“West coast mostly, [as] the potential in India is vast,” said Yuvraj Narayan, DP World's cfo, when asked to identify terminal opportunities in India that were most appealing. “There is tremendous potential in India. The problem is that the regulatory environment just makes investment in infrastructure difficult.”
DP World operates five terminals in India, at Nhava Sheva (also known as Jawaharlal Nehru Port Terminal), India’s largest container facility, Cochin, Chennai and Visakhapatnam, all of which are classified as ‘major’ Indian ports, and Mundra, a “non-major” facility. It has one under development at Kulpi.
Nimish Mathur, lead equity analyst at Drewry Maritime Equity Research, said DP World’s India capacity stood at 5.2m teu in 2012 and was likely to be “nearly the same” now.
“DP World is one of the largest port operators in India and our ports have done well. The question is now for those where you want to build new ports and create new capacity, the general environment has become exceedingly difficult. So the good news is that we have the capacity in India and it’s a great market. That’s good news for us, because new capacity is just not coming up on time.”
Narayan said DP World would not be interested in acquiring sub-1m TEU facilities in India. “Unless it has substantial benefit to our main businesses, we wouldn’t be looking at those. But absolutely there are opportunities out there, but you have to negotiate your way through to come to terms which make it beneficial to make that investment.
“They’ve had two projects, one in Ennore and one JNPT4, which they bid out three-four years ago, which some other parties won. And finally never got built, and they had to rebid them recently.”
Drewry Maritime Advisors’ India specialist, Shailesh Garg, told TOC Container Supply Chain Middle East conference in December that India’s West Coast accounted for 65% of total market share in the country in FY2013, with the Upper West Coast alone, including the ports of Kandla, Mundra, Pipavav and Hazira, enjoying as much as 41%. He said India’s ports business grew briskly from 2002-12, at 11.4% CAGR, to handle a throughput of 9.9m teu in 2012.
Announcing its preliminary FY2013 financial report, DP World announced a flat performance, with revenues falling 1.5% to $3.07bn on the year earlier, and consolidated throughput, or throughput over which DP World has control under IFRS, down 3.8%.
On a “like-for-like at constant currency basis,” DP World said revenues increased 3.6% and net profit was up 26.6%.
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