log.india april 2010

April 2010 Vol. 3 - No.07 Rs 100 Germany Bulgaria Middle Eastw

ww

.logi

stic

swee

k.co

m

INDIA

LAST AMONG EQUALS 52Private ports have done well despite odds. A special report

CORRIDOR OF CHANGE 48What the Railway Minister intends to do with the DFC

WANTED, ‘MINISTRY OF LOGISTICS 24Hemant Bhattbhatt of Deloitte weighs in on logistics issues

Top GearAjay Chopra, the CEO of Drive India Enterprise Solutions Ltd (DIESL), reveals the strategy that has helped his company grow by leaps

Page 36

GET 10% OFF ON YOUR FIRST IMPORT SHIPMENT*Sign up on www.choose.dhl.com/india or call up to register on 1800 111 345/30 300 345 and start shipping with DHL IMPORT EXPRESS WORLDWIDE before 31 August 2010 and you’ll save up to 10% on your first import shipment.

GET 10% OFF ON YOUR FIRST IMPORT SHIPMENT*Sign up on www.choose.dhl.com/india or call up to register on 1800 111 345/30 300 345 and start shipping with DHL IMPORT EXPRESS WORLDWIDE before 31 August 2010 and you’ll save up to 10% on your first import shipment.

* Terms & Conditions for the offer can be found on www.choose.dhl.com/india

WE MAKEIMPORTING SIMPLE.

Regulations, middlemen, paperwork and so many other details can leave you tied up in knots. Why not rely on DHL IMPORT EXPRESS WORLDWIDE to untangle your imports? One company door-to-door.

One competitive price. One invoice in one currency. That means fast delivery without excuses or hidden costs. It’s that simple. Sign up on www.choose.dhl.com/india to start saving today.

Or simply call on our helpline numbers 1800 111 345/30 300 345

Importing

Importing with DHL

C

M

Y

CM

MY

CY

CMY

K

ZRBADHD00101R_DHL_Visual_Knot_INDIA_Log India_206wx270h.pdf 3/29/10 5:45:39 PM

Helpline No. 8

Some of our Logistic projects

DVV MEDIA INDIAPresents

SEMINAR ITINERARY

The Automotive Supply Chain Industry:

A Brave New World(A seminar focussing on the Supply Chain Management of the Automotive and Auto-ancillary Industry of India)

Networking Lunch : 12.55 pm – 1.30 pm Networking Tea : 3.30 pm – 4.00 pm Limited seats Rights of admission reserved

The automotive sector has emerged as a strong driver of our economy. Our country has seen the entry of new players thus making the fi eld truly competitive. It is a widely reported fact that India is emerging as a global hub for exports. In terms of exports, India’s auto industry surpassed China’s as Asia’s biggest automobile exporter in the year 2009. The Indian Automotive industry saw an 18 percent growth in 2009 over 2008. Logistics played a very important role in achieving this growth, still there is a lot which needs to be done to make the Supply Chain Management of the Automotive Industry robust.

Auto manufacturers, Original Equipment Manufacturers, Tier I and II suppliers face a host of challenges in auto logistics. The year 2009 saw a huge churn in the auto SCM industry and the industry players have wizened up for calculated growth in the years ahead. The seminar will throw spotlight on the current state of auto logistics, needs, issues, process and service imperatives of this sector.

INDIA

DVV Media India Private Limited, 9, Sona Udyog, Parsi Panchayat Road, Andheri (East), Mumbai 400069

Session 1 The Changing OEM world map: Imperatives for Indian auto SCM players

(Speaker: Amber Dubey, Director-Infrastructure advisory, KPMG India)

Session 2 What do the automakers want? A top down view

(Speaker: SK Krishnan, Senior General Manager SCM, Mahindra and Mahindra)

Session 3 The importance of aftermarket in the auto industry

(Speaker: G Maheswaran, Market Segment Leader - Automotive and Spare Parts, Miebach

Consulting)

Session 4 Innovate or Perish: Cases in Point (Speaker 1: Sanjay Goel, Chairman, GTC Group

Speaker 2: Nitesh Prasad, Zonal Head-North, DIESL)

Session 5 The auto sector revival and how to make the best of the upturn (Panel Discussion)

www.log-india.com

Supporting Media Partner Main Sponsor

Date: April 9, 2010; Time: 9.45 am - 4.00 pm Venue: Indian Habitat Centre, New Delhi -110003

For free registration call at 022 28240198 /28375323

or write to [email protected]

Ready WarehouseAt Chakan Pune

Approximate 5,00,000 sq. ft. area

eDITORIAL >

INDIA| April 2010 | www.log-india.com 7

Good luck rarely comes in pairs, and bad luck never comes alone, goes a Chinese saying. I recently got a taste of this truism when I happened to bungle big time at one of the biggest annual events of the industry where I was a moderator and

that too, alas, amidst some of the best minds of the supply-chain industry. Do you remember the time when you changed channels when a singer in some reality

TV show hit one bad note after another? I was the bad singer in this case (forgot to bring to the stage the profile of the senior-most industry leader in the panel – a most humble man with a terrific sense of humor, the sagacious gentleman volunteered to introduce himself – then I mixed up the cues, asked questions out of turn and context. In short, I stank). The only difference here was that the brave audience held on through this session – not a single guffaw from the audience, no uncomfortable shifting in the seats – while I was at it. Unbelievable! I later figured that the audience stuck it out because they were at this event to hear the other panelists, all of whom were industry thought leaders in their own right. And these leaders – naturally with vast experience of handling such mess-ups – salvaged the situation. Eventually, the discussion went well. So well, that the session

overshot the time limit by almost an hour and we had to politely turn down a couple of audience queries to bring the session to an end.

In sharp contrast, I have hosted discussions where I’ve come off like India’s answer to Larry King, but the whole discussion has turned out to be a damp squib. As R Dinesh, TVS Sons’ joint managing director and one of the aforementioned panelists who saved our day, pointed out to me later, “It is the overall quality and talent of people in any venture that matters. Either way, one individual can’t do much on his or her own. It’s a collective effort.” Indeed!

In more ways than one, this incident was a chance reminder to me of how critical talent and the quality of people is, in our industry – more so, when we speak of increasing the share of logistics outsourcing (which was what the said event was about). But before I proceed to make my point, let me put the term ‘talent’ in the right context – in the way companies see it. The best definition of talent was the one I got from Claus E Heinrich, head, global human resources and labour relations, SAP, who once told me during an interview, “Talent, in a company’s context, is an attribute that is a combination of performance and potential.”

In India, the demand for outsourcing is increasing at such a scorching pace that 3PLs are not able to keep up. According to recent Assocham figures, 3PL outsourcing is increasing at the rate of 16 to 17 percent per year with 55 percent of the companies currently outsourcing services like SCM and warehousing. Contrast this with a recent estimate from Armstrong and Associates, according to which 77 percent of America’s Fortune 500 companies outsource logistics and supply-chain functions. Another fact: The Global Fortune 500 3PL market was pegged at $200 billion in 2008. India’s 3PL market at $58 million in 2009 is but small change in comparison. And from the talks I have had with managers at various levels in India’s 3PL companies, talent (or the lack thereof) is one of the biggest issues in the way to garnering and managing more business.

No need to lose heart though (much like I haven’t, in my small way). The world’s biggest and arguably the best cultivator of talent pool for outsourcing is right next door – India’s IT industry.

Some day, our industry’s thought leaders must do a tour (if they haven’t already) of Infosys’s 2,055-crore GEC (Global Education Center) campus at Mysore to get the full import of the currency that IT companies put on nurturing talent. Another cue can be had from Nasscom’s National Skills Registry (NSR), an excellent initiative that works proactively to build confidence among customers about skills and the reliability of workers employed at the outsourcers.

But for that to happen, many would say, we would need an apex body like Nasscom first. However, referring to an apex body here would be taking things out of context, which I won’t do in this editorial. I have learnt my lesson.

In the Arena

[email protected]

Aanand PandeyEditor

8 INDIA| April 2010 | www.log-india.com

ContentsOpiniOn Action or Reaction?Most companies do not plan for contingencies and thus get sidetracked into firefighting instead of looking at the real issues, notes Padmini Pagadala

COver stOryFull steam DIESL has grown at 100 percent, according to the company, at a time when the rest of industry has clocked 12 percent. Company CEO, Ajay Chopra, lets us in on the secret

34

42

36

36

42

event repOrtMergers and Acquisitions spur Industry The Supply Chain Leadership Council organised an informative summit on the increasing mergers and acquisitions in the industry

34


ApriL 2010

48

52reGULArs

events 62APRIL 2010

news 11privAte pOrtsLast Among equals

The Dedicated Freight Corridor will lead to a spurt in industrial growth

Private ports have added to the significant growth of traffic movement over the years, and are growing at a healthy growth rate of 26.4 percent despite the recession and red tape

ADVeRtIseR InDeX

BLR Logistiks (I) Ltd. ........................................... 27

Capricorn Logisitcs ............................................. 23

CII Logistics Supply Chain .................................. 45

Excellence Conference 2010

DHL Express ....................................................... IFC

DP World ............................................................. BC

Everest Industries Ltd. ........................................... 3

Exide Industrial.....................................................13

Green Earth Translogistics Pvt. Ltd. ................... IBC

IACT Global ......................................................... 47

Infolog Solutions ...................................................17

Infolog Solutions .................................................. 59

ISCM ....................................................................19

Jaguar Overseas Ltd. .......................................... 21

Prakash Parcel Services ...................................... 21

LMJ Logistics ...................................................... 29

PSB Logistics .......................................................10

Piaggio Vehicles Private Limited ............................ 5

Round The Clock Logistics .................................. 39

Safexpress Pvt. Ltd. .............................................15

Saudi Transtec .................................................... 31

Vijay Logistics ....................................................... 6

Page 32

In an exclusive interview Kamal Nath, Union Minister of road transport and highways, promises swift ramp up of infrastructure

March 2010 Vol. 3 - No.06 Rs 100Germany Bulgaria Middle East

ww

w.lo

g-in

dia.

com

INDIA

The A-lIsT 59Log.India presents the A-List of the top transport companies from across the country

sIMPly reAd 48Capt.Gopinath’s autobiography is out and is riveting

looK before yoU bUy 26Discerning the quality of goods at the right price calls for skills

2010: The Decade of Infrastructure

52

48

FreiGHt COrriDOrCorridor of Change

MArCH 2010

Empowering business through unique integrated solutions

Whatever the destinationWhatever the cargo

We provide solutions

Branches:• NEW DELHI • MUMBAI • BENGALURU • CHENNAI • LUDHIANA • KANDLA • JAIPUR • KOLKATA • MORADABAD • HYDERABAD

• AHMEDABAD • THIRUVANANTHAPURAM • KOCHI • MUNDRA • AMRITSAR • JODHPUR

Corporate Office: D-10, IIIrd Floor, South Extension Part-II, New Delhi - 110049Tel: +91 11 46055300; Fax: +91 11 41552911; email: [email protected]; website: www.psblogistics.com

Little wonder customers trust our knowledge,skill & experience for shipments as diverseas satellite equipment & power plants toFormula 1 cars & thoroughbred horses

11INDIA| April 2010 | www.log-india.com

< news

All NMDP projects to be implemented by 2011-12: Vasan

When the Shipping Minis-ter, the unassuming GK Vasan rose to deliver his

opening speech at an industry summit on logistics outsourc-ing held on March 17 and 18, few expected the slew of far-reaching announcements that were about to come their way. Speaking at the summit held at Hotel Lalit Intercontinental and organised by Confederation of Indian In-dustry’s Institute of Logistics, the Minister informed the audi-ence comprising manufactur-ers, logistics service providers, consultants and media scribes that the annual aggregate capac-ity of ports in India is to see a

Confederation of Indian Industry.................................. 11

NMDP, TVS Sons Ltd, KPMG, Crisil, Lucas TVS, Aviall India ...12

Mahindra & Mahindra, Navistar, DIESL, Ford, SCI, Age Group, General Motors, Tata Motors ..14

Tata Motors, Ashok Leyland, Volvo-Eicher, Blue Dart, Afcons Infra, Shapoorji Pallonji ..........16

TNT Express, Kerry Logistics, TCI, TDL. ................................18

Capricorn Logistics ................19

SSLL, RSWC, Mercator, UPS.... 20

DPD, NHAI,..............................22

Deloitte....... ........................... 24

Vizhinjam International Sea Port Ltd....... .......................... 26

Railway Industry Association, Aryan Cargo, South Eastern Railway, Kolkata Metro Rail Corp.... ...... 30

Airport Authority of India....... 32

Ministry of Civil Aviation, National Maritime University....... ........ 33

OPERATIVE INDEX*

*Key entities mentioned in the news section

The two-day CII Institute of Logistics Outsourcing Summit 2010 saw a gathering of thought leaders, including Shipping Minister GK Vasan, who discussed ways to take the logistics outsourcing industry to global standards

Reduction of significant wastages in storage as well as in the operations

of the existing food supply chains in the country...needs to be addressed.

— Finance Minister Pranab Mukherjee in his Budget

2010-11 speech

Train of Thought

Members of the audience in full strength

Worldwide our fill rates from our vendors is of the order of 90 pc to 95 pc. In India, we are struggling at 60 pc. So the opportunity of supply chain in India is huge and as a result that leads to overstocking of the warehouses, at the distribution centre and so on.

— Raj JainMD, Wal-Mart India,

in Economic Times

I’m very clear in my mind: wherever there are land acquisition issues, I will bandon the project instead of trying to struggle with it. If the state governments don’t have the appetite for roads, it’s okay. We go to another state... — Kamal Nath, Union Minister for

Road Transport & Highways to the Press

12

< news

INDIA| April 2010 | www.log-india.com

sharp rise by 2012. He added that the annual capacity of the major ports will increase 74 percent to reach one billion tonnes in the next two years. In 2008-09, the total aggregate capacity of ma-jor ports was 575 million tones when the traffic was around 530 million tonnes. By 2013-14 the traffic at major ports is set to reach 674 million tones (source:

Crisil Research), hence the bil-lion-tonnage capacity looks very much in pace with the traffic growth. At non-major ports, the capacity would reach 580 mt by the end of the 11th Five Year Plan (2007-2012). “The annual capac-ity of the major and non-major ports combined will be 1.5 bil-lion by 2012,” said Vasan.

With the port traffic at non-major ports expected to grow from 231 million tonnes in 2008-09 to 493 million tonnes in 2013-14, according to Crisil, led by high growth in coal and con-tainer traffic, Vasan’s announce-ment about government’s major

capacity push sent positive sig-nals to the leaders of the logistics domain in the audience and the industry at large.

Given the stellar perform-ance of non-major ports that are set to outpace the growth of major ports – expected to grow at a compound annual growth rate (CAGR) of 16.3 percent (as against major ports’ 4.9 percent)

– the sector could expect more support from the government. The Minister said his team is considering a proposal for road and rail connectivity to non-major ports at a cost of Rs 500 crore. He spoke about the near-term goals of National Mari-time Development Programme (NMDP) -- formulated in 2006 to complement the National Maritime Policy. “We are im-plementing Rs one-lakh-crore National Maritime Develop-ment Programme (NMDP) and out of this Rs 55,804 crore is for ports while remaining will go for shipping and inland water-

ways,” said Vasan.Under the programme, 50 out

of 276 projects identified have been completed. “All the NMDP projects will be implemented by 2011-12,” he said.

Luminaries galoreThe summit was chaired by TVS Sons Ltd Joint Managing Direc-tor R Dinesh. In his welcome

address, Dinesh complimented Vasan on the notable strides the latter’s Ministry has taken. Di-nesh also pointed out why logis-tics -- and in extension logistics outsourcing – has become key to the industry’s growth in view of rising exim volumes. “Globally, outsourcing has come to be seen as a bad term, a notion that needs to be dispelled. Outsourcing’s relevance to the quality and the volume of service and manufac-turing output has but increased exponentially around the world,” he told Log.India on the sidelines of the event.

Narayanan Ramaswamy, ex-

ecutive director of KPMG high-lighted main points from the study that KPMG has published on the theme of the event.

Prem Verma, the chief execu-tive officer (CEO) of Tata Motors Limited Distribution Company Limited (TDCL) emphasised dur-ing a panel discussion on best practices in outsourcing that trust, accountability and a keen-ness to provide the greatest value to companies are traits that dis-tinguish the best service provid-ers from the rest.

Dr N Ravichandran, CEO, Lucas TVS, said that companies must plan for the long term be-fore taking short-term actions. He stressed for principals to get buy-in from stakeholders before embarking on outsourcing. He said that companies, when out-sourcing, must look to find part-ners, not just vendors.

Sachin Taparia, MD of Aviall India (a Boeing Company) – the Indian arm of Aviall that is the world’s largest provider of avia-tion and defense aftermarket air-craft parts – pointed out that the Indian defense market is one of the fastest growing in the world, pegged by Boeing to be a $31-bil-lion market in the next 10 years. The Indian aviation, defense and aerospace markets provide big opportunities to service provid-ers and vendors, he said, and outlined challenges like lack of delivery certainty, infrastructure and transparency issues and the startup nature of the industry.

