Navayuga Group to Induct Strategic Partner in Krishnapatnam Terminal

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Posted September 12, 2017

Hyderabad-based Navayuga Group will induct a strategic partner, potentially a container shipping line, into the terminal it runs at Krishnapatnam port in Andhra Pradesh’s Nellore district, seeking “synergies” to boost volumes which is expected to reach half a million twenty-foot equivalent units (TEUs) by March 2018, Managing Director Chinta Sasidhar has said.

Sasidhar told BusinessLine in an interview that the board of Krishnapatnam Port Co Ltd — 92 per cent owned by the Navayuga Group — has agreed to bring in a “strategic partner” in the container terminal.

“We are open for a container shipping line to come in as a strategic partner, but with synergies. We are looking at partners who can bring in value, not just funds,” Sasidhar said adding that the plan was aimed at “consistency in cargo”.

The move is typical of the industry where container terminals are run by specialists themselves or in partnership with lines. Top global terminal operators such as PSA International Pte Ltd, DP World Ltd and APM Terminals Management BV, run terminals in India. Terminal Investment Ltd SA, majority owned by Geneva-based box line Mediterranean Shipping Company SA as well as French line CMA-CGM SA, separately run facilities in partnership with Adani Ports and Special Economic Zone Ltd in Mundra port.

Krishnapatnam port’s container terminal, which started operations in 2012, with a capacity to load 1.2 million TEUs handled 255,436 TEUs in the year ended March 2017, clocking a growth of 115 per cent over the previous year.

The terminal handled some 200,000 TEUs during the fiscal year that began in April and is expected to cross 500,000 TEUs by March. “At that level, we would be reaching a capacity utilisation of 45 per cent.

During discussions, if somebody asks for 49 per cent or 51 per cent stake, they can also say that they will help reach the 1.2 million TEU capacity within two years. That attracts me,” Sasidhar, son of Chinta Visweswara Rao, the founder of the group, said.

“It’s the synergy that we are looking at, not just the money coming in and capacity not filling up,” he said. “Even the partner who comes in knows it’s a ready cake and he has to add on from there. The discussions, to start soon, would focus on what to add on and how to work it out,” Sasidhar added. Krishnapatnam port, one of India’s deepest with a draft of 18 metres, has environment approval to expand its container loading facilities by another 1.8 million TEUs.

Expansion

The Port plans to expand its container loading capacity by a further 3 million TEUs for which it has applied for environment clearance.

The terminal is equipped with five super post Panama quay cranes, four rubber-tyred gantry cranes (with six more on order) and ten-reach stackers.

The twin-lift, 70-ton ship to shore cranes can do 50 moves per hour, capable of servicing the biggest of the container ships.

The port is in the process of installing scanners that can scan containers while the truck is moving.

The port in which UK-based private equity firm 3i Group Plc has an 8 per cent stake, ended FY17 — its eight year of operations — with total volumes of 36 million tonnes (mt), revenue of ?1,740 crore and EBITDA of 55 per cent.

Krishnapatnam, Sasidhar said, has “taken advantage” of the freedom it has, being a private port, to set rates based on market forces unlike the Central government-owned ports that are governed by a rate regulator.

“Besides, the flexibility we have not being a part of the Major Port Trusts Act that governs the Central government ports helps Krishnapatnam takes quick decisions, be it on automation, digitalisation and dredging. There are no limitations,” he added.

Source: The Hindu