Over the years Essar Ports has developed 168 MMTPA ports capacity in India through investment in excess of USD 1.5 Billion with technology and automation at core. Amit Bapna, CFO, Essar Ports for the first time shares details of the company’s expansion and fundraising plans in an exclusive interview with ET CFO.
Currently the Essar Ports operates a 20 MMTPA Port Terminal in Salaya (Gujarat), and there is a 50-50 Joint Venture partnership for building a 4 MTPA LNG terminal at Hazira, Gujarat between Essar and AMNS India, Amit Bapna, CFO of the company said in an exclusive interaction with ETCFO.
Bapna said the company has divested 148 MMTPA of Port Capacity across – Vadinar, Hazira, Paradip and Vizag.
Currently the company operates a 20 MMTPA Port Terminal in Salaya (Gujarat). There also is a 50-50 Joint Venture partnership for building a 4 MTPA LNG terminal at Hazira, Gujarat between Essar and AMNS India, the finance veteran mentioned.
The overseas port asset of Essar consists of the Stanlow Port terminal in the United Kingdom which is integrated with the one of the most advanced refineries in Europe, Essar Oil UK refinery in Stanlow, Manchester, Bapna highlighted.
Stanlow is a key strategic national asset, annually producing over 16 per cent of the UK’s road transport fuels, while playing an important part in Britain’s petrochemical industry by providing key feed stocks.
Here are the edited excerpts:
Q: What is the progress on diversifying cargo profile at Salaya port?
Amit Bapna: Salaya Port has been developed at a strategic location and boasts of an allweather deep draft dry bulk terminal in the area which provides environment friendly handling of cargo reducing carbon emissions against traditional means.
The port has a rich hinterland with a mix of refineries, power plants, cement plants, soda ash plants, manufacturing and trading hubs, fertilizer plants and bauxite mines. All of these provide an amazing opportunity for diversifying cargo and we have taken significant steps on that front. The port boosts the nation’s objective of reducing logistics cost and making our EXIM cargo competitive.
It will provide a sustainable edge for our customers for a long time. We plan to handle third party cargo to the extent of 50% of the total cargo handled at the port diversifying cargo profile at Salaya Port is expected to get boost with railway connectivity, green energy (LNG , green ammonia) investments in the region, and clean commodities handling as we transition towards net zero target.
Q: Is there any plan to expand the facility?
Amit Bapna: Post successful divestment programme and the business becoming debt free, the deleveraged assets are on the cusp of transformation journey where integrated logistics solutions, green energy and value added services are going to play a major role.
We are now in building new assets, with more efficient, carbon neutral and new-age technologies, which will be sustainable and aligned to our theme of Energy Transition.
Expansion at Salaya Port are planned and will be based on requirements of market & customers, railway connectivity expanding the hinterland, making the facility a green port with ability to cater to green energy (LNG and Green Ammonia) and handle clean commodities.
Q: What are your investment plans and area of investment in this fiscal?
Amit Bapna: Essar has been a pioneer in implementing automation, development of industry integrated solutions mapping end to end logistics and ensuring logistics efficiency.
Our investments will be on the theme of providing economies of scale through deeper drafts, faster turnaround through mechanized systems, system uptime; logistics efficiency and visibility through use of technology and digitization.
It will be focused on the Salaya Port enabling it to be the marine hub of Saurashtra region with multi modal connectivity ensuring sustainable advantage to our customers.
Q: What are the fundraising plans for this fiscal?
Amit Bapna: We have recently refinanced our debt by raising ECB of over USD 130 million. We will be looking at fundraising for expansion at Salaya Port for railway connectivity and capacity enhancement in the current fiscal.
Q: How can the implementation of port-led development initiatives contribute to the growth of cargo movement and facilitate India’s transformation into a major transit cargo hub?
Amit Bapna: Maritime Vision 2030 is a structured initiative which lays down a 10 year blueprint for overhauling the sector paving way for port-led development.
When complimented with initiatives like National Infrastructure Pipeline and PM Gati Shakti – National Masterplan for Multi-Modal Connectivity, it can be said that once executed with efficiency, the nation’s infrastructure will fast track the nation’s journey to the USD 5 trillion economy and more.
It will also ensure efficiency in logistics cost and bolster EXIM competitiveness of the nation. With strong domestic demand and a boost in manufacturing coupled with efficiency in logistics, India is well-positioned to become a significant global hub for manufacturing, trade and transit.
Q: What policy initiatives and measures are required from the government to foster further growth in the ports sector?
Amit Bapna: Incentivizing projects which promote/ support themes like energy transition, green hydrogen, LNG where sustainability is at core.
We will also focus on promoting industry integrated port projects with speedier approval process for multimodal connectivity.
Introducing PLI scheme for the Ports Sector encouraging capacity creation and employment generation, low cost financing of the port projects mechanisms to enable flexibility in long term concessions to ride out the evolving market dynamics and other risks impacting projects and operations will be our focus area.
We will also focus on enhanced utilization of existing ports and terminals through an enabling policy framework.