The two-day summit saw presentations and panel partici-pation from many more leading companies and industry thought leaders such as Moserbaer India Sr Vice President Vibhas Joshi, Toll Logistics Managing Director Ajit Jangle, Miebach Consulting India Director Bala Ramasubra-maniam, to name a few.

Shipping Minister GK Vasan unveils the KPMG report at the summit. (From left to right) Prem K

Verma, CEO, TML Distribution Company Limited (TDCL); R Narayanan, Partner, KPMG Advisory

Services; GK Vasan, Minister of Shipping, Government of India; R Dinesh, Member, National Lo-

gistics Council & JMD, TVS Sons Ltd; K V Mahidhar, Head - CII Institute of Logistics

Driving the Warehousing Revolution

Safexpress Pvt Ltd, NH 8, Mahipalpur Extension, New Delhi - 110037, India. Tel: 91 11 26783281. Fax: 91 11 26781481/82.

NAGPUR LOGISTICS PARK Over 11,90,000 sq. ft. of warehousing space.

NH 6.Strategically located on

AHMEDABAD LOGISTICS PARK Over 2,74,000 sq. ft. of warehousing space. NH 8A. Strategically located on

GURGAON LOGISTICS PARKOver 1,95,000 sq. ft. of warehousing space.Strategically located on Sohna road.

KOLKATA LOGISTICS PARK Over 1,84,000 sq. ft. of warehousing space. Strategically located on NH 2.

< news

M&M to invest Rs 5,000 cr in new plant Pune

Ford mulls entering commercial vehicles segment in IndiaMumbai

Gopalpur

Mahindra & Mahindra (M&M) is investing Rs 5,000 crore

on Phase 1 of its new plant in Chakan near the Pune. Half of the Rs 5,000 crore has already been invested and the remain-der would come over the next 3-4 years, bringing the plant’s capac-ity to 300,000 units. The com-pany has not decided on approval for a second phase, which would take a further three years and would raise the plant’s capacity by another 250,000 units.

The new plant has started rolling out its new mini truck Maxximo. Medium and heavy trucks from its joint venture with US-based truck and engine mak-er Navistar will also roll out from this plant, followed by variants of the Xylo, and its new premium sport utility vehicle scheduled to be launched in 2011.

The Scorpio pick-up truck, to

Auto maker Ford India, the local arm of Ford Motor

Co, has plans to enter the fast-growing Indian commercial vehicles segment.

Commercial vehicles can complement Ford’s plans of be-ing a volume player in India. Meanwhile, Ford India is study-ing the Indian market and ex-pects to firm up plans by the end of the current year. The compa-ny is eyeing the highly utilitar-ian sub-5 tonne pickup trucks from its Chennai facility.

The facility has a capacity to

make 200,000 passenger cars and 250,000 engines every year.

With a high import duty of 107 percent, it did not make eco-nomic sense for Ford to import pickups from Thailand.

India’s light commercial vehicles market has been grow-ing in double digits, driven by a rising need for vehicles that can transport people and goods on shorter and congested routes. In the 10 months ended Janu-ary, the segment, which is dominated by Tata Motors Ltd’s sub-1 tonne Ace, grew 30 per-

cent to 406,019 units.Ford’s rival General Motors

India (GM) has recently entered into a collaboration with Shang-hai Automotive Industry Corp. to develop and manufacture LCVs in the passenger and goods carrier segment. GM plans to produce the vehicles for Indian and exports markets from its facilities at Talegaon near Pune and Halol in Gujarat.

Global auto makers are tap-ping into India’s commercial vehicles segment encouraged by its growth potential.

Company News

vehicles and 50,000 trucks. The project would be funded through a combination of equity and debt provided by the parent company and several of its units.

Moreover, compliance with Euro III emission norms could not take place for at least 3-4 months since the fuel for this is not available.

On a roll: Mahindra expects the huge capacity creation to commensurate with market demand

be launched in the US this year, will come from its existing plant in Nashik, in Maharashtra. Once Phase II is completed the plant will be enough to serve the needs of Mahindra for at least 10 years, according to a press release.

In the initial phase, the new unit with four assembly lines will be making 250,000 utility

State-owned Shipping Cor-poration of India Ltd (SCI)

and Shipping Corp of South Africa have begun discussions on setting up a joint venture shipping company. India’s biggest ocean carrier and the South African firm have hired consultancy firm KPMG to draw up the details of the pro-posed joint venture, including the likely equity stakes to be held by the two parties. Ship-ping Corp of South Africa is a wholly owned subsidiary of African General Equity Group (Pty) Ltd, or AGE Group.

The proposed joint venture shipping company would cater to dry bulk cargo such as coal and iron ore exported from South Africa and the import of liquid cargo.

Drive India Enterprise Solu-tions (DIESL) has received

the Castrol Award 2010 for CFA (Commission & Forward-ing Agent) operations. The award was given away by Ad-nan Ahmad, director (SCM), Asia Pacific, Castrol.

Fifteen CFAs were in the fray for the award. DIESL be-ing the highest sales grosser in the North and its cus-tomer service in the Indus-trial and Heavy Duty Market segment led them to achieve this award.

SCI and Shipping Corp of SA in talks for JVBengaluru

DIESL receives Castrol Award for logisticsMumbai

14 INDIA| April 2010 | www.log-india.com14

upto15%extra capacity

powered by

Heat Sealed Traction Batteries for Fork Lift trucks

* Conditions apply

5year warranty*

Spines cast at 100 Bar pressure Optimum active material Longer run time Longer life Higher reliability Lower operational cost

It’s a winner all the way

Synergic/GX/EIL/10

Visit us at : www.exide4u.comor e -mail : [email protected] or [email protected]

16

< news


Blue Dart Express plans to increase exposure in India’s

hinterland by targeting small-size acquisitions of niche region-al players. The company is will-ing to spend Rs 100-150 crore for small-ticket acquisitions but is not in talks with any players at present. The firm is scouting for buys in Madhya Pradesh, Gu-jarat and North East. Logistics is among the top five sectors which got most investments in 2009.

According to analysts, more mergers and acquisitions are likely over the next couple of years as firms expand to keep up with the fast-paced demand of the world’s second-fastest

growing major economy. Eco-nomic recovery and greater industrial activity has spurred Blue Dart to raise its capital ex-penditure by half in 2010. The firm, which follows the calen-dar year as its fiscal, plans to spend Rs 850-900 million for capital expansion in 2010 com-pared with 600 million in 2009. Investments will be in transit warehouses and hubs and air-port facilities.

The company, which runs warehouses on lease, plans to open warehouses in Delhi, Ban-galore and Chennai this year.

Blue Dart, which gets 83 percent of its revenues from air

freight services, operates a fleet of seven aircraft. It has seen positive growth in the first two months of 2010 and expects to see double digit growth of be-low 20 percent in the fiscal year ending December 2010. Blue Dart saw consolidated revenues falling seven percent in 2009 to about Rs 907 crore.

Meanwhile the company is expanding its ground services network, which accounts for about 17 percent of revenue. Blue Dart expects to increase contribution of the ground services segment to its overall revenue to over 30 percent in three years.

Blue Dart eyes regional players for buysMumbai

Tata Motors aims to top record Feb sales Mumbai

India’s largest commercial ve-hicle maker, Tata Motors Ltd,

is aiming to top its record Feb-ruary sales of 39,205 trucks and buses this month.

This year, March sales have been boosted further by the prospect of new emission regu-lations being imposed from April—which has advanced purchasing decisions—as well as the good performance of export-import, mining and in-frastructure sectors.

All new vehicles registered in 13 cities from April will have to meet Euro IV emis-sion norms, while the rest of the country will switch to Euro III, according to the new regulations. As the shift will also likely raise vehicle pric-es, operators of commercial

vehicles have advanced pur-chases to March.

Industry sources indicate that Tata Motors was planning to produce more than 45,000 commercial vehicles in March, up from 29,479 trucks and bus-es in the corresponding month a year ago.

The sales of trucks, a key barometer of economic per-formance, declined by almost two-thirds after October 2008 as the global economy slowed. But they regained momentum in the second half of 2009 thanks to the economic recovery, and sales are now accelerating.

Tata Motors is also expected to hike prices in April; analysts expect the increase to be be-tween 3 percent and 5 percent.

Besides Tata Motors, other commercial vehicle makers such as Ashok Leyland Ltd and Volvo-Eicher Commercial Vehicles Ltd are also betting on the last month of the f is-

cal to make up numbers. Ac-cording to a supplier, Ashok Leyland plans to make around 9,000 trucks and buses in March against its monthly av-erage of 6,000.

The new emission regulations are expected to boost sales of

heavy commercial vehicles and buses

Afcons Infrastructure Ltd, belonging to the Shapoorji

Pallonji Group, in a 50:50 joint venture partnership with Tran-stonnelstory Ltd of Russia, has bagged the Rs 938-crore Kolkata Metro contract for constructing a transportation tunnel below the Hooghly riv-erbed. The project is part of the Rs 4874.58 crore East-West Metro Corridor project.

East-West Metro, the coun-try’s first metro transit to pass below a riverbed, will cover a distance of 14.67 km, connect-ing Howrah with Salt Lake.

Afcons venture bags Kolkata Metro contract Kolkata

18

< news


TNT Express launches new system for import shipmentsBengaluru

Kerry Logistics opens new chemical tank depot in ThailandBangkok

TCI separates real estate and warehousing armNew Delhi

TNT Express has launched its new worldwide “ex-

press import” system which gives customers complete control over their import shipments. This web-based tool lets companies order the collection of import ship-ments from around 170 coun-tries with quotations and bill-

ing in their local currency to better control shipping costs.

TNT’s system enhances its current express import services and is available to all customers regardless of the type or size of their business, and whether they are sourc-ing f inished goods or spare parts from multiple suppliers

Kerry Logistics has strength-ened its chemical logistics

footprint in Thailand, opening a 10,500 sq m ISO tank depot in-corporating a 1,000 TEU storage facility and 8 cleaning bays.

The new depot means that Kerry-ITS Terminals is man-aging a total of 31,500 sq m of depots across Asia including Singapore, China, Vietnam and Thailand. Kerry-ITS total re-gional storage capacity is now 2,750 TEUs incorporating 40 cleaning bays.

“Demand for bulk chemical

services in Thailand is growing and the new depot will provide a full range of specialist serv-ices. The facility is strategically located six kilometers from Laem Chabang Port with direct road access to Bangkok,” said Robert Tan, Managing Direc-tor, South Asia.

Kerry-ITS Terminal was established in 2009 as part of Kerry Logistics’ business di-versification strategy. It offers a range of ISO tank solutions to the chemical industry, and repairing and trading services.

The board of directors of Transport Corporation of

India Limited (TCI), India’s leading integrated supply chain and logistics solutions provider, has approved the de-merger of its real estate and warehousing undertaking into a new company, TCI Develop-er’s Limited (TDL).

The management believes that its real estate and ware-housing undertaking has the

potential to develop the com-pany’s existing real estate into commercial ventures as well as create a focused entity to develop large scale logistics infrastructure projects like multi-modal logistics parks, truck terminals, and free trade warehousing zones.

By creating a separate en-tity, the management intends to provide strategic direction and raise funds for its development

plans on the strength of its fu-ture profitability and growth plans in the real estate and warehouse construction sector.

According to the company, the strategic and financial needs of the real estate and warehous-ing business are different from that of the logistics business. Investment in real estate and warehousing is more capital-intensive and yields return over a longer period of time in com-

parison to the services model of the logistics business.

The book value of the un-dertaking being demerged comprising properties and investment amounts to ap-proximately Rs 50 crore. The company presently has real estate properties in metropoli-tan and tier II cities including Delhi- NCR, Chennai, Pune, Nagpur, Bangalore, Ahmeda-bad and others.

around the world.A unique feature of the sys-

tem is the option to request a quotation before the book-ing is completed. This means customers can effectively de-cide when their import ship-ment will arrive and at what cost. TNT ships the goods via its ground or air network,

depending on the customer’s budget and timeline require-ments.

TNT’s express import sys-tem not only offers greater control, it is convenient to use and highly automated. The importing customer enters orders online and connects to the sender via email.

The new depot will cater to local corporations


< news

TNT Express launches new system for import shipmentsBengaluru

Capricorn Logistics granted ‘Class A License’ to operate in Shanghai Shanghai

Kerry Logistics opens new chemical tank depot in ThailandBangkok

Capricorn Logistics, a lead-ing logistics and supply

chain service provider, was recently granted Class-A li-cense by the ministry of foreign trade & economic cooperation (MOFTEC) in Shanghai to op-erate as an international freight forwarder in the People’s Re-public of China (PRC).

Capricorn Logistics already offers extensive coverage in China with its full-fledged op-erations in Shenzhen and Hong Kong since 2008.

The acquirement of this li-cense will further enable Cap-

ricorn to strengthen its Asia Pacific network and reach out to its customers by providing them

Post Graduate Program in

Supply Chain Management(Full Time – 40 weeks)

Exec. Post Graduate Program in

Supply Chain Management(Part time – 40 weekends)

Institute of Supply Chain Managementinvites applications for

Institute of Supply Chain Management, C/o Kirandevi Saraf Institute,Ghanshyamdas Saraf College, S.V. Road, Malad (W),

Mumbai: 400064. Tel: 022- 65182017, Cell: 09004269801

Eligibility: Graduation

ADMISSIONS OPEN for 2010

in collaboration with

local know-how and best possi-ble service coupled with highest level of supply chain expertise.

Sheetal Shetty, president of Capricorn Logistics, Hong Kong & China, said, “This license rein-forces our ability to fulfill our cli-ent’s local logistics requirements through our well-established global network and dedicated service. The license will estab-lish us as one of the few Indian logistics entities with their own operational network in China.”

China is one of those com-mercially lucrative hubs where the multinationals and even small to mid-size firms all over the world are making a beeline for their business.

Capricorn’s new reach will help improve its AsiaPac network

20

< news


SSLL and RSWC ink strategic partnershipMumbai

Mercator Lines adds to its fleet Mumbai

In a first of its kind public-pri-vate partnership, Shree Shub-

ham Logistics Limited (SSLL), a complete commodity value chain solutions provider hav-ing its own strong network of agri-logistics parks (ALPs) has entered into a Memorandum of Understanding (MoU) with Rajasthan State Warehousing Corporation (RSWC), a public sector undertaking in Rajas-than last month. The part-nership is expected to benefit thousands of farmers and agri-cultural commodity traders.

With approximately 90 ware-houses and an aggregate stor-age capacity of over 7,60,000 MT spread across Rajasthan, RSWC has been successfully providing storage and preservation serv-ices for both agricultural and non-agricultural commodities since the last 51 years.

The government of Ra-jasthan has taken various pioneering initiatives to help farmers of the state. Through

Mercator Lines Limited, India’s second largest

private sector shipping com-pany (in terms of tonnage), has acquired 1993 built MR Tanker of 42,235 DWT. It had acquired a similar type of vessel in December 2009. The cost of acquisition of both the vessels was about Rs 83 crore, which was fi-nanced through a mix of

debt and internal accruals. Further, the Singapore-

based subsidiary Mercator Lines (Singapore) Ltd has recently contracted to pur-chase a modern gearless Panamax Dry bulk carrier for approximately Rs 175 crore. The vessel is less than three years old, built in 2007 and has a capacity of about 74,483 DWT.

AppOintments

mark Khambatta is Ups Country managerUPS has appointed Mark Khambatta as country manager of India. In his new role, Mark hasoverall responsibility for UPS’s express and supply chain operations in India.Prior to this new appointment, Khambatta was country manager for UPS’s supply chain operations in India. He was also previously responsible for managing UPS’s supply chain operations in the Philippines, Guam andSaipan.

Simultaneously, UPS has also appointed Vikram Mansukhani as operations manager for its joint venture. In this capacity, Mansukhani has responsibility for the day-to-day express operations of the company.

Prior to his current position, Vikram was the industrial engineering manager for UPS Jetair Express in India where he oversaw the operations infrastructure and network across India.

this unique public private partnership RSWC with SSLL will now offer a compre-hensive range of serv-ices including weigh-ing, cleaning, grading and sorting, procure-ment, transportation, testing and certifica-tion in addition to storage and preserva-tion and arranging finance at reasonable rates thus increasing transparency in the agricultural sector and giving true value to our farmers.

The main objectives of this MoU are to provide better stor-age facilities to farmers, traders and other market participants. SSLL will manage 38 ware-houses of RSWC with a stor-age capacity of around 405,000 MT thus providing benefits to all commodity stakeholders across Rajasthan. It will also

facilitate availability of finance and evolve various models for the purpose of development of an efficient warehousing facil-ity with strategic and techno-logical support.

SSLL will upgrade all the RSWC warehouses with the latest technology and equip-ment including electronic weigh bridges, warehouse management software and

testing and certification labo-ratories. It will provide com-modity funding services to all RSWC customers through its tie up with various banks/fi-nancial institutions.

This arrangement between RSWC and SSLL will provide integrated services under a sin-gle window to all farmers, trad-ers and various stakeholders in agri-commodity chain.

SSLL’s decision to partner with the public sector RSWC will benefit farmers and agri-commodity traders

Ethiopia

MozambiqueCongo

C.A.R.

