Annum (MTPA) are likely to be awarded/approved by 31.03.2015.

As of September 2016, the National Green Tribunal has given nod for construction of multi-crore ‘Vizhinjam International

Seaport Ltd (VISL)’. The port is being developed by Adani Group in collaboration with Kerala Government.

2 mega port projects in Colachel in Tamil Nadu and Dahanu in Maharashtra with an initial investment of USD2.3 billion has

been introduced and are being awaited for approval under PPP model in FY16.

As of October 2016, Central Government is planning to setup logistic hubs near seaports with the help of private sector

players, to augment exports from the country.

PORTS

Source: Ministry of Shipping; TechSci Research; Notes: PPP –PublicPrivate Partnership

Private investment

Greenfield projects

Private terminals

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3535JANUARY 2017 For updated information, please visit www.ibef.org

Source: Indian Ports Association, TechSci Research

Notes: NSICT – Nhava Sheva International Container Terminal, Mumbai,

ICTT – International Container Transshipment Terminal, SPM – Single Point Mooring

PORTS

Terminals in major ports

with private sector

involvement

Port agency Estimated cost

(USD million)

Container terminal, Ennore Ennore 293.1

LNG terminal, Cochin Cochin Port Trust 729.1

Container terminal, NSICT JNPT 156.3

Oil jetty related facilities

(Vadinar)Kandla Port Trust 156.3

Third container terminal

(Mumbai)JNPT 187.5

Crude oil handling facility

(Cochin)Cochin Port Trust 146.5

ICTT at Vallarpadam

(Cochin)Cochin Port Trust 262.9

Construction of SPM captive

berth (Paradip)Paradip Port Trust 104.2

Development of second

container terminal (Chennai)Chennai Port Trust 103.1

Key private sector

companies

Ports they

developed

Maersk JNPT (Mumbai)

P&O Ports JNPT,

(Mumbai and Chennai)

Dubai Ports International (Cochin and

Vishakhapatnam)

PSA Singapore Tuticorin

Adani Mundra

Maersk Pipavav

Navyuga Engineering

Company LtdKrishnapatnam

DVS Raju group Gangavaram

JSW Jaigarh

Marg Karaikal

STRONG PRIVATE SECTOR PARTICIPATION IN PORTS PROJECTS … (2/3)

As on 2015

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3636JANUARY 2017 For updated information, please visit www.ibef.org

Source: Indian Ports Association, TechSci Research

Notes: NSICT – Nhava Sheva International Container Terminal, Mumbai,

ICTT – International Container Transshipment Terminal, SPM – Single Point Mooring

PORTS

Terminals in major ports with private sector

involvement (FY15)

Port agency Capacity

(Million tonnes)

Estimated cost

(USD million)

Development & Operation of

International Container Transshipment Terminal (ICTT)

at Vallar-padam

Cochin Port12.5 to 40 MMT in

Phases353

Setting up of LNG Port & ReGasification Terminal at

Puthuvypeen by Cochin. / Cochin Port TrustCochin Port 5 MMPTA 691.1

Multi-User Liquid Terminal (MULT) at

Puthuvypeen SEZ (International

Bunkering Terminal at Cochin)

Cochin Port 4.10 MMTPA 38.4

Conversion of berth No. 8 as container

terminal onTuticorin 7.2 MTPA 52.03

Development of North Cargo Berth – II

on DBFOT basis.Tuticorin 7.0 MTPA 55.36

Enhancement of Cargo Handling

capacity by installing rapid in motion

wagon loading facility by SWPL

Mormugao Port Trust 2.50 MTPA 7.5

Development of Container

Terminal on DBFOT basis

Kamarajar Port

Ltd16.8MT 210.68

Development of Multi Cargo

Terminal on DBFOT basis

Kamarajar Port

Ltd2.00 25.05

STRONG PRIVATE SECTOR PARTICIPATION IN PORTS PROJECTS … (3/3)

As on FY15

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3737JANUARY 2017 For updated information, please visit www.ibef.org

PORTS

Projects Completed and Awarded During FY15 & FY16

A PPP project worth USD220 million for redevelopment of berths 8, 9 and barge berths at the Port of Mormugao, Goa has been

awarded in September 2016

Kamarajar Port Marine Liquid Terminal-II PPP project and Chidambaranar Port PPP Project (shallow draught berth) for handling

general cargo, was introduced in 2016

Increase in capacity due to productivity of CBI & CBII (1.00 MTPA) Metric tonnes per annum

Development of WQ6 berth for 225m length and 22.5m width for handling dry bulk cargo on DBOFT basis (6.00) at VPT

(Visakhapatnam Port Trust).

