Gujarat Pipavav RoRo segment takes a hit on fall in automobile volumes

With auto demand taking a hit across categories during ongoing pandemic, APM Terminals-promoted Gujarat Pipavav has had to face the heat as automobile volumes at its Roll-on Roll-off (RoRo) segment have almost halved in the last few months.

“Currently, the drop in volumes in our RoRo business is about 50 per cent. Since the yard is now vacant, we could look to use the space for storage of containers,” Jakob Friis Sorensen, managing director at APM Terminals Pipavav told Business Standard.

The Netherland-based APM is one of the biggest container and port terminal operator in the world. Its Pipavav port has chalked out a capital expenditure worth Rs 700 crore subject to approval of concession extension of at least 20 years beyond the year 2028. The Gujarat Maritime Board is expected to announce its decision on the concession period of Mumbai-listed Gujarat Pipavav Port by end of October.

The RoRo yard facility at APM Terminals Pipavav can handle 250,000 vehicles annually. The RORO yard is run in partnership with NYK Auto Logistics (India) which offers logistics support to the auto manufacturers looking to export their vehicles out of India or for coastal movement.

In quarter ended June, the volume for RoRo stood at 2,000 units, down 8 percent from previous quarter primarily due to lower demand in export market and impact of lockdown due to Covid-19.

Apart from Gujarat Pipavav, the Mumbai Port, Chennai Port and Ennore Port have RoRo facilities in the country.

The port is a gateway to the auto hubs in Gujarat and Delhi-NCR, which is run in partnership with NYK Auto Logistics (India).

The port majorly handles container cargo, which forms nearly 70 percent of its total business along with bulk and liquid. The company’s RoRo business is relatively small.

“Due to the pandemic, our container business has also declined nearly 15 percent year-to-date. However, we are expecting a steady recovery into 2021 and are already beginning to see volumes go up,” informed Sorensen.

The exports are witnessing a pickup in the last few months compared to the imports, which is helping volume gain, he added.

“Due to Covid-19, there was skeletal staffing which has led to some delay but the proposal is under scrutiny and within a month we will be informing the port about our decision on concession extension,” senior official with Gujarat Maritime Board said.

The port aims to gain from the implementation of western dedicated freight corridor where the company plans to increasingly bring its cargo from road to rail in a bid to lower cost and also improve carbon foot print.

“Currently, 60 per cent of our cargo is via trains and balance via road. We look to rely more on trains going ahead which will lower our transit time and in turn increase volumes,” explained Sorensen.

The container yard capacity would be expanded once the cargo growth is visible post commissioning of DFC, he said.

Meanwhile, analysts are of the view that implementation of DFC would augur well for the port as it will improve proximity to Delhi which forms sizeable portion of cargo handled by the port.