Yemen

Afghanistan

BeninLaos

India Myanmar

Burkina Faso

Guinea

Turn key construction of industrial plants

Turn key construction of industrial warehouses

Leasing out of ready to move in warehouses/ service sheds at Kakinada (A.P.) (Specially designed for Oil & Gas companies)

Jaguar Overseas LimitedSuite No 109, Tower-I, 70, Najafgarh Road, B-39, New Delhi-110015 (India)Phone: +91-11-3051 2000, 3051 2080, Fax: +91-11-3051 2020Email: [email protected], Website: www.jaguaroverseas.com

22

< news


DPD unveils intelligent sortation equipmentNew Delhi

NHAI modifies net worth criteria for projectsNew Delhi

DPD has launched a state-of-the art sorter took place in

Russia. The intelligent sorta-tion equipment is unmatched on the Russian express parcel market.

As the volumes or parcels and freight delivered by DPD continuously grow, this scheme makes it possible for DPD to operate more effectively, offer high quality of transportation

logistics services and adapt to the dynamic requirements of today’s marketplace.

The opening of the new sorter means a significant ex-pansion of DPD’s operations capacity. The number of par-cels processed at the central hub daily can be increased by 50 percent. The intelligent con-trol system of the sorter which is run by one operator from a

central programmable logic control unit, allows optimum utilisation of the hub capacity. Due to the automation of parcel scanning, sorting, weighing and measuring operations the deployment of the sorter con-siderably reduces manual work and nullifies the probability of errors.

In 2010, the advanced sort-ing equipment will help DPD

process over five million par-cels at its central hub.

The automated sorter and its intellectual control system complying with the industry’s top international standards have been manufactured, in-stalled and put into opera-tion by BEUMER, a worldwide leader in material handling and sorting solutions, a company of a German origin.

There will be changes in the bidding parameters for

projects to attract participation from large and foreign firms soon implemented by the Na-tional Highways Authority of India (NHAI). The changes, which include higher net worth requirement for mega projects, also encourages large firms to have more equity stake in the special purpose vehicle (SPV) that will execute the project.

In the revised norms, NHAI has increased the net-worth required for participating in projects over Rs 2,000 crore. At present, the net worth clause was flat 25 percent of the total project cost for all the projects. Now, the NHAI has proposed that projects with a total cost of Rs 2,000 crore to Rs 3,000 crore will attract a total net worth criteria of Rs 500 crore plus 50 percent of the cost above Rs 2,000 crore. So, for bidding for a project with es-timated cost of Rs 2,800 crore,

the bidder’s net worth has to be Rs 900 crore.

The criteria becomes fur-ther stringent for projects of above Rs 3,000 crore, where the concessionaire has to have a net worth of Rs 1,000 crore plus 100 percent of the cost above Rs 3,000 crore.

NHAI has also decided to count the technical and experi-ence score of companies only to the extent of their equity par-ticipation in the bidding consor-tium. This is aimed at discourag-ing the current practice where many smaller Indian firms tied up with large, foreign firms while bidding for large projects only to beef up the technical score. The technical score of only those firms will be counted who have over 26 percent equity par-ticipation in a project.

Additionally, the financial closure criterion has also been made more stringent for large projects. If a company has two projects of over Rs 3,000 crore

for which it has not attained fi-nancial closure, then it cannot bid financially for new projects.

NHAI had recently intro-duced the financial closure crite-ria where in it barred companies from bidding for new projects if they had not attained financial closure for over three projects.

For example, companies such as Larsen and Toubro Ltd, with a net worth of around Rs 12,500 crore in 2008-09, and

the IVRCL group with a com-bined net worth of around Rs 4,500 crore, will be able to par-ticipate in projects above Rs 3,000 crore.

Financial closure has at times taken more than a year, leading to delays and cost escalation. The new norm will make it dif-ficult for smaller players to take large projects, which may, even-tually, stretch their financial and technical capabilities.

Product and Technology News

Roads

Financially sound companies have a better chance of bidding for

large infrastructure projects

24

< news


Logistics & Supply Chain Excellence Conference 201023 April 2010Maple Hall, Hotel Express Residency, Vadodara

CII is organising the first edition of Logistics & Supply Chain Excellence Conference 2010 on April 23, 2010 at Maple Hall, Hotel Express Residency, Alkapuri, Vadodara.

The conference focuses on the problems experienced and chal-lenges faced by end users of supply chain and logistics services. It will address key areas of developing efficient supply chains, ways to effectively deal with interplay of logistics functions, emerging trends

in logistics management, practical and implementable solutions for the issues identified by participants and offer valuable insights through inter-action with subject matter experts.

The event will mainly focus on users of logistics services, and will endeavour to explore options and find practical solutions to the issues identi-fied by the user fraternity through discussions as well as a survey of user industry. An interactive approach and higher emphasis on greater interaction between participants and experts is also on the anvil.

Deloitte has chosen to partner CII as its official knowledge partner and TransREporter and Log.India are the official publication partners.

Industry Events and Association Activities

Wanted, a ‘Ministry of Logistics’

The market for manu-facturing is looking up. But logistics is groaning

under the strain. End users say low cost and low investment leads to slow turnaround time in delivery. What are the steps needed to improve this?

There are twin forces at work – the growth of the demand for logistics support owing to growth in the manufacturing activity and the increasing ex-pectations of the users of logis-tics services that contribute to the increasing pressure on the sector. Both are irreversible and welcome trends that the logistics industry will have to adjust to. Indian competitiveness in global markets is predominantly based on ‘price’ and the edge is owing to the low cost of manufacture. In its obsession with costs, scant attention has been paid to issues like standardisation of material handling equipment and storage facilities, enhanced usage of web based technologies and GPS,

The 3PL model in its effective form is more than just an as-sembly of capabilities to handle all aspects of the supply chain like transportation, material handling, storage and paper-work. It is more about the ‘logi-cal’ part rather than the physical part. Clients need the assurance that there is either a cost advan-tage, or a value added advantage or both to patronise 3PL’s in big way. Service providers’ capabili-ties in creatively and efficiently handling the ‘end to end logis-tics’ challenges of clients and the ability to demonstrate the superiority of their suggestions through quick and structured options analysis would go a long way in convincing compa-nies to shift from 2PL models to 3PL models. The more sophisti-

Hemant Bhattbhatt, Transportation Leader, Deloitte (India), explains the importance of integrating processes to improve efficiencies, in an interview with Jayashree Kini Mendes

Hemant BhattbhattTransportation leader, Deloitte, India

manpower training etc. The ap-proach has been more tactical and less strategic. The initial focus has been on transporta-tion infrastructure improvement and rightly so. However as the economy matures, we now need to shift our attention to the other parts of the logistics industry and adopt a more holistic view of the situation. A huge integrator is ‘meaningful, real-time, accurate information’. Especially there is a need for creation of ‘transpar-ent spot markets’ that can ad-dress the market imperfections arising from lack of information on options available in terms of service and cost, which often weds service users to service pro-viders into unhappy marriages. Such competition will deliver efficiencies, lower costs and im-prove turnaround times. A lot will need to be done to better the lot of the unorganised sector’s extremely micro-enterprises, like truckers, constituting the spine of the supply-chains. The continuous power imbalance vis-à-vis service users that these constituents have suffered has come back to haunt the users in the form of poor service and slow pace of technology adaptation.

The market for expert 3PLs holds huge promise. Companies need to move from a low cost internal 2PL model to a complex and competitive 3PL model? Do you foresee this happening? How can it be done?HB: Such market shifts can hap-pen only when significant value addition is clearly experienced.

cated 3PLs have already recog-nized that while infrastructure and assets are important they are not the end-all. Key to their growth is building supply chain design capabilities and they are wisely investing in.

A huge chunk of manufacturers are dismissive of using rail as a viable option to move goods in the near- to medium-term. What are the issues here that need to be rectified?HB: Several issues – cost, se-curity, timeliness and above all meaningful accountabil-ity/ recourse. With the indus-try corridors being executed it would not be honest to dismiss rail as a viable option and I can foresee the same sceptics lining

Continued on pag 26

“The Schaefer Satellite System saves us a lot of time during storage and retrieval, and hence reduces our labour cost.”

Mr. Jo Kyu HakDreamsco Inc., Korea

Schaefer Systems International Pvt. LtdA 1-4 ,Gurudutt Co-operative Hsng Sty Ltd, Om Nagar, Ajit Nagar, Off J.B. Nagar, Andheri (East), Mumbai - 400 059 INDIAPhone +91/ 22/ 6741 0770-74 Fax +91/ 22/ 6741 0777eMail [email protected]

Regional HQ:Schaefer Systems International Pte Ltd73 Tuas Ave 1Singapore 639512Phone +65/ 6863 0168Fax +65/ 6863 0288eMail [email protected] www.ssi-schaefer-asia.com

SCHAEFER Satellite System Versatile, Efficient, Intelligent

The perfect alternative to Drive-in pallet racking system, for the storage of high volumes of compatible products, the SCHAEFER Satellite System (SSS) is versatile and highly effective in reducing handling time and increase overall productivity.

Operates using Radio-Frequency (RF) control, the Satellite System will increase the average pallet cycle time, without any need for special MH equipment. It offers high degree of accessibility and reduce total investment cost as it stores and retrieves pallets, in either FIFO or FILO operations.

Interested to find out more? Call us today, or visit us at www.ssi-schaefer-asia.com

LOG India_206x260mm_SSS.indd 1 01/07/2009 09:12:41

26

< news


Andaman & Nicobar port proposal gets Centre’s approvalChennai

The Andaman and Nicobar (A&N) will become India’s

13th major port with the Union Cabinet clearing this proposal of the Shipping Ministry. The approval came within a record seven months of submission.

The A&N set of ports will be declared as a major port with the establishment of the Andaman and Nicobar Port Trust with its headquarters at Port Blair.

All the provisions of the Ma-jor Port Trusts Act, 1963, will be extended to the port trust.

Accordingly, the Port Man-agement Board will be dis-banded and transferred to the proposed A&N Port Trust.

The Andaman and Lakshad-weep Harbour Works will be bi-

furcated and transferred a part of its establishment to the port trust and to take consequential actions with reference to the above declaration.

When the UPA Govern-ment came back to power last year, the Shipping Ministry’s 100-day agenda included the proposal to make A&N as a major port. The A&N islands are a chain of Islands measur-ing over 900 km from north to south.

Out of the total 572 small and big islands only 36 are in-habited. In 1952 the port lim-its were extended to five ports of A&N Islands of Mayabun-der, Port Blair, Eliphinstone Harbour, Car Nicobar and Nancowary.

However, till mid sixties there were hardly any port facil-ities available at these ports in real terms. In 1981, the Centre initiated action to reorganise port setup and a Port Manage-ment Board for Administration and Management of Ports & Harbours in A&N Islands was constituted.

The Port Management Board manages 23 ports spread across the islands and out of those 23 ports 9 ports are de-clared as wharfage ports and cargo-related charges are lev-ied. In all the nine cargo han-dling ports vessels between 5 metre and 9 metre draft are berthed and provided with re-quired port facilities.

The establishment of the

Ports

Work on the proposed Vizhinjam interna-

tional transhipment con-tainer terminal is expected to start this year. An inves-tor’s meet is anticipated to take place soon to discuss implementation of the project.

The state government is confident of identifying an investor by November-December 2010, following which the construction of the port would formally start. The government has committed to develop the basic infrastructure, which includes rail and road con-nectivity to the port site, and has set aside Rs 450 crore for the purpose. Related work would be undertaken by a separate company, the Vizhinjam International Sea Port Ltd (VISL).

Work on Vizhinjam port to start this year Thiruvananthapuram

Major Port Trust will provide more power to the trust to help commercial development and tourism, and attract more for-eign direct investment in the islands.

Being strategically located in the international shipping route, the Andaman and Nico-bar is potentially seen as a ma-jor maritime region. Also, the region has close proximity to service volumes of cargo and large vessels for the neighbour-ing ASEAN countries’ ports.

up to set up industries alongside to benefit from the development. I take the dismissal as an indica-tion of exasperation of the in-dustry. Rail can never beat road transportation so far as last mile connectivity is concerned. Where it can is handling bulk, provid-ing timeliness and safe/ secure transportation. The subsidisa-tion of passenger transport at the cost of cargo can be addressed by increasing private participation.

What are the changes needed to improve road transport to bring in efficiencies?HB: The road sector suffers from a preponderance of the ‘unorgan-ised players’ in service provision, multi-tolling stoppages, state-to-state restrictions, frequent detentions for checking, poor

infrastructure for drivers, lack of standardisation of storage, handling and transport equip-ment among others. Setting-up of ‘Transport-nagars’, introduction of e-tolling/smart cards, trans-porter registration for stoppage free carriage across state borders, creation of ring roads etc. are the different changes that can bring in efficiencies. I would very much like to see a ‘Ministry of Logistics’ emerge with an overriding char-ter to coordinate and dovetail the initiatives of the ministries of dif-ferent modes of transport from an end user perspective.

How can companies develop an efficient supply chain, while managing current functions?HB: Focus on core competence, select good 3PLs with excellent

supply chain design capabilities, and keep revisiting the design for optimisation. Of course depend-ing on the scale in-house logistics also makes sense. Companies should monetise the different non-monetary benefits they re-ceive from alternative logistics solutions and then make sharper comparisons in making a choice. It is also critical to integrate pro-curement-to-despatch processes. A lot of predictability in terms of timing of logistics needs would result from a superior integration of the functional silos existing in these companies and their break-down for handling logistics would help companies develop efficient supply chains.

Continued from page 24

Deloitte (India) is the official knowledge part-ner to the Logistics & Supply Chain Excellence Conference 2010

28

< news


Railways

Adopt cost-sharing model for Rly projects, States toldHyderabad

The Union Minister for State for Railways, KH Muniyappa

flagged off the Secunderabad-Hazrat Nizamuddin Duranto Express last month. At the event, the minister affirmed that most of the requests made by the state government have been approved, barring the funding for the multi-modal transport system, which is pending. How-ever, an approval for this can be expected in the near future if the state agrees to share costs.

He also mentioned that the minister has requested other states to emulate the Andhra Pradesh model of sharing costs of some of the projects. This, he said, would ensure that long pending projects are completed on time in other states as well, which have otherwise been held up for want of adequate funds. Expounding the example of Andhra Pradesh, he said that it was only when the state agreed

to share costs of projects that it was allocated significantly high-er number of projects. The Rail-ways is exploring more projects under the cost sharing basis.

In the Union railway budget this year, an allocation of Rs 1,124 crore has been made for 12 projects in Andhra Pradesh, thus reflecting a significant jump in allocations. The Railways along with the state will take up survey of more projects and expedite their implementation and also come forward to establish port connectivity to Vodarevu and Ni-zapatnam ports.

Considering the large gap between the demand and avail-ability of funds, the cost sharing projects and projects under the public private partnership (PPP) mode were given top priority, according to the minister.

The approval to establish a wagon manufacturing facil-ity in Hyderabad is significant

for the state. The state has also received all the assurances for necessary support including al-lotment of land for the manu-facturing facility. The Union minister expressed his concern in the delay in implementation of various projects.

In terms of the budget alloca-tions, it is for the first time that a state has secured such a large

share of railway projects. With Andhra Pradesh keen to add more railway lines to the net-work, the state government be-lieves that a railway line holds the key to accelerate development and present business opportuni-ties in places where the line pass-es through. Apart from helping people with connectivity, it will add to trade and commerce.

Sharing resources and and costs can hasten execution of

projects

Freight corridor may have to take route diversionNew Delhi

Indian Railways may have to rework sections of the route

alignment of its Rs 50,800-crore dedicated freight corridor project to avoid acquiring land from those who are not ready to part with it.

This follows the Railway Minister, Mamata Banerjee’s firm stand on not forcibly tak-ing over land from owners.

The Railway Ministry has asked the Dedicated Freight Corridor Corporation (DFCCIL) to re-examine the route for cer-tain sections of land for which

the Section 20E notification has already been issued.

This notification is issued for ‘declaration of acquisition’ by the Union Government under the Indian Railways (Amend-ment) Act 2008. The amend-ment, which gives the Railways special powers to take posses-sion of land, was essentially brought in to hasten the land acquisition process for key projects.

The 20E is an important milestone as it allows the Rail-ways to enter land acquisi-

tion and take steps required to build, maintain and manage the project. The Railways, then, pays compensation to the own-er and closes the deal by taking possession of the land.

For the dedicated freight corridor, the Railways needs to acquire about 11,535 hectares across six-seven states, out of which the 20E notification has already been issued for about 6,000 hectares.

The estimated cost of the freight corridor project has es-calated to about Rs 50,800 crore

according to 2009 prices from the initial estimates of around Rs 22,000 crore few years ago.

Officials are yet to ascertain the extent to which this “re-examination” exercise will hit the project in terms of change in route length and cost.

