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Ports & Terminals Review 2019: Essar Ports, India

Published by , Editorial Assistant
Dry Bulk,

Essar Ports is one of India’s largest private sector port and terminal developers and operators. It has invested US$1.6 billion in developing world-class terminals in three Indian states.

Essar Ports' 16 tpy dry bulk terminal at Pradip Port Trust, Odisha, India.

Its current operations span four terminals with a combined capacity of 110 million tpy, which is roughly 5% of India’s port capacity. The company is a leader in the non-containerised bulk cargo space. Having clocked a throughput of 47 million t in FY19, Essar Ports is expecting to handle over 60 million t in the current financial year.

All Essar Ports terminals are equipped with advanced cargo handling infrastructure and are well poised to double capacity in the near to medium-term. The company is working in tandem with the Government of India to meet its ambitious target of developing 3130 million t of port capacity in the country by 2020.

Outside India, Essar’s port assets include a liquid terminal in the UK and a coal berth in the development stage at Mozambique’s Beira port.

Essar Ports' 20 tpy dry bulk terminal at Salaya, Gujarat, India.

The 50 million tpy Hazira port terminal in Gujarat is an all-weather, deep draft port terminal capable of handling dry bulk, liquid and breakbulk cargo, which is under expansion mode and caters to the industrial complex of steel and power plants and heavy industries.

The 16 million tpy Paradip dry bulk terminal is an all-weather, deep draft facility integrated steel pellet plant that handles dry bulk cargo. The 24 million tpy Vizag terminal caters to the iron ore traffic and handles both domestic and export shipments. The company’s recently commissioned dry bulk terminal at Salaya has increased its dry bulk cargo handling capacity by 20 million tpy on the west coast of India.

Essar Ports is a growth-oriented company. The company has registered a growth of 20% in cargo volumes in the first half of FY2019 - 2020, with a throughput of 27.3 million t. The company always scouts for opportunities to expand and grow its businesses further to the benefit of all its stakeholders, with environment sensitivity forming the cornerstone of the company’s guiding philosophy. All its terminals are rich assets with the latest infrastructure, and are scalable, offering capacity expansion possibilities.

Essar Ports' 24 tpy all-weather deep draft terminal at Vizakhapatnam Port Trust in Andhra Pradesh, India.

Essar’s target is to grow at a rate of more than 20% in the near future. To achieve this growth, the company is focussed on optimising costs, diversifying its customer and cargo base, and improving its financial performance.

The challenges plaguing the infrastructure/ports sector include the following:

  • Non-availability of low cost funds, which is the need for the Infrastructure sector.
  • High logistics cost (13% of GDP) in India impacting exports uncompetitiveness.
  • Commodity risks and risk on account of changing market dynamics.
  • Non-availability of hinterland connectivity through road and rail for ease of evacuation, thus affecting competitiveness.
  • Non-availability of base cargo and manufacturing industries, which make greenfield projects viable.
  • Non-equitable risk sharing in PPP projects between concessionaire and concessioning authority.

The Government of India has embarked on the ambitious target of India becoming a US$5 trillion economy. It has made some significant strides in job creation, infrastructure investment, encouragement of startups, support to MSME’s liquidity issues, bank recapitalisation and so on. All these steps are boosting growth, manufacturing, consumption and opportunity. The focus on enhancing logistics infrastructure through Bharatmala, Sagarmala and railways will pave the way for growth and port-led development in India.

Essar Ports' 50 tpy dry bulk terminal at Hazira, Gujarat, India.

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