We want a level playing field, with free & fair competition

Written by Nikita Upadhyay | Nikita Upadhyay | Updated: Aug 4 2012, 07:25am hrs
APM Terminals Management BV, a part of the AP Moller-Maersk Group, which has invested in Gujarat Pipavav Port and operates a terminal Gateway Terminals India at JNPT, is facing rough weather, thanks to ambiguous regulatory policies in India. The Netherlands-based company is also seeing a slowdown in cargo movements and feels it will take a few years for the trade volumes to bounce back. In an interview with Nikita Upadhyay, Henrik Pedersen, the companys CEO, Asia Pacific region, talks about the regulatory challenges, slowdown in growth and expansion plans.

Gateway Terminals India had to cut its tariffs by 44% going by the rules put forward by the Tariff Authority for Major Ports (TAMP). How does it impact you

We are awaiting the new TAMP regulations. The reduction in tariffs has impacted our ability to invest in the terminal. The new regulation will give us a clear roadmap on the rules of the game. India is the only place where non-major or minor ports are competing with heavily regulated major ports. We want a level playing field, with free and fair competition.

How is your approach to the two different facilities you have in India, where one is regulated and the other unregulated

I guess our actions speak louder than our words. We have invested more in Pipavav (which is unregulated) and we will continue to do so. We are keen on investing in India. About new projects, there is nothing on the table right now.

The company has committed R1,090 crore of the expansion plan to the Pipavav terminal. What would be the total debt on APM Terminals India's books

Yes, we will be making two new investments at Pipavav. We cannot disclose the debt figures as it is a part of the global balance sheet and we do not give it out on a region basis. But debt is not a concern for us like for other port terminals. The biggest concern is slowdown in trade and the other is awaiting new rules from TAMP for the Mumbai facility. We know that the ministry of shipping is working on the new guidelines and we look forward to it.

Is there a country where you want to expand in APAC as the next destination

Yes, we keep looking at expansion opportunities. We would like to invest in Indonesia as it has a large number of industries there. It is a high growth and large market for us and we are evaluating an entry there.

Have you seen the container volumes falling How has the slowdown impacted your business When do you see trade stabilising

Yes, we do see volumes falling. Moreover, the growth in the APAC region has slowed down. This is predominantly due to the European economy slowing down. Europe, as a market, is buying less, which is impacting every industry and because we transport these goods, it has obviously impacted our revenues. I think it will take a couple of years for Europe to come out of its woes. I believe the US will get into the growth mode quicker than Europe.

Has slowdown impacted the Indian terminals too Where does India rank in the APAC region in terms of throughput

India as a market has also slowed in growth and that is evident in its import-export figures. We are so integrated that even we see the impact. In the APAC region, China would be the strongest in terms of volumes. We have eight terminals there. Singapore is big as well but China is the biggest. India comes third after China and Malaysia. We have the Pipavav Terminal in Gujarat and the Gateway Terminal in Mumbai.

What is the profile of the APAC region

We have 13 operating terminals in the APAC region, which contributes almost a fourth to revenues and 26% of APM Terminals overall throughput. We have different ownership percentage in different ports. The APAC region covers ports from India going all the way till Japan and everything in between.