Development of EQ-10 berth in inner harbour for handling liquid cargoes and chemicals on DBOFT basis (1.84 MTPA) at VPT.

Increase in capacity at CICTPL coal berth due to productivity (1.00 MTPA) at KPL (Kamarajar Port Limited)

Increase in capacity at ETTPL berth due to productivity (1.00 MTPA) at KPL.

Increase in capacity at General Cargo berth (2.00 MTPA) at KPL.

Installation of floating cranes for handling the cargo vessels (2.49 MTPA) at VoCPT (V.O.Chidambaranar Port Trust)

Construction of Mooring Dolphins at Liquid Cargo Jetty (1.00 MTPA) at JNPT (Jawaharlal Nehru Port Trust))

Increase in capacity due to deepening and widening of channel (10.20 MTPA) at JNPT.

Source: Indian Ports Association, TechSci Research

PPP: Public Private Partnership; MTPS: Million Tonnes per Annum; JNPT: Jawaharlal

Nehru Port Trust

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3838JANUARY 2017 For updated information, please visit www.ibef.org

PRIVATE EQUITY INTEREST IN INDIAN PORTS/SHIPPING REMAINS HEALTHY

PORTS

Target Acquirer Value (USD million) Year

LCL Logistix CMA CGM Group - 2015

Kattupalli port Adani Ports and Special Economic Zone Ltd - 2015

The Dhamra Port Co Ltd Adani Ports and Special Economic Zone 926.0 2014

Samson Maritime Ltd Kotak Private Equity Group 126.0 2014

Fourcee Infrastructure General Atlantic LLC 104.0 2012

Mundra Port 3I Group, GIC Real Estate 100.0 NA

Karaikal Port Pvt Ltd (Second round) Ascent Capital 41.7 NA

Ocean Sparkle Ltd Standard Chartered PE 41.6 2012

Karaikal Port Pvt Ltd (First round) IDFC Project Equity 32.6 NA

Gujarat Pipavav Port Ltd IDFC 28.5 NA

Karaikal Port Pvt Ltd Standard Chartered PE (Mauritius) II Ltd 27.1 2012

20Cube Logistics Zephyr Peacock India 17.0 2013

Continental Warehousing Nhava

Sheva

Aureos India Fund,

Eplanet Venture16.4 NA

PE deals since 2014

Source: E&Y, Grant Thornton, Thompson ONE Banker, TechSci Research

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OPPORTUNITIES

PORTS

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4040JANUARY 2017 For updated information, please visit www.ibef.org

OPPORTUNITIES

PORTS

Increasing scope for private ports Ship repair facilities at ports Port support services

• With rising demand for port

infrastructure due to growing imports

(crude, coal) and containerisation,

public ports (major ports) will fall short of

meeting demand

• This provides private ports with an

opportunity to serve the spill-off demand

from major ports and increase their

capacities in line with forecasted new

demand.

• Cochin Port Trust (CPT) announced

measures to increase its revenue by

generating higher container traffic and

increasing the number of passenger

liners. CPT is also planning to setup a

small industrial port at the southern end

of Willingdon Island to boost business.

• Dry docks are necessary to provide ship

repair facilities. Out of all major ports,

Kolkata has five dry docks, Mumbai and

Visakhapatnam have two; the rest have

one or no dock at all

• Given the positive outlook for cargo

traffic, and the resulting increase in

number of vessels visiting ports,

demand for ship repair services will go

up. This will provide opportunities to

build new dry docks and setup ancillary

repair facilities.

• Operation and maintenance services

such as pilotage, dredging, harbouring

and provision of marine assets such as

barges and dredgers are expected to

increase in coming years

• Increasing investments and cargo traffic

point to a healthy outlook for port

support services

• These include Operation and

Maintenance (O&M) services like

pilotage, harbouring and provision of

marine assets like barges and dredgers.

• In the upcoming Union Budget,

Government of Karnataka seeks

USD1335.32 million for maritime skill

development useful for Sagarmala

project.

