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With One-billion-ton cargo handling target, Adani Ports goes shopping for global assets

Posted on May 15, 2024

Adani Ports and Special Economic Zone Ltd (APSEZ) owned by billionaire Gautam Adani, plans to handle One billion ton of cargo over the next 5-6 years, a target that will push India’s biggest private port operator to pursue global expansion aggressively.

“On long-term volume guidance, the next milestone for us is a billion ton. The company is working on that,” D Muthukumaran, Chief Financial Officer, APSEZ, told analysts during the fourth quarter earnings call on 2 May.

APSEZ has a network of 15 ports/terminals across India’s coastline with a capacity to handle some 627 million tonnes (mt) of cargo a year.

In FY24, APSEZ handled 420 mt of cargo, accounting for 27 percent of India’s total cargo and 44 percent of the nation’s container cargo.

The Company’s domestic cargo volumes grew by 21 percent in FY24, compared to the overall India cargo growth of around 7 percent.

The port operator has set a cargo handling target of 460-480 mt for the current fiscal.

APSEZ’s overseas presence is limited to Haifa port, Israel’s largest, operation and maintenance contracts in Australia and Tanzania and a new container terminal it is constructing at Colombo port in Sri Lanka.

APSEZ has “always delivered twice or thrice the India growth”, said Ashwani Gupta, whole time director and Chief Executive Officer.

“With the operational excellence we have, with the customer base we have, with the confidence of our stakeholders whether the shipping lines or whomsoever and our strategic positioning of ports on the India coastal line, definitely anything between twice and thrice is very credible, looking at what we have delivered and are delivering. This means if India cargo is growing between 6-6.5 percent, for us to grow between 12-14 percent will not be a surprise because we are strategically positioned to cover that trade,” Gupta told analysts on 2 May.

A 12-15 percent volume growth is, thus, not a surprise if India is growing between 6-6.5 percent, Gupta, who took over as CEO in January this year, said.

“That is where we see growth in India in the coming 3 to 5 years,” he noted.

APSEZ, according to the CEO, is “always open for any kind of opportunity, especially internationally, to bring further growth in our portfolio”.

“Our next or our continued efforts are to go international, but to go international is not the objective, but to go international profitably which can sustain the cargo traffic is the objective. And that’s why the strategic positioning of Haifa port in Israel, the strategic positioning of West Container Terminal in Sri Lanka are examples that we are choosing our bet for the international expansion purely driven by the business opportunity,” Gupta stated.

“Next, what we are studying is the same cargo traffic whether it is the Middle East, whether it is Southeast Asia, whether it is Africa or it could be Mediterranean. And that’s where we will move forward so that we go for strategic acquisitions/partnerships for these four regions. That’s our 3 to 5 years strategic roadmap to grow sustainably every year,” Gupta added.



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