‘India Has Huge Potential & Numbers are Showing There is a Lot of Progress’
India has a 7,500 KM coastline. It is the right thing to focus on. We will be able to play an important role in this project
Keld Pedersen, managing director of Gujarat Pipavav Port, has been associated with parent AP Moller-Maersk Group since 1987. He was one of the core team members who helped set up APM Terminals in The Hague, Netherlands. In an interview to Anirban Chowdhury and Satish John, Pedersen speaks about what is next for the company as it nears the end of its current phase of expansion. Edited excerpts:
Do you think the government is making the right kind of moves now in the shipping segment? Where do Gujarat Pipavav and APM Terminals stand? I think a lot of good things are happening which we appreciate a lot. But I think India has huge potential and the numbers are showing there is a lot of progress. India has a 7,500-kilometre coastline and it is the right thing to focus on. We, as a port operator, will be able to play an important role in this project. For example, with the relaxation of cabotage in the roll-on roll-off segment, we have had the opportunity to receive the first vessel with domestic cars coming out of Chennai to the port and then going to the North. I think APM Terminals as a global player will look at any opportunities in India.
Where are you with your plans to expand your annual terminal capacity to 1.3 million TEUs? What about the next phase? We are about finished with the phase of expansion as we had said we would complete it by the first quarter of calendar 2016. Our concession is till 2028. When you start to talk about capex allocation, the markets are volatile; we are just about finishing an existing project which gives us more capacity. Our focus right now is filling that capacity. When we reach a certain utilisation, we will start another expansion. Can you double the current capacity? Yes, we can. We currently have a capacity of 850,000 TEUs on the container segment (which we are expanding to 1.35 million TEUs), 4-5 million metric tonnes on bulk (coal, fertilisers and minerals). We expect in the present set up to run up to 250,000 cars (on the roll-on roll-off segment). Liquid is also still new. Depending on turnover of the storage, there will be a capacity of around 2 million metric tons of liquid. We need more capacity on our containers and we are adding half a million TEUs. For the calendar year, we did 700,000-800,000 TEUs.
What is your opinion on your aggressive rivals, the Adanis? In Gujarat itself, if you you would be just about 10%-15% of Mundra’s capacity. Would you not look at other port projects? The way we look at it is that you have the AP Moller-Maersk Group; you have the port operating arm being APM Terminals with more than 70 ports worldwide. Any investments that are not directly related to Pipavav would be from the mother company or the global company. We are very focussed on the northern capital region. That has been successful so far in terms of growing the business. We have built it up to four segments now and can expand in any segment. We have ample opportunities to get into an aggressive growth strategy. We respect our competitors. We, of course, follow it closely and see what happens around us but ultimately it comes back to our capability to successfully grow the port we are responsible for.
The bulk cargo segment across the world is under pressure. Isn't that going to lead to a shift in your focus? We are very focussed on growing all businesses but it's no secret that the bulk segment is in a challenging environment right now, coal in particular. We will keep it for now. We will continue to focus on what we can get. But it is clear that over time, if there is nothing left, we have to deviate from our strategy and do something new.
There were some concerns among your shareholders last year, which reflected on your stock... In August-September last year, we had one service that moved to Mundra. And we had a request for a berthing window for that service. We couldn't provide it because it was occupied. But it is in the natural course of business that we see a shipping line move from A to B, to C, or to D in terms of ports. We have had a new service that started here in mid-March and we also had a coastal service that started up in December.