Source: Ministry of Shipping, TechSci Research

Note: O&M – Operations & Maintenance

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SUCCESS STORIES

PORTS

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4242JANUARY 2017

202.9255.7

300.7

439.5

575.4658.6

801.2

1020.6

1213.1

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

For updated information, please visit www.ibef.org

Net sales (USD million)

Source: Company sources, including Annual Reports and news

items; Assorted news articles; TechSci Research

Notes: POL – Petroleum, Oil and Lubricants,

MTPA – Million Tonnes Per Annum,

MMT – Million Metric Tonnes

Mundra Port and Special Economic Zone Ltd was renamed

as Adani Ports & Special Economic Zone Ltd

It is the largest private port in India in terms of volume

Net Sales (FY16): USD1213.1 million

Operating profit (FY16): USD710.5 million

Adani’s Mundra Port crosses 100 MMT mark of cargo

handling in FY16. The only commercial port in India to

achieve 100 MMT traffic. Further, cargo traffic of the

company touched 109.02 MMT in FY16

Container traffic contributed the most, followed by

coal and edible oil, chemicals and POL

Has the world’s largest fully mechanised coal terminal with

a capacity of 60 MTPA

Handles the second highest container traffic in India

During FY08–16, total revenue rose to USD1213.1 million,

implying a CAGR of 25 per cent

MUNDRA: THE LARGEST PRIVATE PORT IN INDIA … (1/2)

PORTS

Adani Group plans to convert the Dhamra Port, in Odisha,

into country's biggest seaport with industrial park, and set

up LNG and LPG terminals there by 2021.

Dhamra Port is expected to have 35 berths having 315

million tonnes capacity.

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4343JANUARY 2017 For updated information, please visit www.ibef.org

Jawaharlal Nehru Port Trust (JNPT) has the third highest cargo traffic and the highest container traffic in the country

It is a container-focused port and having container traffic of 37.64 MMT in FY16

Handled 63.8 million tonnes of cargo in FY15

Poised to handle 3 million TEUs of containers by the year FY16

Traffic handled at JNPT for FY16 was 42.6 MMT

Distribution of JNPT’s container traffic for FY16 across its various terminals was a s follows –

Jawaharlal Nehru Port Container Terminal (JNPCT): 1.43 million TEUs

Nhava Sheva International Container Terminal (NSICT): 1 MMT

APM Terminals: 16.1 MMT

PORTS

Notes: TEU – Twenty-Foot Equivalent Unit,

MMT – Million Metric Tonnes

JNPT: MAJOR PORT WITH THE LARGEST CONTAINER CAPACITY … (1/2)

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4444JANUARY 2017

88.5%

10.5%

1.1%

Container

POL

Others

For updated information, please visit www.ibef.org

Cargo profile of JNPT (FY16)

Source: JNPT’s website, Indian Ports Association,

Ministry of Shipping, TechSci Research

Notes: POL – Petroleum, Oil, and Lubricants,

MMT – Million Metric Tonnes,

TEU – Twenty-Foot Equivalent Unit,

MTPA – Million Tonnes Per Annum

JNPT was developed to relieve the pressure of Mumbai port

and was commissioned in 1989

It serves most of North India and has good hinterland

connectivity through road and rail networks

JNPT, with a capacity of 4.76 million TEU, handles over 58

per cent of India’s container traffic, as of FY16

JNPT is a pioneer in involving private sector participation in

major ports and operates under a landlord model; NSCIT is

the first private terminal in the country

The port is poised to handle 5.03 million TEUs of containers

by 2016–17

Proposed capacity additions by FY17 –

Marine chemical: 30 MTPA

Container terminal: 58 MTPA

PORTS

JNPT: MAJOR PORT WITH THE LARGEST CONTAINER CAPACITY … (2/2)

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4545JANUARY 2017

5365 72 80 82 83 94 87 92 100

131151 153

206231

259288

310336 340

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Major Ports Minor Ports

For updated information, please visit www.ibef.org

Cargo handled at major and non-major port of

Gujarat (MMT)

Source: Shipping Ministry, TechSci Research

Gujarat is endowed with 1,215 kilo meters of coastline i.e.

1/6th of total Indian coastline

The state has 42 ports of which 41 are non major, while

Kandla is the sole major port

During FY07–16, cargo traffic in Gujarat increased at a

CAGR of 10.17 per cent, with the cargo volume handled

reaching 440 MMT in FY16.

Favourable policies of the Gujarat government helped the

state in gaining private investors interest in port related

activities

GUJARAT: PORT HUB OF INDIA ... (1/2)

PORTS

CAGR: 10.17%

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4646JANUARY 2017 For updated information, please visit www.ibef.org

During FY15, Gujarat added 35 million tonnes of capacity at non-major ports, augmenting the capacity of non-major ports to

422 million tonnes

In FY16, Gujarat Maritime Board (GMB) handled 339.77 MMT of cargo, with a capacity addition of 466 MMT in the same year.

