Looking beyond Railways

Written by Rajat Arora | Updated: Aug 1 2013, 01:57am hrs
Container Corporation of India (Concor), the only stock market-listed PSU of Indian Railways, is going full steam on infrastructure building. The container train operator is gradually decreasing its dependence on the Railways and getting into building logistics parks, cold chains, and air and port cargo complexes.

We plan to invest R6,000 crore in the 12th Plan to build private freight terminals, cold chains, port and cargo complexes. The container traffic is limited and we get more than 35 million tonne of the total 47 mt which is moved through container trains, said Anil K Gupta, chairman and managing director, Concor.

The company is also gradually increasing the share of other revenue streams in its business. We get 63% of our business from the Railways. The figure was 80% a couple of years ago. We are focusing more on warehouses, cargo handling and road transportation, from which our business has increased substantially in the past few years. We have already got two private freight terminals notified, Gupta said.

The main reason for the corporations diversification has been the stagnation of the container traffic. For 2012-13, the R4,400-crore-turnover company procured just 18 rakes against its target of 30. So, for the current fiscal, it has reduced the target to 20 rakes. Concor has a 75 % share of the container train market in India and owns 66% of the container trains present in the railways system.

The overall economic growth has slowed down, leading to a fall in our procurement of wagons. But in future, when growth picks up, well have the capacity to cater it, Gupta said.

Recently, Concor has also ventured into air cargo handling and launched a subsidiary Cocnor Air to cater to this segment. We have bagged a contract to handle air cargo at the Mumbai International Airport. Well be following this sector aggressively, he said.

Concor is focusing towards becoming a total logistics solutions company. According to a study commissioned by the company, in India there are about 15 players as logistics service providers, out of which only five-to-six have a turnover above R50 crore. Though there are over 1,500 transportation companies in India, only about 25 offer third-party logistics services. We want to be a provider of third-party logistics services. This could involve setting up Distriparks, freight centres and trade development centres. This could be achieved through joint ventures or on our own, and the services offered could be total logistics solutions to select customers or, if required, as a common user service, he said.

The company is also offering bonus shares to its shareholders, a proposal for which was finalised at its board meeting on July 25.