‘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

The Economic Times - - Companies -

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.

FILE PHOTO

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