The dedicated freight lines cover about 3,289 route km on two corridors — Eastern Cor-ridor (1,806 km) from Ludhiana to Dankuni; and Western Corri-dor (1,483 km) from Jawaharlal Nehru Port, Mumbai to Tugh-lakabad/Dadri

HEAD OFFICE: LMJ Complex, 15-B, Hemanta Basu Sarani, Kolkata 700001

Phone: +91-33-3983 9999 / 2231 0950-55 Fax: +91- 33-22312525 E-mail: [email protected]

DELHI: LMJ House, 9 Hanuman Road, Connaught Place, New Delhi 110001Phone: +91-11-2336 7203 / 05 Fax: +91-11-23367206 E-mail: [email protected]

www.lmjlogisticsltd.com

State-of-the-art infrastructure, high quality clientele and a nation-wide pres-ence has made LMJ Logistics a force to reckon with.Our quest to grow and touch the sky has made us to look beyond the horizons and make tomorrow possible today. We focus on enhancing client/ partner’s performance and profi tability through practical, consensus and effi cient logistics services.

Port Operations Mega Food Parks Modern Terminal Markets SEZ & FTWZ Warehouse Management M&C Agents CFS/ICD/EFC 3PL and 4PL

Lmj Lojistics LimitedThinking ahead-Moving forward

30

< news


AIR CARGO

Rlys’ freight revenue upNew Delhi

UK rail sector keen to partner Indian RailwaysKolkata

Aryan Cargo eyes China, HK as first overseas routes Hyderabad

The Railways’ revenues from commodity-wise freight traffic

have increased 8.76 percent at Rs 52,036.85 crore in the April-Feb-ruary 2009-10 period. In the cor-responding period last fiscal, rev-enues stood at Rs 47,846.53 crore.

In the same period, the Rail-ways carried around 803.50 million tonnes of commodity-wise freight traffic, which is an increase of 6.95 percent over the previous year.

From the total earnings of Rs 4,798.13 crore from commodity-wise freight traffic in February, Rs 1,904.60 crore came from transportation of 33.13 million

tonnes of coal, followed by Rs 651.34 crore from transporta-tion of 10.13 million tonnes of iron ore, Rs 463.31 crore from 7.67 mt cement, Rs. 369.95 crore from 3.69 mt foodgrains, Rs 262.82 crore from 3.09 mt petro-leum oil and lubricant (POL).

Moreover, Rs 258.05 crore came from 2.35 mt pig iron and finished steel from steel plants and other points, Rs 222.85 crore from 2.91 mt fertilisers, Rs 83.85 crore from raw material for steel plants except iron ore, Rs 240.12 crore from 2.74 mt container service and Rs 341.24 crore from 5.79 mt of other goods.

Last month, the Federation of Indian Chambers of Com-

merce and Industry - Eastern Region organised an interactive seminar and invited Railway Industry Association (RIA) to become a partner in the Indian Railways’ bid to be a key player in the country’s growth. Tim Gray, International Business Development Director, RIA, led the visiting 10-member delega-tion supported by the UK Trade and Investment.

The UK industry has much to offer as technology and ex-pertise as its strengths and it’s looking for right opportunities.

RIA has 160 firms as mem-bers representing, among oth-ers, passenger train manufac-turers, signalling and telecom firms, track renewal contrac-tors, rolling stock leasing companies, component manu-facturers and consultants and specialist service providers such as asset management and maintenance, R&D, safety and risk, economic planning and

commercial and project man-agement.

The delegation had a meet-ing with the senior officials of Kolkata Metro Rail Corporation.

AP Mishra, general man-ager, South Eastern Railway, told the visiting delegation that PPP (public-private partner-ship) models were receiving a good deal of attention of the Indian Railways in implemen-tation of various projects such as dedicated freight corridor, world-class stations, commer-cial utilisation of surplus lands, setting up of special purpose vehicles and joint ventures for the manufacture of locos, coaches and wagons, operation of container trains, construc-tion of inland container depots and container freight stations, rail side warehouses, infra-structure projects such as port connectivity, freight terminals, logistics parks, doubling and gauge conversion projects and even for hospitality and tourism projects.

Air cargo carrier Aryan Cargo Express (ACE) is

launching its scheduled in-ternational service in mid-April with China and Hong Kong to be its f irst overseas destinations.

The company is in the proc-ess of obtaining slots in eight destination airports initially, including Japan, Thailand, the

UAE and Italy. It expects to get the clearances for China and Hong Kong airports by mid-April, thus enabling them to launch its first scheduled in-ternational service.

ACE, a subsidiary of the New Delhi-based Aryan Car-go Express & Logistics Ltd, has been granted NOC by the Ministry of Civil Aviation to

commence cargo operations from India. Currently operat-ing on some non-scheduled routes, it plans to be a non-integrated carrier of goods providing airport-to-airport freight transportation, serv-ing destinations in Asia, Af-rica and Europe. Initially, the cargo airline will be setting up three hubs in Delhi, the UAE

and Bangkok.The airline will deploy a

fleet of five leased aircraft dur-ing its first year of operation (2010-11), when it expects to notch up cargo revenue of Rs 1,100 crore. It has contracted for lease three Airbus A310-300 from Air India – has al-ready received the first of these, while the second is ex-

The Railways has increased freight of iron ore for ex-

ports by Rs 300 a tonne. The Railway Board has increased the distance-based surcharge on iron ore to be used for other than domestic transportation. The surcharge will now be up from Rs 200 to Rs 500 a tonne irrespective of the distance.

With this hike, the rail freight of one rake of BOX-N wagons, which is generally used to transport bulk ma-terials such as iron ore and coal, will be up by more than Rs 12 lakh. One BOX-N rake comprises 59 wagons and the minimum chargeable rate per wagon is for 67 tonnes.

Rlys hikes freight for ore exportsKolkata

25-27 October 2010Dhahran International Exhibition Center, Dammam, Kingdom of Saudi Arabia

www.sauditranstec.com

ORGANISED BY

SAUDITRANSTEC

IES srl - International Exhibition ServicesZ.I. Settevene - Via Cassia km 36,400 01036 Nepi - (VT) - ItalyTel: +39 0761 527976Fax: +39 0761 527945Email: [email protected]

Dhahran International Exhibitions CompanyP. O. Box 7519 DammamKingdom of Saudi Arabia 31472Tel: +966 3 859 1888Fax: +966 3 859 0212Email: [email protected]

The most comprehensive

TRANSPORTATIONMATERIALS HANDLING

WAREHOUSING& LOGISTICS

exhibition in the region

Officially Supported bythe Ministry of Transport

of the Kingdom of Saudi Arabia

MEDIA PARTNERS

OFFICIAL REGIONAL PUBLICATION

Transtec 206x270 new:206x270 11-03-2010 19:43 Pagina 1

32

< news


pected to join the fleet within a week and the third by April, according to a spokesperson

in the company.In addition to these, the

airline will be taking on lease

two McDonnell Douglas MD-11 aircraft from Boeing Capi-tal, which will join its fleet in June and August this year. While the MD-11s have a cargo carrying capacity of up to 90 tonnes, the A 310s can carry a load of up to 36.5 tonnes. This is sufficient to carry out its first phase of operations. In this phase, it intends to con-nect SAARC with South East Asia, China and West Asia. In the second phase, the connec-tivity will extend to Far East, North Africa and Australia-New Zealand.

The airline is poised to launch international services at a time when cargo traffic is rebounding globally. Going by figures available, the end of 2009 and the beginning of

2010 saw a reasonable upturn in cargo volumes to a level of almost 28 percent higher than the lowest point reached in 2008.

Latest figures released by the International Air Trans-port Association (IATA) show that international cargo de-mand registered a 28.3 percent improvement with only a 3.7 percent increase in capacity in January. This pushed the car-go load factor to 49.6 percent, which is a significant change from the 40.1 percent recorded in January 2009.

The sharp improvement in air freight is being driven by businesses re-stocking deplet-ed inventories. The industry is expected to take delivery of 50 freighters in 2010.

Kolkata airport sees lower cargo importsKolkata

The cargo import trend at the Kolkata airport

has gone downward. The throughput so far in the cur-rent f iscal has been lower by more than 12 percent over the same period of last f iscal. The export during the same period was up marginally, by about f ive percent.

In 2007-08 and 2008-09, the growth in import at the airport was highest in the country, around 30 percent annually. However, the export growth was negligible, pre-sumably because of the ab-sence of export-oriented units in West Bengal.

The total imports between April and February amounted to Rs 15,432 million tonnes (mt), down from 17684 mt in the year ago period.

The total cargo through-put (export plus import) at the airport during the period dropped by 1269 MT from last year’s traffic of 37728 MT.

According to sources, the Airport Authority of India (AAI) cited the lack of indus-trial activities and the overall economic downturn as the reasons for the drop in im-ports. Others say, it could be the levy of high customs duty and ban on import of certain products from China also con-tributed to the drop.

The primary items of im-port this year at the airport were engineering goods and spare parts, particularly for setting up telecom towers, electronic and electrical items and leather goods.

On the export front, how-

ever, segments such as agricul-ture and floriculture are pick-ing up. The utilisation of the capacity of the newly installed perishable cargo unit was how-

ever only 20 percent, while the utilisation of the facilities like Automatic Storage Retrieval System and Elevated Transport Vehicle was up to 40 percent.

A reduction in duties and lifting of bans on certain imports could

help Kolkata airport improve cargo imports

Aryan has finally been given the green signal to fly overseas


< news

Maritime Varsity to come up in ChennaiChennai

500 operational airports to take off by 2020Delhi

The Indian Maritime Univer-sity will create infrastructure

facilities including academic complexes, administrative building, library, hostels and residential accommodation for faculty and staff with the Rs 300 crore allocation received by it from the shipping ministry.

A ‘bhoomi pooja’ was per-formed last month for construc-tion of the university’s academic and administrative complex

buildings at Semmenjeri, near Chennai. Union minister for shipping GK Vasan present at the pooja said the university would be unique in the country and produce ‘high quality’ man-power in the maritime sector not only for India but also for the international requirements.

With Chennai as the head-quarters, the university was es-tablished in November 2008 by an Act of Parliament by integrat-

ing seven government-owned maritime academic institutions.

It is understood that the new academic and administrative complex will come up in a year’s time. Of the 300 acres allotted for the campus, the university will utilise 106 acres and the remaining land would be for a National Maritime Complex.

The complex will be built on public-private-partnership and will have facilities like maritime

museum, international conven-tion centre with 15,000 seating capacity, five star hotel, and a catering college.

The Ministry of Civil Aviation is targeting 500 operational

airports by 2020. The govern-ment expects an investment of around Rs 40,000 crore to be made in the sector till 2014 for airport development and modernisation, according to a report brought out by Ernst & Young and released at the India Aviation 2010.

According to the recom-mendations in the report, state industrial development corporations could be allowed to either establish or take re-sponsibility to upgrade and make operational airfields in close proximity to the indus-trial zone. While the traffic to these airfields initially will be limited to corporate aviation, gradually, each airport could formulate a development plan in concurrence with the state government and the AAI. Rev-enue accrued from corporate airports in the form of landing and park fees may be payable to the corporate with Route Navi-gation Facility Charges (RNFC) being payable to the AAI.

Quick implementationThe report highlights that the global economic crisis also impacted the Indian aviation industry, which negatively hit the revenues of country’s air-ports as the freight and passen-ger traffic declined. This com-pelled the AAI to prioritise the funding of ongoing projects

and defer awarding new con-tracts. Due to decline in real estate prices, private players also had to revise their fund-ing plans and faced a shortfall in funds. The first phase of the

greenfield Bangalore and Hy-derabad airport projects were completed in the first half of 2008, while the modernisation of the Delhi and Mumbai inter-national airports is under way and is scheduled for comple-tion in 2010. The modernisa-tion work at the Chennai and Kolkata airports are expected

to be completed in 2010 and 2011, respectively.

AAI also plans to develop 35 non-metro airports with an ex-pected expenditure of Rs 6,160 crore. In addition to these (35

non-metro airports), an in-vestment of Rs 100 crore annu-ally has also been projected till 2014 for the upgrade, mainte-nance and renovation of civil infrastructure at other non-metro airports. This amounts to an investment of Rs 6,960 crore in non-metro airports, according to the report.

The government is also conducting a study to make operational 32 non-operation-al airports and airstrips in the country. The government is also planning the city-side development of 24 non-metro airports with the involvement of private players.

According to the report, the government is focusing on the development of airports in the North-East as well. A total in-vestment of Rs 6,100 crore is envisaged for the development of three airports in this region. Around Rs 3,500 crore will be invested for the development of Paykong Airport in Sikkim, Rs 1,500 crore for Chiethu Air-port in Nagaland and Rs 1,200 crore for Itanagar Airport.

On a wing and a prayer: The number of aircraft fleet do not

correspond with adequate infrastructure

CORRiGenDUm Kamal Nath’s designation on the cover of LOG.India’s Feb-ruary issue “2010: The decade of infrastructure” should have read Union Minister for Road Transport and Highways. The error is regretted.


< OPINION

Action or Reaction?

34

< OPINION

IIN THE COURSE of my work I have often run into a particular conundrum: should one plan for the rough road ahead or should one tackle problems as they arise? Wherever I go in the industry, I have noted that the management’s approach to running the business relies on fi refi ghting skills rather than good planning or fi xing the root problem. Somehow we have emerged as experts in ‘making do’, of living with constraints and working round them to get results.

Whole organisations seem to promote and reward their executives based on their good fi refi ghting skills rather than their ability to plan the work that needs to be done ahead. To me, it feels that how well you react to a crisis is paid far more attention and given more con-sideration than how well you have planned to prevent problems or how well you have fi xed your problems.

Planning for problemsThere are two reasons why businesses are forced to fi refi ght, fi rstly they don’t plan for

problems and secondly, they don’t fi x the un-foreseen problems they didn’t plan for. The fi rst is by far the commonest and hard-est thing to do. When one is crushed by stiff timelines it is hard enough to plan for likely scenarios; trying to plan for unlikely scenar-ios seems like a luxury we cannot afford. Yet we must. One of the noteworthy characteris-tics of logistics operations – especially in our country which is rapidly changing and grow-ing – is the quality of the contingency plans. Let me show you why.

At one site we visited, the performance of the warehouse was limited due to the re-sponse time of the computer system. The fa-cility’s throughput had increased 50 percent in two years, but the computer hardware had been programmed for a marginal 10 percent growth. Consequently, the pickers stood around and waited in between picks because no one ever thought the company would ever be so successful! Now money is tight and the business just suffers excessive operational costs if it is unable to cough up the additional

PADMINI PAGADALA General Manager, TPG Consulting, Mumbai

Most companies do not plan for contingencies and thus get sidetracked into fi refi ghting instead of looking at the real issues, notes Padmini Pagadala


capital needed to replace the computer which could have been easily upgraded when it was originally purchased. So the cost of fulfillment remains high.

At another warehouse the aisles, the offices and every nook and cranny in the building had products stuffed into it. When we enquired the reason for the untidy ac-cumulation of goods, the managers indicated that the stores set up to receive the products had not yet opened. No one had thought about developing a contingency plan and in India when things go wrong, we take too long to rectify the messy situation, so the cost of fulfill-ment remains high.

This is evident in most businesses in the country and these problems continue only because most of us get ac-cess to the huge sums of money needed to design these networks and buildings just ONCE, and if we don’t plan well it is very difficult to go back and get money later to paper over our mistakes.

The better performing businesses will not fall into this trap. This reminds me of a conversation I once had with the trusted aide of a top retail tycoon who has now made forays into many businesses. He told me, “I want you to ‘future proof’ my buildings.” So should we all!

Quick fixesRecently, I heard of a facility that had received huge or-ders from the market. They thought they were so hard pressed that they merely focused on shipping the orders out. Each day the shipping time would stretch much be-yond all deadlines. They were so busy getting orders out that they forgot to fix the fundamental problem. Their warehouse remained unslotted! Every day the pickers would travel to the most inconvenient locations to get the most popular products. So caught up were they in this, that in their minds, time did not allow them to re-slot the warehouse. They were merely working round the problem instead of fixing the root cause of the problem.

The Japanese automotive industry provides one of the finest examples of how problems should be attended to. In Toyota’s assembly line if there is a problem, the work-ers stop the entire line. In Japan, a problem on the line results in an incredible flurry of activity. The line work-ers, the production management and the engineers all get together to assess and then resolve the problem. If the problem is a quality issue, then the line remains down till the issue is resolved. With this approach to problem solving, is it any surprise that the Japanese car quality is the gold standard that other competitors are trying to achieve?

If you are so busy tackling a problem and ‘making do’ or working around the problem, success starts getting

defined as ‘making it through the day’. Then when will you start planning improvements and enhancements?

If you are going to continue merely working around problems, you will accept these as the cost of doing busi-ness and your friends will sorely miss you at the club on weekends. If you are interested in improving perform-ance and having a life, you will take process improve-ment seriously and seek the root cause for these varia-tions and ensure they are not repeated.

Is firefighting not a skill?While I am NOT undermining the importance of firefighting or your ability to resolve a crisis, my point is that firefighting in itself should not obscure the need to fix the root cause of problems as we find them and— better still—the need to plan in advance for the expected and the unexpected as well. Take the example of our late night workers in the unslotted warehouse– what was required was extra work for a day to re-slot their products rather than firefight every day.

