GMB's minor ports clock higher traffic growth than major ports

The share of non-major ports under Gujarat Maritime Board (GMB) in the overall Indian port traffic has risen significantly in the last five years. This, GMB, an autonomous state board, has been able to achieve on the back of a 47% growth in its traffic in the past five years.

GMB, which administers and regulates the 41 state-owned non-major ports of Gujarat has managed to grow its traffic by 47% thereby raising its share in the overall Indian port traffic from 26% in FY11 to 32% in FY16.

As against this, during the same five-year period, traffic at major ports in India grew by just 6%.

From a 231 million tonne (mt) cargo in FY11, GMB ports handled 340 mt of cargo in FY16. During the same period, the overall traffic handled at Indian ports (major and non-major) grew by 21% from from 885 mt in FY11 to 1,073 mt in FY16.

Traffic at major ports, however, grew by only 6% during the period, from 570 mt in FY11 to 606 mt in FY16. In fact, the share of major ports in the overall traffic handled at all Indian ports actually shrunk from 64% in FY11 to 56% in FY16.

Senior officials in the government of Gujarat pointed out that GMB could achieve a steady growth as it had a first mover advantage. "GMB was established in 1982 and right after the port policy came in, GMB started off its operations in the mid-90's. That's precisely how they managed to garner a significant share of the cargo handles by the non-major ports. In fact, GMB's share in the traffic handled by all non-major ports in the country has consistently remained above 70% over the years," said an official.

GMB ports account for 73% of the traffic handled at all non-major ports in India. And this share has consistently remained high over the years, reasoned the official who added that one of the advantages GMB ports have is that around 50% of the cargo is captive. Adani ports accounts for more than 80% of the total private port cargo handled in FY16 and about 37% of the total traffic handled by GMB ports in FY16. With planned expansions in the existing ports and upcoming green field projects, this category of cargo traffic is expected to continue to grow at a steady pace.

Along with GMB, private players like Essar Ports which has three operational terminals in Gujarat at Hazira, Vadinar and Salaya too has seen growth in traffic due to both captive and external factors. So much so that, according to Rajiv Agarwal, CEO & MD, Essar Ports Limited, plans are afoot of capacity expansion at the Gujarat ports from 108 mmtpa to 200 mmtpa.

"In Gujarat alone Q1 FY17 has seen an increase of more than 20% when compared to Q1 FY16. Essar Ports expects an increase of more than 50% on YoY basis for FY17 as against FY16. The growth has been realized on the back of creating world class infrastructures and having long term tie up with customers and providing innovative solutions to cater to the needs of customers," said Agarwal.

Essar's Hazira facility, which is integrated with the 10 mmtpa steel plant that is under enhancing capacity utilization plan, not only handles raw material requirement for steel making & finished goods like plates, pipes, coils etc. but also can handle project and break bulk and liquid cargo. On the other hand, its Vadinar facility which specializes in handling POL is integrated with 20 mmtpa Essar Oil refinery and has plans to be expanded in line with oil refinery expansion.

As for GMB, Reliance alone accounts for more than 80% of the total captive jetty cargo handled in FY16 and about 36% of the total traffic handled by its ports in FY16. Most of the Reliance cargo is either crude oil for its refineries in Jamnagar or the refined crude products from the refineries.

Over the last few years, the Reliance refineries have been running at about 100% capacity utilisation and hence the captive jetty cargo from Reliance has not changed much. Other notable Captive Jetty users include Bharat Oman and Essar. With planned expansions Bharat Oman's Bina Refinery and Essar's jetty, the captive jetty cargo is positioned to increase marginally over the next few years.

However, going may now get tough for GMB's minor ports from here on. Last year, the growth rate has been a bit slow, at 1.1% which industry insiders say is because of the declining coal traffic. GMB ports handled a traffic of 339.8 mt in 2015-16 as compared to 336 mt in 2014-15. During the first five months of FY17, there has been a marginal drop; from 140 mt in the same period last financial year to 139.2 mt in FY17.

Kandla is the only major port in Gujarat, all the other non-major ports come under the purview of Gujarat Maritime Board. Five locations, Sikka, Mundra, Dahej, Magdalla and Pipavav, handled more than 85% of the total traffic registered at non-major ports in Gujarat in FY16.

If one looks at the commodity-wise traffic trends, in FY16, crude oil, POL, Coal and Containers accounted for more than 75% of the total sea-borne traffic registered at Indian ports and about 76% of the total traffic handled at GMB ports.