Indian Port Sector
By Hans Ole Madsen – CEO, South Asia for A.P. Moller-Maersk
Port Pipavav
1
About A.P. Moller-Maersk
> Established in Svendborg, Denmark in 1904
> More than 110,000 employees in over 125 countries
> Global group turnover of USD 40 Billion
2
Main Business Activities
Container Shipping related activities
> Maersk Line and Safmarine are market
leaders in global container services
> Network of more than 550 container vessels
and 1.4 million TEU
> APM Terminals operates more than 45
terminals
> Multimodal Supply Chain Management
services through Maersk Logistics
3
Main Business Activities
Other Shipping related activities
> Transport of crude oil, refined products
and gas by Maersk Tankers
> Maersk Supply provides supply vessels
for anchor-handling, cable laying etc
> Maersk Contractors is involved in
mobile production units and drilling
rigs
> Over 260 vessels and rigs operated
4
Main Business Activities
Energy
> Production and exploration of oil
and gas
> Production Activities in Denmark,
United Kingdom, Qatar, Algeria and
Kazakhstan
> Exploration activities in the North
Sea (Denmark, United Kingdom,
Norway and Germany), Algeria,
Morocco, Angola, Oman, Brazil,
Surinam, Colombia and
Turkmenistan
5
Main Business Activities
Retail and other industry
> Supermarkets and hypermarkets in
Europe and UK
> Brands include the Føtex stores, the
Netto stores and the Bilka hypermarkets
> Shipyards in Denmark, Germany and the
Baltic countries
> Industrial production of plastic products
> Star Air engaged in contract parcel flying
in Europe
> 50% ownership of Martinair Holland
engaged in air freights and charter
service for passenger
6
Our Presence in India
> Maersk Line operating in India since 1952
> The leading container shipping line in India
> Nationwide presence through 33 offices
> Employs over 5,500 people in India
> Established the 1st Private CFS in Nhava Sheva in
1994
> Pioneered the back-office (BPO) concept in the
maritime industry
> Established the 1st Maritime Training Academy by a
foreign shipping line in India
> Among the 1st participants in the privatisation of rail
freight in India
7
APM Terminals in India
> The 3rd Container Terminal at Nhava > Located in Gujarat on the west coast of
Sheva harbour within JNPT India to handle containers, bulk and
liquid cargo
> Converted existing bulk terminal on
BOT for 30 years > Container volumes handled to exceed
250,000 in 2006
> Joint Venture with CONCOR
> Projected Container terminal capacity
> Handling capacity to be 1.4 mio TEU of 1.3 mio TEU
> Total quay length 712 metres > Bulk cargo in 2006 apx 2.5 mio tons
> Draft limited to channel draft of 12.5 > Total quay length of 725 metres
metres
8
Current Scenario
> Growth projections indicate continued demand for capacity
> Encouraging response from both local & international companies for Port
development projects in India
> Major international container port operators have a presence in India and are eyeing
new projects
Demand Projection
14000
T e u s i n '0 0 0
12000
10000
8000
6000
4000
2000
0
2006 2007 2008 2009 2010 2011 2012
Year
9
Regulatory Environment
> Model Concession Agreement
> Major v/s Minor Ports
> Tariff Regulation
> Major Port Trusts Act
10
Financing
> Need for long term financing/debt options
> Current interest rates high thus increasing the overall cost and risk
> Viability gap funding scope to be broadened
11
Public Private Partnership in Ports
> Private investment attracted towards port projects with reasonable returns
and payback period
> Support infrastructure to be developed by the Government to ensure success
of the PPP model
> Government to undertake infrastructural development where payback is
commercially unviable but essential for overall development such as capital
channel dredging, breakwater, rail/road linkages etc
> PPP to be used as a tool to speed up infrastructure development and not as a
replacement of Government spending
12
Productivity and Efficiency
> Berth productivity has improved at some Indian ports from 20 moves per
hour in the 90’s to 70-80 moves per hour
> The benchmark is now higher
> Emma Maersk, the worlds largest container vessel, had berth productivity of
540 moves per hour at Yantian
13