While talking about firefighting, an industry col-league argues that “we are a developing nation and sales are as unpredictable as the first rains. If we were to sud-denly grow 30 percent overnight, I will break my back to support it.” While I do agree that the customer is king and that demands have to be met, my point is that we can do things differently. So here’s my advice:n Plan for contingencies. Things go wrong all the time.

Have a plan B. n Log exceptions when they occur and try to find out their

root cause. Working beyond the scheduled hours must be an exception. We need to be honest with the log.

n Do NOT take advantage of loyal employees who will jump through hoops to maintain the budget or sched-ule. How long is it going to take to find willing and capable replacements?

n Invest in people /processes even if it doesn’t reduce labour. It will make your labour more content to work for you.

n Keep digging to find the root of a problem. n Think about how much you are limiting your growth

potential with the current emotional, physical and energy constraints. While we may be excellent firefighters and really hard

workers, it doesn’t mean that we shouldn’t plan ahead. We need to set goals, to be proactive and consistent. There may be a lot lost while we get comfortable in being just firefighters. Prevention and proactive planning must be treated more importantly than our ability to firefight.

35

The author can be reached at [email protected].

DIESL has grown at 100 percent, according to the company, at a time when the rest of industry has clocked 12 percent. Company CEO, Ajay Chopra, lets us in on the secret.By Pamela Cheema

< Cover Story

INDIA| April 2010 | www.log-india.com36

Ajay Chopra exudes quiet con-fi dence in his vibrant and well-appointed offi ce. The

CEO of Drive India Enterprise Solu-tions Limited is in a genial and ex-pansive mood as he maps the growth of his company. With complete self-assurance, he weaves together and presents the different elements that contributed to the success of his company and made it the lucrative enterprise that it is today.

Despite an economic free-fall globally due to one the worst reces-sions in recent times, DIESL has grown at the astonishing rate of 100 percent in the last three years, while the organised sector of the logistics industry has grown at 12 percent. With suffi cient candour, Chopra traces DIESL’s success to “having most things mapped out, know-ing our milestones and playing our cards well.”

On being quizzed about the phe-nomenal growth rate, he reveals that his “competitors focused on as-set creation and thus became asset heavy, while we remained asset light because we structured everything in keeping with a shaky economy. This gave us energy and nimbleness. We are also attached to the telecom, retail, chemical and plastics indus-tries which are growing fast and that helped us to grow fast too.”

New avatarDIESL was incorporated as DriveIn-dia.com Limited in December 2000. Thereafter the company handled the e-commerce business of Tata Inter-active Systems. In April 2007, the company which had already entered the logistics sector, switched to its present name.

With its stellar performance in the Indian logistics sector, DIESL is

FULL Steam

AJAY CHOPRA,CEO, Drive India Enterprise Solutions Limited

We are constantly adding to our growth with interests in areas like telecom and retail and all this contributes to our 100 percent growth

Photos: Krishanu Chatterjee

We are constantly adding to our growth with interests in areas like telecom and retail and all this contributes to our 100 percent growth


< Cover Story

crystallised, the company could have a business presence in various countries beginning with South Af-rica and swinging upwards in a wide arc through the African continent, barring nations which are conven-tionally considered high-risk.

Despite its growth, DIESL plans to stay the course as an asset light company with no investment in brick and mortar properties, but offering excellent services to its cli-ents. Tata Realty and Infrastructure Ltd (TRIL), the infrastructure arm of the Tata Group, may invest in nu-merous logistics parks across the country “and we may use their facili-ties, but we are clear that our busi-ness model will remain the same, no building of properties, with only an offer of excellent services to our cus-tomers,” says Chopra firmly.

establishing agri-parksWith an eye on the latent and un-tapped potential of the country’s ru-ral markets, DIESL is planning agri-parks to cater to this sector. Since

agriculture and allied services con-tribute 17 percent to the country’s GDP, the nascent rural sector con-tains the seeds of explosive growth. While the major Indian metros have always been on the radar of econo-mists, the rural areas have been largely ignored. “What is actually required is bringing together people who deal in seeds, fertilizers, chem-icals, tractors, water pumps and their spare parts, in short, anything required by the rural sector,” says Chopra enthusiastically. “In fact, one could create an entire logistics sector which could cater to the rural areas and this would lead to econo-mies of scale.”

For the last six months the cor-porate has been discussing these proposals with various constituents and has received an encouraging re-sponse. The company has planned four agri-parks; two such facilities will be established in the north and south of the country in the first two quarters of 2010, while the remain-ing facilities will be established later in the eastern and western parts of the country.

However, the concept of bulk lo-gistics receives a cold shower from Chopra. “We are only interested in a single window to the farmer,” he emphasises, “and maybe this could be a natural progression to agri-warehouses, to things that farmers need, not produce.”

Mature LSPAs DIESL matures slowly, but surely as an LSP, it is acquiring an enviable list of customers from the clutter of road companies and MNCs (some of whom have a worldwide presence) within the country. “Some of our cli-ents have never believed in outsourc-ing, but they are now giving us their custom,” says Chopra with pride. “After their entrée, the rest of the in-dustry will just follow suit.”

However, despite being a Tata company, DIESL does not have ex-

now eyeing the international mar-ket in what may well be a reprise of its superb record in the domestic logistics segment. Though the cor-porate remains intensely focused on the newly resurgent Indian market, it is assessing and quietly formu-lating plans to make forays into the international market. “We are thinking of the Asia-Pacific region which could be our biggest gateway after India,” ruminates Chopra, toy-ing playfully with one of the pens on his desk, “as well as Africa, where the Tatas have a presence in au-tos, mines, minerals and telecom.” Though DIESL’s plans have not yet

xxx xxxxxxx

though the corporate remains intensely focused on the Indian market, it is formulating plans to make forays into the international market

Goods stored at the DIESL warehouse, Bangalore

Photo: R

amlath K

avil


< Cover Story

clusive rights as a logistics service provider to cater to other corpo-rates in the Tata Group like Tata Motors or Tata Chemicals. Accord-ing to sources in the Tata Group, in keeping with the group’s principles of maintaining professional ex-cellence, DIESL has to leverage its skills and raise it to a new bar to be continually present on the list of major LSPs which service vari-ous group companies. “We are a very young company, just about six or seven years in the industry,” says Chopra. “Group companies like Tata Motors and Tata Steel have huge expectations. Of course, we are constantly adding to our growth with interests in areas like telecom

and retail and all this contributes to our 100 percent growth.”

Finessing of skillsSteady growth requires finessing of skills. Indian logistics consists largely of manual operations, with less than optimum automated solu-tions. In an effort to impart global standards to its deliverables, DIESL is restructuring its services in ware-housing and value-added services to offer international solutions. The corporate will offer ‘track and trace’ solutions as well as seam-less integration from the pick-up point to delivery. To strengthen its services, DIESL has established its distribution wing, Connect, which

spans 4,000 cities and safely deliv-ers goods in more than 85 percent of the country’s districts. “In the next one year we aim to deliver goods in 100 percent of the coun-try’s districts,” says Chopra with quiet determination.

The company has established storage and distribution centres in every state from Srinagar to Kochi and Gujarat to the north-east and the Connect brand aids in distribution to facilities in these multifarious states.

Needed, benchmarksBut despite transformational ad-vances, quality is not on tap in the Indian logistics industry. Reality gives a hard knock to the high ideas

The DIESL warehouse at Bangalore


and principles often articulated privately and at seminars within the industry. Chopra who refuses to dress up facts, agrees that no benchmarks exist within the in-dustry. To institute benchmarks both within the company and the industry and rescue the logistics business from its own mediocrity, three or four years ago DIESL cre-ated Project Caliper which is a qual-ity programme run by its Business Excellence Team.

“We want to be trail blazers and are looking for industrial bench-marks, even international stand-ards, against which we can com-pete, especially in receipting and order fulfilling,” explains Chopra.

The programme enables DIESL to assess the performance of its ware-houses across the country through a unique quality audit module which comprises of 156 questions. The module has been devised to ensure minimum error and appears to have achieved its goal of excellence in performance, for DIESL today is an ISO 9000-2001 certified company. “We got the certification in just a year which is a record,” says Chopra proudly. “Most LSPs don’t even ask for certification, but we tried hard to get it because we wanted to prove our worth to ourselves.”

Social responsibilityThe corporate’s areas of interest have expanded to include specific commitments in the sphere of cor-porate social responsibility like healthcare, education, employment opportunities for its workers, re-

A lesser known fact about the compa-ny is that in keeping with the spirit of

the Tata group, it has been involved with a number of Corporate Social Respon-sibility (CSR) activities for long. Here are some of the notable initiatives:

Humanitarian logistics: Humanitarian logistics pertains to organising delivery and warehousing of supplies during natural disasters or complex emergen-cies to the affected area and people. DIESL is doing the following things in this area:a. The company has partnered with Tata

Institute of Social Sciences (TISS) to conduct training and courses in Dis-aster Management Logistics for their citizen volunteers. As a part of this project, employees of DIESL develop the course material, audio visual aids, and presentations and form the core faculty of the program.

b. DIESL is putting operational plans and networks in place, which will be set in motion during disasters.

Community development programs for truck drivers: The company has

taken up the cause of health, hygiene and awareness among truck drivers. From its 176 warehouses across India, the company runs ‘Community Labs’ where it imparts training to truck drivers. These labs are equipped with audio-vis-ual equipment, where every truck driver associated with DIESL in the area has to mandatorily participate in awareness programs for AIDS, other STDs, road safety, and traffic regulations.

Education: Through a not-for-profit organization called the Akanksha Foundation, DIESL is currently enabling education for over 3,000 children at 62 centers, 4 kindergarten centers and two schools.

Plant a sapling program (PASP): In one of this program’s initiatives, DIESL planted and distributed 2,400 free saplings to people in and around its corporate and regional offices and ware-houses on January 26, 2010. As part of its ‘environment sustainability’ activities, the company is also involved in rain water harvesting.

CSR: What DIESL is up to

ducing carbon emissions and disas-ter logistics.

At a health camp at Bhiwandi, near Mumbai, the company invited pack-ers from every industrial unit in the area to attend the camp. In the newly emerging field of disaster logistics, the company is exploring options of collaborating with experts who are adept at disaster recovery. Even more importantly, DIESL supported the launch of the India International Lo-gistics Forum which was established recently to resolve the challenges fac-ing the logistics industry.

Just ascending the development curve is not enough. Corporates like DIESL have realised that once a business is on the fast track, companies must pool their stellar knowledge resources, strengthen the logistics industry, indeed even society at large, and together cata-lyse its growth.

Photo: Ramlath Kavil


< EVENT REPORT

Mergers and Acquisitions Spur IndustryThe Supply Chain Leadership Council organised an informative summit on the increasing mergers and acquisitions in the industry writes Pamela Cheema

Date : March 4, 2010Event: Private equity, mergers and acquisitions in logistics Organiser: Supply Chain Leadership Council Location: Regus Business Centre, Bandra-Kurla Complex, Mumbai


The Supply Chain Leadership Council organised a summit on ‘Private equity, mergers &

acquisitions in logistics’ on March 4 at Mumbai. The summit was a forum for a debate on the future of private equity investments in the logistics sector in India and the nu-merous mergers and acquisitions that are expected in this sector in the near future.

Over a 100 private equity inves-tors, logistics companies’ promot-ers, CEOs, investment bankers and dealmakers attended the confer-ence. The speakers at the conference included Manish Saigal, executive director and head of transporta-tion and logistics, KPMG, Dinesh Tiwari, executive director, JP Mor-gan, Chetan Dikshit, director, Roth-schild, Sumir Chadha, MD, Sequoia Capital, Vishal Sharma, MD and CEO, Tuscan Ventures, Rahul Shah, partner & director, Investments, Aditya Birla Private Equity, K Muku-ndan, director, UTI Infrastructure PE fund, Prasad Gadkari, principal, IDFC PE, Vikram Utam Singh, ex-ecutive director and head, markets and private equity, KPMG, Ashit Desai, executive director, AllCargo, Shankar Chatterjee, MD, (India and south Asia), Bertling Logistics, Ajit Jangle, MD and CEO, Toll Logistics

India, Puneet Agrawal, director, Delhi Assam Roadways and Gau-tam Dembla, director (operations), Spear Logistics.

Rich pickings in industryMergers and acquisitions have been sparked off globally by Warren Buf-fet’s November 2009 $26 billion acquisition of the Texas based rail road company, Burlington North-ern Santa Fe. After this acquisition Buffet declared, “Transportation is fundamental. And there’s a lot of money to be made.” Worldwide, in-vestors are now emulating Buffet’s example and eyeing rich pickings in the logistics sector. Since 2005, the transportation industry has wit-nessed innumerable mergers and acquisitions totaling $79 billion. According to Prequin, a consultan-cy for alternative investments , 258 firms or about 5 percent of corpo-rates globally, have evinced an inter-est in the logistics sector.

Industry sources believe that mergers and acquisitions are slowly increasing in India and are expected to grow significantly towards the end of the year. VCCircle points out that January 2010 saw as many as 29 domestic deals worth $2303 million as compared to 14 transac-tions worth $589 million in January

2009. The sectors most favoured by investors are telecom, logistics, insurance, banking and finance. Manish Saigal, executive director and head-transportation and logis-tics, KPMG, India, mentioned at the summit that although “growth will not touch 2007 levels, it will certain-ly approach it.”

The logistics sector embraces many sub-sectors like shipping, ports, warehousing, express cou-rier and supply chain consulting. These diverse sectors have their own growth and profitability levels. The industry is highly fragmented, with just a few players controlling more than 10 percent of the market. Dur-ing the recession which has singed most players globally, industry has realised that the only way to survive is to be profitable and grow.

Market resurgenceIn his presentation, Saigal of KPMG pointed out that “there is resur-

The supply chain industry is broken up among various intermediaries. There has been consolidation among freight forwarders and shipping lines and this has created a power imbalance for the intermediaries

— Ashit Desaiexecutive director,

AllCargo Global Logistics

(L to R) Dinesh Tiwari, executive director - JP Morgan PE, Vishal Sharma, MD & CEO - Tuscan Ventures, Manish Saigal, executive director and head – transportation & logistics, KPMG


< EVENT REPORT

gence in domestic sectors like retail and manufacturing which is driv-ing volume growth again. EXIM is estimated to grow at 15 percent per annum, while private investments are expected to drive modern ware-housing, better transportation and technology adoption. The regula-tory changes that the government is making, like GST, which will be introduced soon and government incentives to infrastructure devel-opers like tax breaks and incentives are driving private participation, ef-ficiency and improvement.” Saigal remarked that the government’s spending on infrastructure is sig-nificant as in the “11th Five Year Plan Rs 14,000 billion is earmarked for investment in this sector. Of this, 27 percent or Rs 3750 billion is ear-marked for development in roads, rail, aviation and port projects.”

He also noted that mergers and acquisitions were occurring in cer-tain sectors in the logistics industry like shipyards, cold chains, freight forwarding, shipping, warehousing, ports and transportation.

Increasing mergers and acquisitionsAshit Desai, executive director, AllCargo Global, dispensed good advice both about mergers and ac-quisitions and private equity in the industry. He disclosed that his company was a global logistics service provider with business ver-ticals which include containerised cargo consolidation, container freight stations and warehousing. The company has 126 offices in 58 countries and employs 632 people in India and 1647 employees abroad. Giving an overview of the industry, Desai emphasised that the “supply chain industry is broken up among various intermediaries. There has been consolidation among freight forwarders and shipping lines and this has created a power imbalance for the intermediaries.”

Due to fragmentation, many in-termediaries are left with few choic-es, either buy and consolidate or be bought out by other companies. De-sai cautioned that if you are buying other companies “you must buy only

at an acceptable price, be prepared to walk away from the deal, buy at the right time and court for a long time if required.”

Ajit Jangle, managing director of Toll Global Logistics (India) which has acquired more than 50 com-panies in a span of a few years re-marked that his company was keen on acquiring numerous logistics companies in India “provided the fit and price is right.”

Vishal Sharma, MD and CEO, Tuscan Ventures, presented a lucid picture of the changing fundamen-tals of private equity globally. He described a new business environ-ment where investment models “will increasingly lean towards performance based valuations and structures that will give funds sev-eral options to cut losses at every stage of an investment.”According to him, new models of investment will emerge where investors will be able to manage execution as well as risk. In his view, large sector ag-nostic funds will increasingly invest with smaller sector funds to be able to control their exposures.

Why merge and acquireWhat makes companies merge and acquire? Shankar Chatterjee, MD (India and south Asia), Bertling Lo-gistics, tried to answer this question in a candid and expansive presenta-tion. He stated bluntly that mergers and acquisitions especially in third world countries were done to acquire more money “because companies simply need money to grow.”After mergers, companies also absorbed best managerial practices along with global reach. However, mergers faced many challenges, among them foreign investments and remittance laws, unfriendly government at-titudes to foreign investors, rigid customs laws and difficulties in the transfer of human capital.