During the 12th Five-Year Plan, the government estimates investment of about USD9.4 billion in the port sector by private

players in Gujarat

With seven ports under construction and five proposed ports, Gujarat has the highest number of privately operated greenfield

ports in India

As of October 2016, Ministry of shipping has sanctioned Capital Dredging Project for Ro Pax Ferry Services between Gogha &

Dahej, in Gulf of Cambay in Gujarat. The total project cost is US$ 35.75 million, of which 50 per cent will be funded by Centre

Government under the Sagarmala programme

As of November 2016, Ministry of Shipping sanctioned sum of USD 1.49 million to Gujarat Maritime Board for capacity building

and safety training of workers involved in ship recycling activities under Sagarmala

PORTS

Source: Shipping Ministry,

TechSci Research

GUJARAT: PORT HUB OF INDIA ... (2/2)

Greenfield ports Developer

Port of Pipavav GMB and Gujarat Pipavav Port Ltd

Mundra Port Gujarat Adani Port Ltd

Dahej Port Petronet LNG Ltd and GMB

Hazira Port Shell Gas B.V.

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USEFUL INFORMATION

PORTS

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4848JANUARY 2017

INDUSTRY ASSOCIATIONS

For updated information, please visit www.ibef.org

PORTS

Indian Ports Association (IPA)

1st floor, South Tower, NBCC Place

Bhishma Pitamah Marg, Lodi Road

New Delhi – 110 003

Phone: 91-11-24369061, 24369063, 24368334

Fax: 91-11-24365866

E-mail: [email protected], [email protected]

Indian Private Ports & Terminals Association

Darabshaw House, Level-1, N.M. Marg,

Ballard Estate, Mumbai 400 001, India

Tel. No: 022-22610599

Fax. No: 022-22621405

Email: [email protected]

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4949JANUARY 2017 For updated information, please visit www.ibef.org

Major and non-major ports do not have a strict association with traffic volumes. The classification has more of an

administrative significance

Cargo traffic includes both loading (export) and unloading (imports) of goods

Containerisation is the increased use of container for transporting non-bulk goods. It leads to increased efficiency (both

time and money)

Turnaround time is the total time spent by a ship from entry into port till departure

Twenty Equivalent Units (TEU) is a standard measure of containers which are 20 feet in length and 8 feet in width; the

height can vary

Draft is the vertical distance between waterline and the bottom of the ship. It determines the depth of water a ship or boat

can safely navigate. Higher capacity ships will need higher draft, hence ports with higher natural draft will attract bigger

ships

Waterfront availability is the length of the water line on the coast where ships can rest and the goods are unloaded. Longer

waterfront lengths reduce waiting time and help raise capacity

Terminals are certain sections of the ports where different types of cargo are unloaded

Single Point Mooring (SPM) is a loading buoy anchored offshore that serves as a mooring point and interconnect for

tankers loading or offloading gas or fluid product

A dry dock is a narrow basin that can be flooded to allow a ship to be floated in, then drained to allow that ship to come to

rest on a dry platform. Dry docks are used for construction, maintenance and repair of ships

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NOTES

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5050JANUARY 2017

GLOSSARY … (1/2)

For updated information, please visit www.ibef.org

FY: Indian Financial Year (April to March) – So FY11 implies April 2010 to March 2011

USD: US Dollar

FDI: Foreign Direct Investment

IPA: Indian Ports Association

NMDP: National Maritime Development Programme

POL: Petroleum, Oil & Lubricants

SEZ: Special Economic Zone

CAGR: Compounded Annual Growth Rate

ICTT: International Container Transshipment Terminal

TEU: Twenty-Foot Equivalent Unit

MMTPA: Million Metric Tonnes Per Annum

MMT: Million Metric Tonnes

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GLOSSARY … (2/2)

For updated information, please visit www.ibef.org

GOI: Government of India

NSICT: Nhava Sheva International Container Terminal, Mumbai

O&M: Operation and Maintenance services

LNG: Liquefied Natural Gas

Wherever applicable, numbers have been rounded off to the nearest whole number

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5252JANUARY 2017

Year INR equivalent of one USD

2004–05 44.81

2005–06 44.14

2006–07 45.14

2007–08 40.27

2008–09 46.14

2009–10 47.42

2010–11 45.62

2011–12 46.88

2012–13 54.31

2013–14 60.28

2014-15 61.06

2015-16 65.46

2016-17 (E) 66.95

Year INR equivalent of one USD

2005 43.98

2006 45.18

2007 41.34

2008 43.62

2009 48.42

2010 45.72

2011 46.85

2012 53.46

2013 58.44

2014 61.03

2015 64.15

2016 (Expected) 67.22

Exchange rates (Fiscal Year)

For updated information, please visit www.ibef.org

EXCHANGE RATES

Exchange rates (Calendar Year)

PORTS

Source: Reserve bank of India,

Average for the year

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5353JANUARY 2017

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PORTS