Gujarat Pipavav Port Ltd (GPPL), operated by APM Terminals, is banking on the growth in trade and operational infrastructure to cash in on the rise in cargo volumes. APM Terminals, a part of AP Moller-Maersk Group, owns 57.9% stake in GPPL. In an interaction with FE?s Nikita Upadhyay, GPPL MD Prakash Tulsiani speaks about the opportunity in the container market, investments and the company’s forthcoming IPO. Excerpts:

What will help GPPL grow more than the industry benchmark?

Our strategic position is our advantage. Major industrialisation and trade movement is now taking place in the northern belt of India. The region currently generates 66% of the total container in India propelling significant container volume growth at the ports located on the west coast. We believe that the general economic growth in these regions as well as the growth in demand for cargo services (in particular containerised cargo) provides a strong and growing market for our services. This is because in India only 52% of exports and imports are transported as containerised cargo as against 75-80% in other developed markets like the US and UK.

Non-major ports handle about 30% of India’s trade volume and of this 76% takes place in Gujarat which is one of our strengths. Today major shipping lines use Nava-Sheva Port but all its facilities are optimally utilised. Nava Sheva has problems of evacuation, land expansion and draft restriction. We are 10 hours streaming distance from Nava-Sheva, the closest port so once Nava-Sheva gets saturated, port traffic would be routed to our port. There is tremendous growth in India and we are ready to tap it. We have handled bulk vessels carrying about 81,600 mt of bulk cargo and container vessels of 6,200 TEUs capacity.

How much has GPPL spent on the operational infrastructure at port?

We have spent around Rs 1,200 crore for building up these facilities and till date we have spent about Rs 2,000 crore. These were under-construction since 2005 when APM Terminals had bought controlling stake and infused Rs 750 crore in GPPL. These facilities include four berths with a total length of 1,075 metre used for handling bulk and containerised cargo and an LPG berth with a service deck of 65 metre and a length between extreme mooring dolphins of 308 metre, which assists in berthing of large vessels. We have deployed a mobile-harbour crane and a rail-mounted crane for the efficient handling of dry bulk and break bulk cargo. We have also installed weighbridges to support the bulk cargo operations, including an in-motion weighbridge on rails. We have converted our harbour crane from fuel-based to electric, thus saving on cost and reducing pollution.

Are you looking for further expansion of port?

We have the right to develop approximately 1,561 acre of land at APM Terminals Pipavav. We have developed approximately 485 acre and plan to utilise the remaining undeveloped land for further expansion of our port operations, including for additional berth and cargo handling facilities both at the waterfront and in the back-up areas. The Port has extensive shore-based area to allow development of back-up infrastructure and allied industries. We believe that our available land will help us expand the market for our port services and provide sufficient resources for future expansion. This is an on-going activity and we will do it as and when we need arises.

When are you expected to come out with an IPO?

We have already filed draft red herring prospectus (DRHP) and are expecting to hear from Sebi anytime soon now. Of the Rs 500-crore that we are planning to raise, Rs 300 crore will be utilised for prepayment of loans, Rs 88.52 crore for investment in capital expenditure and Rs 31.08 crore towards investment in capital equipment among others.