But Chatterjee stated firmly that mergers and acquisitions were ben-

Industry stalwarts discussing M&A – (L to R) – Gautam Dembla, director (operations) - Spear Logistics; Ajit Jangle, MD & CEO - Toll Global Logistics; Prasad Gadkari, principal – IDFC PE; Puneet Agarwal, director, Delhi Assam Roadways; Rahul Shah, partner & director (investments), Aditya Birla PE; and Sankalpa Bhattacharjya, associate director, KPMG


< EVENT REPORT

Only three out of 100 deals are successfully concluded in the industry

— Vikram Utam Singhexecutive director and head –

PE & Markets, KPMG

eficial for Indian companies as it brought India closer to the world, created a brand with a global or lo-cal partner and reflected a paradigm shift from an ownership driven company to a professional company. It also offered diverse and better ca-reer opportunities in the country.

Strategies for successChetan Dikshit, director, Roth-schild, presented a lucid paper both on the key drivers of growth in the Indian economy and a segmental analysis of strategies of success in warehouse services, logistics parks, trucking and container rails. He was optimistic about the growth of the GDP, emphasising that long term macro forecasts remained un-altered and that growth rates for the period up to 2020 would remain 8 percent per annum.

While offering strategies for success in warehouse services and logistics parks, he pointed out that “a company must acquire land at op-timum distance from the highway to reduce acquisition and expand service offerings beyond freight forwarding, for example, short-haul trailer connectivity. One should also focus on building relationships with key industries like electronics,

IT, telecom and auto component manufacturers.” He also suggested that these services establish an an-chor client base with corporates like banks and telecom companies and also build networks through fran-chisee models.

Dikshit believed that trucking and container rails could focus on con-tract logistics and exploit profitable short/medium haulage routes. He

also opined that a dedicated freight corridor should be built, contain-erisation should be increased and rail operations should be integrated with logistics services like terminals, trucks and warehousing.

Another speaker from KPMG, Vikram Utam Singh, executive direc-tor and head, markets and private eq-uity, cautioned the logistics industry to check their PE readiness before sealing a deal. He disclosed that only three out of 100 deals are successfully concluded in the industry. He advised the industry to check key criteria like scale, management bandwidth, transparency and exit potential be-fore investing in private equity.

Growing challengesThe director of UTI Infrastructure PE fund, K Mukundan, also spoke of the challenges that the industry has to surmount to grow. Discuss-ing the vulnerabilities of the logis-tics industry, he indicated, among other things, its weak last mile con-nectivity and limited access to capi-tal which has stunted its growth. “Companies should try to gain scale through mergers, acquisitions and JVs with other players. They should also aim at backward and forward integration,” said Mukundan.

He also discussed emerging trends in the industry where inte-grated players with a presence in the core services of warehousing, CFS/ICD, port services and container logistics would benefit the most as the logistics industry consolidates. He noted with approval the huge investments the industry is making in technology, web based tools and the development of multi-modal lo-gistics parks near DFCs. He was also optimistic about the potential of the logistics industry in the near future.

While the crippling recession ap-peared to have retarded industry’s growth to a significant extent, the mood at the logistics summit was pos-itive and full of hope for the future. One of the participants at the summit

www.iactglobal.in

DVV Media India Pvt. Ltd., 9, Ground Floor, Sona Udyog, Parsi Panchayat Road, (Old Nagardas Road), Andheri (East),

Mumbai - 400 069 INDIA Ph:+91-22-2824 0198 / 2837 5323 Fax : +91-22-2836 0143 Email: [email protected]

Yes , I am interested in the special offer.

Account Transfer: Remittance should be made to: 1.Beneficiary Account Name & Account No

DVV Media India Private Limited/0561084-00-0 2. Swift No. : DEUTINBBXXX 3. I Ban No. : De84500700100953478500

4. Information / proof of transfer with swift message copy should be mailed / faxed to 'DVV Media India Private Limited'.

Full Name : .................................................................................Designation: ............................................................................

Company Name : ........................................................................ Industry: ..................................................................................

Address : .................................................................................... City: ................................................................................

Pin Code : ........................................ State : .......................................................... Country : .........................................................

Fax : ......................................................................................... Telephone : ................................................................................

Email : ...................................................................................... Mobile : ................................................................................

Drawn on (Bank) : .................................................................................... DD / Chq. No. : ..........................................................

in favour of ‘DVV Media India Private Limited’. for Rs. : ...................................... Dated : ..........................................................

www.log-india.com www.iactglobal.in

Details of the Bundled offer MRP Special Price of

Bundled offerIACT e-learning and certification program

3 year subscription of Log-India

Total cost of bundled offer

INR 10,000

INR 3,600

INR 13,600

INR 5,000

You Save

63%You Save

63%

Mumbai:93257 10005 Chennai:93674 70005 Kolkata:93782 70005 Hyderabad:93944 70005 Bangalore:93798 10005

New Delhi:96544 49005,For details contact IACT Global

View demo at www.iactglobal.in/scm.htmlOR DVV Media India Pvt. Ltd. Ph:+91-22-2824 0198 / 2837 5323

1. Logistics & SCM models

2. Demand forecasting

3. Inventory management

4. Supply planning & MRP, DRP

& JIT concepts

5. Transportation &

warehousing

6. Procurement & purchasing

7. Technology in SCM

8. Practical tips in logistics

IACT Certification in SCM

+

DVV Media India Pvt Ltd. &

(IACT is a Leading Global Player in Professional Training & Certification)

International Academy for Certification & TrainingSPECIAL OFFER

From

Subscription IACT Certification & Training Other Courses Available in this Offer

1.MRP 2.PPC

4.Warehouse Management

3.Purchasing

INDIA


< industry update


Corridor of ChangeThe Dedicated Freight Corridor will lead to a spurt in industrial growth writes Frewin Francis

The Dedicated Freight Corridor is our prime minister's dream

project. I am concerned about the pace of progress and DFCCIL will be revamped within a short span

of time to ensure timely implementation of the project. We will implement it in time."

—Mamata Banerjee, Indian Railway Budget speech,

February 24, 2010

48


On February 24th, 2010 the railway minister, Mamata Banerjee, presented the

railway budget and announced that an energetic and accelerated ap-proach was required for the Dedi-cated Freight Corridor (DFC) which is planned in the country. The Freight Corridor is planned on the north-south, east-west, east-south and south-south corridors along with a Golden Rail Corridor with high-speed passenger lines.

Pointing out the shortage of wagons during the railway budget presentation, the railway minister has now set a target of procuring 18,000 new wagons in the FY 2010-11. This new development ought to interest firms like Alstom, Bombar-dier Transportation, Siemens Rail-ways, Titagarh Wagons, Texmaco and BEML.

days and a special task force would be set up for clearing all investment proposals to speed up implementa-tion of projects. The private sector has also been urged to invest in projects ranging from multi-level parking facilities, multi–modal logistics parks, auto hubs, high-speed train corridors and rolling stock units.

Generous budgetary allocationThe finance minister, Pranab Mukherjee, while presenting the fi-nance budget allocated 46 per cent of the total plan outlay or a gener-

ous share of Rs.1.73 lakh crore, to the infrastructure sector which includes roads, ports, airports and railways in 2010-11. This, in turn, should ease the setbacks suffered by the Dedicated Freight Corridor Corporation of India to a consider-able extent.

With a major portion of the Delhi-Mumbai Industrial Corridor (DMIC) passing through Gujarat, there is a need for the construc-tion, upgrading and doubling of the spurs connecting the Dedicated Freight Corridor with the ports and industries of Gujarat.

According to sources in the rail-way ministry, goods traffic has been the mainstay and has also filled the coffers of the Indian railways. About 80 per cent of the railways’ revenue originates from freight traffic alone. The railways have registered a substantial increase

proposals for ppp would be cleared within 100 days and a special task force would be set up for clearing all investment proposals

Dedicated western corridor

planning the CorridorThe railway budget for 2010-2011 also announced that 10 new auto ancillary units would be set up and 80,000 new wagons would be re-quired when the ministry achieved its target of laying 25,000kms of railway lines in the next ten years. All this would be accomplished along with the establishment of door-to-door freight services and the promulgation of the Golden and the Western rail corridor serv-ices. In addition, 15,000 kilometres of optical fibre cables (OFC) will be laid through public private partner-ship (PPP) to cover the entire rail-way network.

While presenting the budget, the minister also announced that pro-posals for public-private partner-ships would be cleared within 100

Sou

rce:

dfc

cil.o

rg


< industry update

tion of the existing trunk routes of Howrah-Delhi on the eastern corridor and Mumbai-Delhi on the western corridor. With utilisation levels of 115 percent-150 percent, the Dedicated Freight Corridor was considered necessary and hence it is being developed in phases. The eastern and western corridors are being developed as phase Ia, Ib and II and phase I, II and III respective-ly. Both corridors are expected to be fully functional along the entire planned length by 2017.

state-of-the-art technologyThe DFC will have state-of-the-art construction technology, upgraded transport systems and a substan-tial increase in wagon axle load to achieve significant reduction in unit cost of rail transport. Volume and speed will be achieved by vir-tue of the DFC being dedicated to freight trains.

The Dedicated Freight Corri-dor Corporation of India Limited (DFCCIL) has been mandated to develop multi-modal logistics parks at four locations, namely Rewari, Ahmedabad, Kanpur and

Navi Mumbai subject to viabil-ity. The Container Corporation of India (CONCOR), a public sector undertaking under the ministry of railways, also has plans to estab-lish multi-modal logistics parks at several locations depending on business requirements.

When established, the eastern corridor of the DFC will cater to a number of requirements such as coal for the power plants in the northern region of U.P., Delhi, Har-yana, Punjab and parts of Rajas-than. The freight corridor will also carry finished steel, food grain, ce-ment, fertilisers, general goods and limestone from Rajasthan to steel plants in the east.

Presently, most of the traffic on the western corridor comprises of containers from JNPT and Mumbai Port in Maharashtra and ports of Pipavav, Mundra and Kandla in Gu-jarat destined for inland container depots located in northern India, es-pecially at Tughlakabad, Dadri and Dandharikalan. Besides containers, other commodities moving on the western freight corridor are petrol oil lubricants, fertilizers, foodgrain, salt, coal, iron steel and cement.

xxx xxxxxxx

in the goods loading segment and the construction of the Dedicated Freight Corridor will vastly expand the market of the railways with more goods being carried across the country.

Setting up of freight terminals by the Indian railways is an ongoing process which is dependent on traf-fic requirements. Discussions have been held with concerned state gov-ernments for the development of multi-modal logistics parks along-side the Dedicated Freight Corridor and at strategic locations under the public-private-partnership mode.

the visionThe Dedicated Freight Corridor Corporation of India Limited (DFC-CIL) was formed as a registered company under the administrative control of the ministry of railways on October 26, 2006. The initiative was conceptualized and announced by Lalu Prasad Yadav, the then rail-way minister, in his budget speech in February 2006. The objective to develop dedicated freight corri-dors across the country defines an important point for the Indian rail-ways that runs mixed traffic across its wide network.

The necessity for freight corri-dors arose due to over- saturation and excessive line capacity utilisa-

Dedicated eastern corridorthe dFC will have state-of-the-art construction technology, upgraded transport systems and a substantial increase in wagon axle load to achieve significant reduction in unit cost of rail transport

Source: d

fccil.org


Linking commercial activityThe Eastern Corridor will traverse 6 states and include a double-line electrified traction corridor from Sonnagar on the east central rail-way to Khurja on the north-central railway (820 Km), Khurja to Dadri on the NCR double-line electrified corridor (46 Km) and single-electri-fied line from Khurja to Ludhiana (412 Km) on the northern railway. The total length works out to 1279 Km.

Due to unavailability of space along the existing corridor, par-ticularly near important city cent-ers and industrial townships, the alignment of the corridor may take a detour to bypass Mughalsarai, Al-lahabad, Kanpur, Etawah, Tundla, Hathras, Aligarh, Hapur, Meerut, Saharanpur, Ambala, Rajpura, Sirhind, Doraha and Sanehwal.

Since the origin and destina-tions of traff ic do not necessar-ily fall on the DFC, a number of junction arrangements have been planned to transfer traff ic from the existing Indian railway corri-dor to the DFC and vice versa. The junctions on the Eastern Corridor are planned at Sonnagar, Gan-jkhwaja, Mughalsarai, Jeonathpur, Naini/Cheoki, Prempur, Bhau-pur, Tundla, Daudkhan, Khurja, Kalanaur, Rajpura, Sirhind and Dhandarikalan.

The Western Corridor will cover a distance of 1483 km of double-line electric (2 X 25 KV) track from JNPT to Dadri via Vadodara-Ahmedabad-Palanpur-Phulera-Rewari. In ad-dition, a single-line connection of 32km from Pirthala junction station (near Asaoti on the Delhi-Mathura line) to Tughlakabad is also proposed to be provided. Alignment has been kept parallel to existing lines, except that a pro-vision of detour has been made at Diva, Surat, Ankleshwar, Bharuch, Vadodara, Anand, Ahmedabad, Pal-anpur, Phulera and Rewari. There

will also be a short section inter-linking the two corridors at Dadri.

Cost and land acquisition overrunsHowever, the freight corridor project has faced it own share of problems with a cost blow-out and delays due to land acquisition. For the dedicated freight corridor, the railways need to acquire about 11,535 hectares across six or seven states. But the government has not yet acquired most of this land, al-though a 20E notification has been issued for the acquisition of 6,000 hectares in the first phase.

The Indian railways has ap-proached the World Bank for fi-nancing 725 km of the Mughal-sarai-Khurja portion of the eastern corridor and Asian Development Bank for 426 km of the Khurja-Ludhiana portion. Meanwhile, the western corridor of the Dedicated Freight Corridor will be funded in cooperation with the Japan Interna-tional Cooperation Agency (JICA).

symbiotic relationshipThe freight corridor has huge com-mercial advantages for the country. In Punjab and Haryana, manu-facturers of steel, leather, sports goods, utensils, textiles, cycles, automobile ancillaries, tractor manufacturers and the agriculture sector will be benefitted most by this project.

The proposed eastern corridor of the DFC will be advantageous to the business communities of West Bengal, Jharkhand, Bihar and Pun-jab since goods would be carried to their destination on a priority basis. Moreover goods trains are expected to run at 100 kmph on this corridor. Also, iron, coal, cement and other minerals will be sent on this cor-ridor from Jharkhand, Bihar and West Bengal to other parts of the country. Similarly, these states re-ceive a large part of their products from Punjab and Haryana to cater to the needs of the resident busi-ness community.

The freight corridors will also encourage the development of spe-cial economic zones (SEZs) along its path. With SEZs in India being offered tax rebates, fiscal incentives and land at subsidised rates. The freight corridors will greatly boost industrialisation and economic growth. Also the SEZs will promote investment from domestic and for-eign sources.

The Dedicated Freight Corri-dor has a bright future in India. Not only will it aid in the speedy transport of food and goods right through the country, it will also be a catalyst for industrial growth in the form of logistics parks and industrial corridors which will be established along the length of the corridor, thus leading to a spurt in India’s industrial growth.

the freight corridors will encourage the development of seZs along its path. seZs are being offered tax rebates, fiscal incentives and land at subsidised rates. the freight corridors will greatly boost industrialisation and economic growth

< Special report

INDIA| April 2010 | www.log-india.com52


Last Among EqualsPrivate ports have added to the significant growth of traffic movement over the years, and are growing at a healthy growth rate of 26.4 percent despite the recession and red tape, reports Jayashree Mendes and Frewin Francis

Photo: Ramlath Kavil


< Special report

Industrial licensing was done away with thus making it possible for individual states to attract busi-ness and investments through new policies. The economic policies of 1991 also allowed businesses to go to states of their choice.

In 1992, the Pipavav port was the f irst private port to take shape in India. Since then there has been no looking back. Development of ports have been rapid across India thus taking the total to 187 mi-nor ports, of which 10 are private ports. Moreover, with global trade volumes growing, the growing multi-polarity of trade f lows was expected to impact world shipping as profoundly as liner shipping and containerised cargo had done almost f ive decades ago.

against all oddsWhile it is only since 1998 that the government has realised the importance of developing private ports, they need to offer a clear logistics advantage in terms of ac-cess to hinterland, rail-road con-nectivity, and facilities for cargo.

Despite a line-up of investors who are keen to enter this infras-

truture arena, investors in private ports still have to bear the brunt of unexpected delays in approv-als and availability and quality of infrastructure, say port consult-ants. “The development of the Pipavav port was a signal for other investors to consider investing in private ports infrastructure. But even after all these years, notwith-standing the number of ports that have come up, there are intermi-nable delays to allotting permits, and long-drawn discussions on the years it can be allowed to oper-ate. In spite of the hurdles, private ports continue showing a healthy bottomline and seem to garner continuous business.

This was vindicated going by a re-port brought out in early 2010 by the government of India on the status of ports. According to the report, minor ports have seen an increase in traffic in the first half of 2009-10. In the same period, major ports buckled under the global meltdown in cargo traffic, while minor ports (including private ports) saw an increase in traffic to the tune of 26.4 percent. Sector experts attribute this good showing to the efficient

The idea of having private ports alongside India’s coastline started in the

1980s and gathered momentum rapidly after the central govern-ment enacted major economic reforms in the 1990s. The need for private ports were felt as the government-run ports were sad-dled with obsolete technology, dis-played intermittent delays in load-ing, suffered constant congestion at ports amounting to delays, and had low connectivity to the hinter-land. “But as government activities go, most off icials were okay with that. As long as the government maintained its hold over the larg-est trading infrastructure, it could continue to run its course,” says KP Daroowala of Mumbai Maritime

Consultancy, an independent ports consultant.

