Gujarat Pipavav Port's liquid berth to contribute 12-15% to total revenues by end-2015

Container business seen bullish, momentum lacking in bulk segment

After a strong performance in the first quarter of FY15 (January-March), Gujarat Pipavav Port, India’s first private sector port, plans to focus on developing its existing liquid berth to contribute between 12-15 per cent to the total revenues by end-2015.

“Liquid cargo is a high-paid business but at present its contribution is less than a per cent to the company’s total revenues,” managing director, Prakash Tulsiani told Business Standard today. “We want to take this up significantly to about 12-15 per cent and so going ahead, our focus is to increase business from this (liquid cargo) vertical,” he said.

Port Pipavav, located on the west coast caters to containers, bulk and liquid cargo.

On Tuesday, the APM Terminals-operated company reported a net profit of Rs 61 crore in the March quarter, up 73 per cent from same period last year led by higher net sales which rose 25 per cent year-on-year to Rs 156.2 crore.

Strong business momentum, volume growth and improved realisation helped company post strong earnings in March quarter, said brokerages.

Of the total revenues, Gujarat Pipavav’s container business contributes 65 per cent to total followed by bulk which chips in 25 per cent and the balance is from other facilities with liquid contributing only negligible.

“We plan to take the total liquid terminal capacity to 2 million tonne may be in next one to one-and-half year but initially we are planning capacity increase to 650,000 tonne,” Tulsiani said.

The company operates five berths at the moment and its liquid berth is the smallest of about 65 meters. Among the other berths, the first and second are dedicated for bulk cargo, third is flexible and can be used for both bulk as well as container cargo, while the fourth is for the container cargo alone.

To develop the liquid terminal capacity, Gujarat Pipavav will lease out its land to tank farm owners who will in turn construct the aboveground storage tank facilities.

Due to this, the port will not be directly investing any funds in to the development of the terminal, Tulsiani clarified.

Regarding its bulk and container businesses, Tulisiani remains bullish on the latter saying the company’s EBITDA margins are seen healthy even going ahead because of increased volumes from container segment.

During the quarter, the company's EBITDA was up 68 per cent at Rs 79 crore and margins stood at 55 per cent.

“We are bullish on the container business and therefore are increasing capacity in this segment by converting the flexible or the multi-purpose berth into pure container terminal,” said Tulsiani. “We are seeing the container industry grow 4-6 and see ourselves grow faster, so want to create capacity in the container business on the west coast where there is crunch.” Bulk business, on the other hand, does not see much momentum. “For this sector (bulk) the power sector needs to be strong so requirement for coal comes in and so coal berth and ports can be used. Also we have fertilisers in bulk but that is monsoon dependent,” said Tulsiani.

APM Terminals Pipavav is one of western India's fastest growing gateway ports with excellent connectivity to the rich hinterlands in the north and north west regions of the country.