APSEZ - From Port Gate Right Up to Doorstep
Logistics Focus Reflects Developments in the Global Maritime Space
From an operator of a nondescript multipurpose terminal at Navinal village on the Kutch coast to a multi-location ports operator, the Adani Ports and Special Economic Zone Ltd (APSEZ) has, over the past two decades, led a transformation in India’s inland and offshore goods movement, and is now set on becoming a complete logistics solutions provider.
The Ahmedabad-headquartered private sector ports and terminals operator recently entered into an agreement with the Gujarat government to develop India’s largest multimodal logistics park at Sanand near Ahmedabad. Spread across 1,450 acres, the park will cater to the fast-developing consumer market and industrial requirements for quick access to materials.
In the post-Covid-19 scenario, APSEZ is further strengthening its positioning in the logistics space. “APSEZ will be investing in the logistics and warehousing business with increased investment in tracks, rakes as well as land for developing multimodal logistics parks and warehousing facility,” company CEO Karan Adani said after the third quarter results on February 9.
Through its subsidiary Adani Logistics Limited (ALL), APSEZ consolidated its position in the logistics operations by adding container rakes and parks and expanding last-mile connectivity.
For its port operations, APSEZ is targeting a cargo handling capacity of 500 million tonnes (mt) by 2025, but in logistics it has set a target to set up over 15 logistics parks, over 5 million sq ft of warehouse space, grain silos with a 2.5-mt capacity, and have over 200 rakes and 25 inland waterways vessels by then.
Global structural shift
APSEZ’s logistics focus reflects the development in the global maritime space. Facing structural challenges, container shipping and ports segments are striving to create value for investors. There are indications from large players towards a vertical integration aimed at providing integrated logistics services and generating more value.
This indicates a clear shift from early 2000, when shippers focused on their core business and outsourced the inland movement of goods. Today, global majors such as DP World and Maersk are seen exploring diversifications or extensions of their business portfolios beyond port gate and further into logistics.
For APSEZ, the numbers speak for the unfolding new chapter. Although with a lower base, the growth in the logistics business for the company outperformed other verticals during fiscal 2019-20. In the consolidated revenues of ₹11,873 crore, logistics business contributed merely 8 per cent but it grew by a robust 65 per cent year on year, as against 8 per cent for the ports business, which commanded 87 per cent in revenues for the year.
Commenting on APSEZ’s rise, Samir Shah, Advisor, Federation of Freight Forwarders’ Association of India, said Adani was at the right place at the right time. “Adani Port’s rise matched India’s economic growth. Additionally, Adani as a group has been very quick in taking decisions and executing various projects. And, looking at the growing aspirations of the middle class in India, the movement of goods is going to increase, so they will be supported by the broader market growth,” Shah said.
On January 23, Mundra Port, the Group’s flagship port, completed 21 years of operation. In two decades, APSEZ bolstered its leadership by augmenting port capacities from 10 mt in 2006 at a single port to 410 mt across nine operational ports on the east and west coasts of India.