Much before the economic lib-eralisation could unfold, Gujarat with its typical business acumen set up Gujarat Maritime Board in 1982 – a f irst for the state. It was also the f irst state in the country to take the lead in boosting up its ports infrastructure -- although simultaneously a small state like Goa had already laid the corner-stone -- to harness ports and inter-national trade as vehicles for eco-nomic development.

It was the economic liberalisa-tion of 1991 that changed the en-tire investment horizon for India.

xxx xxxxxxx

the development of the pipavav port was a signal for other investors to consider investing in private ports

Private Ports: Milestonesn The economic liberalisation of 1990s gave a boost to private

ports infrastructurenIn 1992, Pipavav Port was the first private port to come up in IndianIn the first half of 2009-10, private and minor ports saw an

increase in traffic to the tune of 26.4 percentnConstruction of ports is a permissible activity under CRZ

Notification, 2008, subject to obtaining prior environmental clearance from the Ministry of Environment & Forests

nThe Maharashtra government plans to develop 85 small ports, of which 57 will be built on a PPP model

nAnnual aggregate capacity at major ports is expected to increase by 74 percent to reach one billion tonnes by 2012. Minor ports will see an increase in capacity to 575 million tonnes.

nThe finance ministry has issued a diktat to the shipping ministry to stick to model concession agreement thus demonstrating approval of PPP model


administration at private ports. “Private sector involvement has

benefited the sector vastly. They bring with them efficiency, create healthy competition, are price com-petitive, offer better facilities, and overall have a good proposition to offer to all,” says Rahul Chaturve-di, CEO of i-maritime Consultan-cy Pvt Ltd, a maritime, port and shipbuilding consultant, offering finance, port and shipping consult-ing services. Despite the private ports' efficient run, experts say this segment suffers from red tape. “De-veloping a port requires clearances from the Coastal Regulation Zone (CRZ) and an environmental clear-ance from the central government. This is a most cumbersome proc-

ess. Sometimes, even after reaching financial closure, the private com-pany finds that an environmental clearance has not been given,” he says.

According to Daroowala, “En-vironmental clearances can take as long as 2-5 years. A few months ago, the environment ministry in-structed its committee to suggest

changes in the draft Coastal Man-agement Zone notif ication, 2008 and introduce a legislation to deal with the growing number of ports sprouting along the coastline.”

“In Maharashtra’s case, this (red tape) does not commensurate with the government’s own deci-sion two years ago to develop 85 small ports, of which it planned to give out 57 to the private sec-tor or build it on a public-private-partnership (PPP) model,” says Chaturvedi. He added that with an exponential growth in traff ic ex-pected, there is a dire need to in-crease capacity at private ports so as to meet demand.

Meanwhile, sources indicate that the state government had ap-pointed a small private consul-tancy f irm to conduct a feasibility study. The 57 ports would likely have included commercial ports, jetties and shipyards, of which some 20-odd will be shipyards, something the state is in dire need of. Currently, ships in need of re-pair have to make their way to Gu-jarat shipyards.

Chaturvedi of i-maritime Con-Activity at private ports is expected to reach an exceptional 500 million tonnes by 2012

The Regulatory Milieu

Tariffs at major ports are fixed by the Tariff Authority

of Major Ports (TAMP). Private ports are allowed to fix their own rates. In the recent past, TAMP has come under severe censure in the media for being unable to stop malpractices at ports. TAMP is soon expected to be replaced by a new regulatory body, Major Ports Regulatory Authority, which will have all the powers of a civil court. The new regulatory body is expected to be more powerful than TAMP and will not act as a mere tariff regulatory body.

Major Ports Regulatory Body will be entrusted with powers to investigate and inspect account

books of the 12 major ports as well as private operators. It will also have the right to punish offenders with fines up to Rs one crore. It will also settle disputes between the port management and operators using the facilities and services of the port.

With capacities at ports expected to almost double by 2012, a simultaneous justification is required in rationalisation of port tariffs. The existing regime of cost-plus returns on capital employed (ROCE) needs to be reviewed and revised in favour of a competitive, forward-looking tariff regime.

private sector involvement increase competition, are price competitive, offer better facilities, and have a good proposition to offer


< Special report

sultancy adds a word of caution here: “Fifty-seven private ports in Maharashtra are not feasible. In the f irst place, they will all be vy-ing for the same business and hin-terland traff ic. Also, most of them will simultaneously want to build a power plant and jetty.”

Recently, according to reports, the ministry of shipping has ban-ished the idea of allowing develop-ment of ports and instead consider expanding capacities at existing ones. An off icial in the Indian Ports Association, on condition of anonymity, says, “We understand that capacities will have to be ex-panded to accommodate the large scale growth in ports activity that

is expected. However, it is the tech-niques of handling future expan-sion in capacity that we will look at.” Techniques here could imply development of railway tracks and roads leading to the port, more container yards, improved private facilities along the river bank, addition of new berths, creation of deeper drafts, and mechanisa-tion projects.

Understandably, maritime states like Gujarat, Maharashtra, etc have also chalked out plans to develop projects to expand their port capacities considerably. Un-der the National Maritime Devel-opment Programme (NMDP) of the shipping ministry, minor port projects worth Rs 5,163 crore are

likely to come up.

ineffective governanceAt the CII’s Logistics Outsourcing Summit organised last month in Delhi, the Minister of Shipping GK Vasan, said that the annual aggre-gate capacity at major ports would increase by 74 percent to reach one billion tonnes by 2012. As for the non-major ports, the capacity is expected to increase to 575 million tonnes.

Building up such capacity calls for quick sanctions of projects. “Projects can get sanctioned and construc-tion can start only if the contractor has been chosen within the rounds of bidding,” says Manoj Shahu em-ployed at the commercial department at Gangavaram Port in Visakhapat-nam and in-charge of preparing bid documents. “Most of the times the modalities of bidding are not han-dled well. Even at the RFQ (request for quotations) stage or the pre-qualification stage, companies are rejected if their foreign JV partner is not suitable to the state government.”

A common grouse is that the maritime boards of the states are not proactive in getting investors to the port. Some port states do not even have a maritime board in place.

What makes it worse for the investors is the fact that the land they are bidding for to build a private port may already harbour minor port(s) and usually some of these do not even come under the

ambit of receiving environmental clearance procedures under the Environmental Protection Agency. “There are several dozens of mi-nor ports interspersed along In-dia's coasts that are lined up for development, without regard for environment or traditional liveli-hoods,” says Shahu.

In order to avoid delays in award of port projects, the f inance minis-try has asked the shipping minis-try to stick to the basic framework of the bid document, also called the model concession agreement (MCA). With as many as 20 projects worth Rs 25,000 crore to be award-ed this f inancial year, the Plan-ning Commission has changed its mind of making any changes to the MCA, which could have an adverse effect and keep bidders away. This intervention by the f inance minis-try is signif icant considering that it is the ministry that approves public-private partnership projects in infrastructure sectors.

However, private port investors are cautious and suspect that with the finance ministry spelling terms to the shipping ministry, there could be last minute changes to bid documents thus sometimes throw-ing the entire project out of gear.

With global economic activity picking up, Indian private ports are gung-ho about prospects and hope to derive some benefits in terms of increase in cargo.

Major port: Any port administered by the Centre is a major port irrespective of its cargo and passenger handling capacity.

Minor ports: fall in the concurrent list of the Constitution and the responsibility for their development and management rests with the state concerned.

private port: The private port developer owns all the port assets and operates all the services. There are very few ports where the port operator owns the port and sea front and these are only made available on long-term lease basis. These ports have been developed as private services port model.

Glossary

the finance ministry has asked the shipping ministry to stick to the Mca so that projects can be awarded quickly


< port profileS

Dhamra Port: Mineral-richIn Q4 2005, Dhamra Port Company

Ltd (DPCL) was awarded the conces-sion by the government of Orissa to build and operate a port north of the

mouth of river Dhamra in Bhadrak dis-trict on BOOST (Build, Own, Operate, Share and Transfer) basis for a period of 34 years, including four years for

construction. This lease period may be renewed or extended for two additional periods of 10 years each. The port was developed at a total cost of Rs 2,463 crore.

The port is situated between Haldia and Paradeep and can ac-commodate super cape-size ves-sels up to 180,000 DWT.

What can work to its advan-tage is that Dhamra has access to the mineral belt of Orissa, Jharkhand and West Bengal. The master plan of the port provides for a total of 13 berths to handle 83 million tonnes per annum consisting of all types of cargo such as dry bulk, break bulk, liq-

uid bulk and containerised cargo in different independent zones.

The port can accommodate three rail tracks, a six-lane road and serv-ice lines such as transmission lines and pipe lines.

The upcoming Dhamra port has kick-started efforts to at-tract cargo before it starts com-mercial operations in 2010. Website: www.dhamraport.com

Construction at Dighi Port is al-most complete and the port is

scheduled for opening in April 2010.

The port is a joint sector initiative Balaji Infra Projects Limited with the Mahar-ashtra Maritime Board venture under the PPP framework. IL&FS is a co-developer to the project and holds 20 percent equity in the project company.

Dighi Port Ltd signed a 50 years concession agreement in 2002 with the Maharashtra Maritime Board for the development, operations, man-agement, administration, financing & marketing of Dighi Port. The port is located in Rajpuri creek, Raigad District about 45 nautical miles south of Mumbai. Recently the port signed a MoU with the Container Corpora-tion of India (Concor) for providing rail support services. The plan also involves the development of ware-housing and distribution services.

Balaji Infra has also signed a MoU with Konkan Railway for developing a 45-km rail link so as to access the central hinterland of Maharashtra. The project will entail a cost of Rs 500 crore.

Dighi Port project also covers a Multiproduct Special Econom-ic Zone (DSEZ), including a Free Trade Warehousing Zone (FTWZ). Website: www.balaji.co.in

port specifications

Port Area 1500 Acres of land Phase I

Draft Phase 1 - 14.5m

Connectivity to hinterland

By road, connected by SH 90,92,96,97,98 to NH 12

Cargo Capacity 30m tonnes

No of berths 5

Length and capacity of berths

Total quay length - 1600 M -Simple linear quay 950 M

Type of cargo handled Bulk, break bulk, container cargo, liquid and gas cargo

Availiablity of shipyard Yes

Availiablity of SEZ SEZ Notification under process

Availiablity of warehousing facilities

FTWZ notification under process

A 50:50 joint

venture

between L&T

and Tata Steel

port specifications

Port Area Phase 1 - 300 acres

Draft 18m


By rail, work for the 62 kilometer rail link from Dhamra to Bhadrak. By road, connec-tivity to NH5, by air, Bhubaneswar airport

Cargo Capacity 25 mmt for Phase 1

No of berths 2


350m and combined 25 mmt

Container vs dry cargo Not operational yet

Availiablity of shipyard? No

Attachment to a SEZ or Warehousing facilities

No


No

A joint sector

between Balaji

Infra and

Maharastra

Maritime Board.

There are ten private ports in the country. The following is a compilation of main profiles and specifications — ownerships, cargo capacity, area — of eight big private ports in alphabetical order.

Dighi Port: Taking the challenge

india's private ports: overview


< port profileS

Gangavaram Port: In expansion modeThe state government of Andhra

Pradesh, with an intention to develop the Gangavaram port on public private partnership model, conducted a global bid process and selected the consortium led by DVS Raju, to develop and operate the port. The Rs1,800 crore Phase I of

the new private port, lo-cated 15km from the centrally owned Vizag port, started commer-cial operations in 2008. The consortium will handle port operations for 30 years and then hand over the company to the state government.

The port was recently in the news when the Gautam Adani-control-led Mundra Port and Special Eco-nomic Zone Ltd (MPSEZ) sought to buy Gangavaram port.

Last year, Gangavaram Port an-nounced plans to raise Rs 500-700 crore to part-finance its expansion plans. The company, which is work-ing out the modalities, is looking at debt market and internal sources.

The proposed expansion would involve increasing the number of berths, railway sidings and also the storage yards.

In another move, the state is con-templating a petrochemical complex at Visakhapatnam that would help Gangavaram to handle more cargo.Website: www.gangavaram.com

port specifications

Port Area 2800 acres

Draft 21 metres

Connectivity to hinterland by road NH5; rail connected to Chennai, Vizag, Howrah rail corridor

Cargo Capacity Phase I - 35 mtpa

No of berths 5

Length of berths 242 - 320 mtrs

Type of cargo handled Bulk, break bulk and project

Availiablity of shipyard No

Availability of SEZ No

Availiablity of warehousing facilities Yes

Hazira Port: The multi-cargo routerHazira Port was conceptualised

to make multi-cargo handling possible. It is connected to the Ara-bian Sea via the Gulf of Khambhat.

Rail connectivity to the port is under progress and alignment has been finalised. Rail connectivity will be done by Rail Vikas Nigam through a special purpose vehicle.

Hazira is strategically located to

capture traffic originating/destined from/for South Gujarat, Western Madhya Pradesh and Northern Ma-harashtra.

Last year, the company finalised plans to develop cargo berthing fa-cilities at Hazira port at an invest-ment of Rs 1,800-2,200 crore. The cargo facilities would be operation-al in four years. The plans include construction of two berths to re-ceive non-chemical containers and another for speciality chemicals for south Gujarat’s chemical zone in the Vapi-Ankleshwar area.

There are plans to increase the liquefied natural gas (LNG) han-dling capacity at the Hazira port from the current level of 2.5 million tonnes to 3.75 million tonnes by 2009-end.

Simultaneously, the Adani Group-promoted Mundra Port and SEZ Ltd (MPSEZL) will invest

at least Rs 1,000 crore in the first phase of development of non-LNG port facilities at Hazira, and com-mission the port in 2012.

The existing NH-6 connectiv-ity to the port is being upgraded through six-laning of the highway. In addition to Hazira, MPSEZL is also setting up cargo terminals at Dahej in Bharuch district of Gujarat and Mormugao, Goa. It is currently scouting for port development op-erations on the eastern coast of In-dia, South East Asia and Africa.Website: www.porthazira.com

port specifications

Port Area 65 hectares

Draft 12m

Connectivity to hinterland By road, NH8 and NH6

Cargo Capacity 11.5 MMTPA

No of berths 1 LNG handling jetty

Length and capacity of berths LNG handling of 10 MMTPA

Type of cargo handled LNG


Availiablity of SEZ No

Availiablity of warehousing facilities No

DVS Raju Group

(59 percent),

Andhra Pradesh

government

(11 percent),

Warburg

Pincus LLC (30

percent)

A joint venture

between the

Royal Dutch

Shell Group (74

percent) and

Total Group (26

percent)

59

Logistics is a key component in any enterprise and the backbone for SCM players. The logistics sector is on an upward growth in India, which means IT solutions for Indian logistics needs to be refined. Infolog looks at solutions for customers with a dedicated focus on ROI. The company ensure that it delivers cost-effective, quality software products and services

Infolog Solutions Pvt Ltd, a software firm based out of

Bengaluru, caters to the IT needs of the supply chain management industry. Initiated in 2001, the company’s initial focus was providing IT services to group companies. It then moved on to provide services for supply chain management, in the form of products as well as IT infrastructure management.

With an interesting range of software products, it caters to servicing various verticals in the logistics industry namely, warehouse management, freight-forwarding management, export-oriented units, among others. The company has its branches spread out in Chennai, Mumbai, Delhi and Hyderabad.

The clientele encompasses large and well-known Indian and international enterprises. EOSoft: The company’s long familiar product EOSoft also has a strong presence in the industry. A unique web-based application for export-oriented and STP units, it helps in automating and managing regulatory compliance. Companies mainly engaged in segments like EOU/EHTP/STP units can use this application under the 100 percent EOU scheme. It comprises a flexible, user-definable “duty calculator” that eliminates need for frequent changes to the software due to ever changing duty structure. To meet reporting

requirements and to monitor the status of compliance parameters it has various statutory and MIS reports as well as a “live dashboard”.

R Shanker, Infolog’s general manager is of the opinion that “though business parks facilitate companies to carry out their business operations with ease, businesses still have to follow various other compliance, regulations and statutory rules of governments, which involve documents and procedures.” He explains, “Compliance and regulations include applications to registrars, approvals and licenses, tax and customs certificates, goods procurements, warehousing and shipments documents and various others. It demands dedicated software solutions, which can facilitate companies to adhere to the compliance and regulations as well as support business operations.”

Software offered by Infolog Solutions are: WMSoft: One-of-a-kind software that helps in controlling inventory management at warehouses. It supports the use of bar code or RF based devices. It also provides visibility to measure the performance of various

activities in the warehouse against set SLAs.FFSoft: A web-based software that enables freight forwarders and their customers, agents and vendors to be integrated into its operations. It offers a total solution to automate needs of freight forwarders. It covers sea-freight and airfreight forwarding operations especially those having multi-company, multi-currency and multi-location facility. RMSoft: is largely for the reverse logistics and the repair industry. Built from the concept of Return Material Authorisation (RMA), it is a transaction whereby the customer of a product arranges to return defective goods to the manufacturer or having the product repaired or replaced. RMSoft provides for standardisation of business processes, inventory and location management.SEZSoft: is an unique software, which is used extensively for managing regulatory compliance for SEZ units, developers and developer-cum-units. A complete web-based application, it helps in managing regulatory compliance operations which is made easy with a set of tightly integrated modules. It provides visibility to compliance parameters

and asset movements as well as measurement of the performance of logistics/compliance/asset management activities against set SLAs. It has a flexible, user-friendly “duty calculator” that eliminates the need for frequent changes to the software due to ever-changing duty structure.

G Jagdish, Infolog’s deputy general manager (development) elucidates, “Both SEZSoft and EOSoft are developed on .NET technology and SQL Server Database by our 35-plus software development team.”

Infolog recently launched SAAS (software as a service) model to boost sales. According to R Balaji, DGM (sales), customers can purchase and pay for the product on a monthly basis on low recurring amounts. There is no investment required on hardware or application support person or annual maintenance contract. The software is completely hosted module-wise on Infolog’s server. Customers are allocated a specific broadband speed of 5 GB space and a user login id and password. Print outs of reports can be taken at any point of time as the data is stored by Infolog on day-to-day basis.

IT infrastructure management is another forte. Infolog also manages three data centres with IP-VPN, leased line for domain hosting, email administration and server maintenance through over 25 offices spread across 20 locations in India. Infolog also offers consultancy and total IT facility management services covering the entire gamut of IT infrastructure like software, hardware, networking, data security and internet connectivity solutions.

59

Communications Feature

Infolog: IT Solutions for SCM

R.ShankERGeneral ManagerInfolog Solutions Pvt ltd


< port profileS

Karaikal Port: New beginningsKaraikal Port Private Ltd (KPPL) is a

wholly-owned subsidiary of Marg Ltd, a leading infrastructure and real estate developer along the Chennai IT corridor. Marg Ltd was awarded the port through a tendering process on

a Build-Own-Transfer (BOT) basis. Marg Ltd. incorporated a special pur-pose company - Karaikal Port Private Limited - for implementation and op-eration of the project.

The Karaikal port has been devel-oped as a lagoon type harbour con-nected to sea by an entrance/access channel protected by short breakwa-ters. The port is envisioned to be devel-oped in 3 phases with the final phase getting operational in 2016.

The primary hinterland consists of districts within 200 km radius of the port. The secondary hinterland con-sists of districts that are 200 to 400 km from the port, namely Coimbatore, Namakkal, Dindigul, Erode and Sa-lem. There is also the tertiary hinter-land, places beyond 400 km.

Recently, IDFC Project Equity an-nounced its intention to invest Rs 150 crore in Karaikal port.

In January this year, Karaikal port crossed a milestone when the first train from the port siding was flagged off. The port has a railway siding capable of handling three mt of traffic via rail.

As a part of second phase develop-ment, the company is building three new modernised berths with conveyor belts to help direct offloading of cargo.

The port may also go in for an IPO this financial year.Website: www.karaikalport.com

port specifications

Port Area 604 acres

Draft 14m


By road, connected to NH45A, NH-67 and NH-45. By rail, link between Kara-ikal and Nagore.

Cargo Capacity Phase 1 – 5.2 MTPA

No of berths 2


2 berths of 230m each with a design capacity of 2.6MMPTA

Type of cargo handled Bulk, break bulk, liquid bulk and container


Availiablity of SEZ No

Availiablity of ware-housing facilities

Storage facilities present

Krishnapatanam Port: Position of strengthLocated in the Nellore District of

Andhra Pradesh and 180 km from Chennai, Krishnapatanam Port is the first of the state-owned minor ports to be awarded to a private party for devel-opment and private operations.

Krishnapatanam Port Company Ltd (KPCL) is drawing up plans to

set up a special economic zone on 12,000 acre in its vicinity.

The port recently achieved finan-cial closure for its Phase II expansion. The second phase will see inclusion of seven more berths, at an estimated cost of Rs 4,000 crore. A container freight station is also coming up and is expected to be completed by December 2011. A fully mechanised container terminal, an exclusive con-tainer handling berth will form part of the Phase II development while a ro- ro (roll on, roll off) jetty will come up on the western side. In Phase three, it is planning to set up a dedi-cated container yard. In all, the port will have a capacity to handle 60 mil-lion tonne of cargo on 42 berths.

At the same time, the company is planning to connect all port func-tions and share data with port users with Enterprise Port Management System.

Connected to NH-5, the port au-thorities have constructed a dedi-cated 25 km road to NH-5 and a railway line connecting the Chen-nai-Howrah broad gauge line near Venkatachalam. Six helipads have also been built. The port has easy ac-cess to two major airports at Chen-nai and Tirupati. The location of the port offers logistical advantage for trade in domestic as well as Asia-Pacific and far-eastern regions.Website: www.krishnapatnamport.com

port specifications

Port Area 6500 acres

Draft 14.5m


By road, connected to NH5. By rail, a railway via Venkatachalam.

Cargo Capacity 24 mtpa

No of berths 6


1100m combined length. Berth 2 for project cargo has a capacity of 12 metric tones/ cbm and the other 5 - 5 mt/ cbm

Container vs dry cargo Containers, Bulk cargo, Break bulk , Petrochemicals and Project Cargo



Warehousing facility is present. Plans to develop an SEZ

PPP between

government of

Andhra Pradesh

and CVR Group

of Navayuga

Engineering

Company

A wholly-owned

subsidiary of

MARG Ltd


Mundra Port: Signature portIn 1998, Adani Group was given

2008.41 hectare of reserved forest land in the Mundra and Dhrab taluka of Kutch district to set up a port and a Special Economic Zone (SEZ) from the state government for Rs 96.59 crore.

Located on the northern coast of the Gulf of Kutch on the west coast of In-dia, the port provides international trade gateway to Europe, Africa, Amer-ica and the Middle East.

Mundra Port and Special Eco-nomic Zone Limited (MPSEZ) was incorporated as Gujarat Adani Port Ltd., a joint sector company promot-ed by Adani Port Limited and Gujarat Port Infrastructure Development Company Ltd.

Mundra port offers connectivity by rail, road and air. The port also has its own privately owned railway line and private operational aerodrome.

The port possesses 21 closed go-downs, 8,80,000 sq m of demarcated open storage space for steel sheets, plate, clinker etc, and 26,000 sq m of open storage alongside rail siding.

Other facilities offered by the port are, customs establishment for statu-tory clearances, MPSEZ container

terminal under SEZ customs and the presence of nationalised and private banks inside the port’s limits.

The MPSEZ is India’s largest port-led SEZ. Leveraging the advantage of the port, the MPSEZ is being de-veloped over an area exceeding 100 sq km as a privately operated multi product, large format, diversified special economic zone approved by the government of India.

Two mega thermal power plants with total capacity in excess of 8600 MW are also being constructed. Website: www.portofmundra.com

port specifications

Port Area 50 acres

Draft 17.5m


By road, connected to NH8A.By air, connected to Bhuj & Kandla airports and a private aerodrome. By rail, a 57 km privately owned railway line.

Cargo Capacity 80 mn tonnes

No of berths 8


1200m (combined) and 25 m tonnes each

Type of cargo handled Bulk, break bulk, container, liquid and project cargo


Availiablity of SEZ Yes


Yes

Pipavav Port: The early moverLargely owned by APM Terminals

(54 percent), part of the AP Moller-Maersk Group. Other shareholders include New York Life International India Fund (Mauritius) LLC, IDFC In-frastructure Fund, The Infrastructure

Fund of India, IL&FS Trust Company Ltd., Jacob Ballas Capital India Pvt. Ltd., UTI, IDBI, and India Infrastruc-ture Fund.

Pipavav Port, India’s first port by the private sector is located on the West Coast of India. The port is in the news as Gujarat Pipavav Port Ltd (GPPL), the port developer and opera-tor, has filed draft papers with capital market regulator Securities and Ex-change Board of India (Sebi) and plans to raise nearly Rs 500 crore through an initial public offer (IPO). The company is also considering a pre-IPO place-ment with various investors, accord-ing to the Draft Red Herring Prospec-tus (DRHP) filed with Sebi.

GPPL is principally engaged in pro-viding port handling and marine serv-ices for container, bulk and LPG cargo. GPPL is promoted by APM Terminals, which owns 57.9 percent equity inter-est in the company. APM Terminals

took on the operation of Pipavav Port in 2005 and since then the company has invested more than Rs 11 billion in port infrastructure.

Pipavav Port is an all weather port with a dedicated container stockyard and warehousing infrastructure.

It was the first port in India to re-ceive double stacked containers in March 2006. Pipavav is also connected all the major ICDs in northwest India and Coastal feeder connectivity with southern and eastern ports in India.Website: www.portofpipavav.com

port specifications

Port Area 485 hectares

Draft 14.5m


By rail, via Surendranagar by Indian Railways and schdeuled services to all major ICD's. By road, NH8E.

Cargo Capacity Expanded facilities to handle up to 0.60 million TEUs

No of berths 4 and an LPG berth


1,075 metres used for handling bulk and containerised cargo and an LPG berth with a service deck of 65 metres

Type of cargo handled Bulk, container, general, and project cargo

Availiablity of shipyard Yes

Availiablity of SEZ Yes


Warehousing facilities present

Adani Group

APM Terminals

(54 percent), part

of the AP Moller-

Maersk Group

alongwith other

shareholders

The remaining two ports considered under the private category does not find a mention here due to their small-size capacity.


< EVENTS

A pr i l 2010April 6 And 7, 2010indiA Courier Summitle meridien, new delhiIndia Courier Summit provides an opportunity to service providers of the industry to interact with more than 100 industry professionals from India and overseas.

India Courier Summit 2010, an exhibition for the entire gamut of stakeholders of the industry, offers an opportunity to the value partners to showcase new trends and technologies that can add value to the efficient working of the concerned industry.Exhibitors at the summit will comprise vehicle manu-facturers, RFID chips and software developers, stor-age systems dealers, Barcode sensors companies, label manufacturers, weighing machines compa-nies, warehouse suppliers, and Material Handling Equipment manufacturers, among others.Tel: 91 11 46569212

April 8, 2010Aerodrome indiABombay exhibition Centre, mumbaiAerodrome India 2010 is the fourth edition of India’s pioneering and premier international exhibition and business forum on airport infrastructure and opera-tions. The fourth edition follows the earlier three most successful editions in this niche sector, which is witnessing enormous growth owing to the pro-active policies initiated by the Ministry of Civil Aviation.

Due to the sustained implementation of Ministry of Civil Aviation’s airport development plan, the Indian civil aviation industry is witnessing modernisation of existing airports / upgradation of smaller airports and development of new airports even as the global economic meltdown has impacted infrastructure development in many other parts of the world. Tel: 080-25547434

A PUBLICATION OF DVV MEDIA GROUP

www.log-india.com

DVV MEDIA INDIA DVV Media India Private Limited 9, Ground Floor, Sona Udyog, Parsi Panchayat Road, Andheri (East), Mumbai -400069 INDIA Phone :+91-22-28240198 / 28375323 Fax : +91-22-2836 0143

editoriAleditor: Aanand Pandey

editor-Special projects: Pamela Cheema

Features editor: Jayashree Mendes

Contributing editor: Kathryn [email protected]

CreAtiVeChief designer: Shivasankaran [email protected]

photography: Ramlath Kavil

SAleS And mArKetinGSales Head: Jayaram [email protected]

marketing manager: Abhishek [email protected]

north: Navneet Singh [email protected]

Sumit Bajpai [email protected]

West: Ashok Chand [email protected]

Dinesh Mishra [email protected]

marketing Support: Sangeeta D, Suhasini S

DVV MEDIA GROUP Gmbh www.dvvmedia.com

Ceo:Dr. Dieter Flechsenbergerdirector international Business development:Nigel Tomkins

Printed by Jacob Joseph Puthenparambil, published by Jacob Joseph Puthenparambil on behalf of DVV Media India Private Limited. Printed at Savai Printer Private Limited, A661, TTC Industrial Area, MIDC, Mahape, Navi Mumbai - 400 705, India and published at 9, Ground Floor, Sona Udyog, Parshi Panchayat Rd., Andheri (E), Mumbai - 400069.No part of this publication may be reproduced or transmitted in any form or by any means including photocopying or scanning without the prior permission of the publishers. Such written permission must also be obtained from the publisher before any part of the publication is stored in a retrieval system of any nature. No liabilities can be accepted for inaccuracies of any description, although the publishers would be pleased to receive amendments for possible inclusion in future editions. Opinions reflected in the publication are those of the writers. The publisher assumes no responsibilities for return of unsolicited material or material lost or damaged in transit. All correspondence should be addressed to DVV Media India Private Limited. All disputes are subject to the exclusive jurisdiction of competent courts and forums in Mumbai only.

ANNUAL SUBSCRIPTION RATE INDIA: INR 1080/- INTERNATIONAL: EURO 240 / USD 325 SUBSCRIPTION TERMS The minimum subscription period is one year.

INDIA

62

April 9, 2010Auto SCm: A BrAVe neW Worldindia Habitat Centre, new delhiLog.India is organising a one-day seminar on the automotive supply chain industry, Auto SCM: A Brave New World, on April 9, 2010 at India Habitat Centre, Lodhi Road, New Delhi - 3.

Auto SCM will begin its main session with a presentation on “The changing OWM world map: Imperatives for Indian auto SCM players” and discuss the emerging global and domestic map of the auto-motive and auto-component supply chain sector and the emerging role of SCM players in India.Other topics lined up at the event include: Fresh out of the oven: Lessons from the churn; and Innovate or Perish.Tel:022-28240198

April 30, 2010preSentAtion By mumBAi’S dABBAWAlASBandra Kurla Complex, mumbaiMumbai’s Dabbawalas will make a presentation at CSCMP Mumbai RoundTable. For further details,Contact: [email protected]

April 9-12, 2010BulKpACKHyderabad international trade exposition Centre (HiteX), Andhra pradeshBulkPack 2010 at Hyderabad to be held from 9-12 April 2010 is the first exhibition and conference in India for the bulk packaging industry. The fair will bring together Indian FIBC manufactures from all over the country. The show will cover various industry seg-ments including rigid metal, plastic & fibre containers, leno bags, wrapping fabric and intermediate bulk containers (FIBCs) etc. Bulk Pack 2010 will provide the industry and all its stakeholders to meet and partake of the emerging opportunities. Bulk Pack 2010 aims to reach the southern markets.Tel: 91 11 29812934/29812834

April 23, 2010CHemSpeC indiABombay exhibition Centre, mumbaiThe Chemspec India is organised by D. M. G. World Media at Bombay Exhibition Centre - NSE Exhibition Complex, NSE Exhibition Complex, Mumbai. It proves to be highly effective in acting as the connecting link between domestic & international buyers and sellers from all around the fine and specialty chemicals indus-try. It is a distinguishable event which is a platform for meeting of agrochemicals intermediates, biocides, cosmetics, colors & pigments, dyestuff intermediates, flavors/fragrances, organic intermediates etc. This is 3 days event which helps in networking with more than 12,000 professionals of different parts of the world.Tel: 44 1737 768611/768111

STATEMENT ON OWNERSHIP OF THE JOURNAL Form IV

(See Rule 8)1. Place of Publication DVV Media India Private Limited, 3rd Floor,

9, Sona Udyog, Parsi Panchayat Road, Andheri East, Mumbai 400069

2. Periodicity of its publication Monthly3. Printer’s Name Mustan Sir Saifee Savai, Nationality: Indian,

Savai Printers Pvt Ltd, A-661 TTC Ind. Area, Mahape, Navi Mumbai

4. Publisher’s Name Jacob Joseph Puthenparampil, Nationality: Indian, DVV Media India Private Limited, 9, Sona Udyog, Parsi Panchayat Road, Andheri East, Mumbai 400069

5. Editor’s Name Aanand Pandey, Nationality: Indian, DVV Media India Private Limited, 9, Sona Udyog, Parsi Panchayat Road, Andheri East, Mumbai 400069

6. Names and address of individuals who own the newspaper and partners or share holders holding more than one per cent of the total capital.

DVV Media Group GmbHNordkanalstr. 36, D-20097 HamburgPostfach 101609, D-20010 Hamburg

I, Jacob Joseph Puthanparambil, hereby declare that the particulars given above are true to the best of my knowledge and belief.Date: March 31, 2009Sd/-(Signature of Publisher)

PAN India Warehousing (3PL/4PL)

Reverse Logistics

Primary & Secondary Transportation

In-transit Damage Reduction Solutions

Partnership in Road Safety Programs

Logistics BPO

Logistics Staffing Services

Logistics Consultancy & Training

Audits & Benchmarking

E-04, Devashree Garden, Rutu Park Service Road,Majiwada Naka, Thane (W) – 400601. Maharashtra

Contacts : (+91) 99879 22244/9820761645E-mail: [email protected]

RNI No. MAHENG/2007/23777 l Registration No.MH/MR/South-279/2008-10Allowed to post at Patrika Channel Sorting Office G.P.O. Mumbai - 400001 Date of mailing: 5th of every month issue

64

log.india april 2010

Documents