Adani Enterprises Ltd, the operator of India’s biggest port outside state control, plans to enter coastal shipping and will buy small bulk ships for this purpose.Coastal shipping refers to the ferrying of cargo by small ships between Indian ports, and is considered among the most economical and environment-friendly modes of transport.
Coastal shipping makes business sense for the group as most of its mining locations are on the east coast while the power plants that require coal are on the west coast, said Devang Desai, chief financial officer of Adani Group.
The method helps “save a lot of money as it helps avoid ferrying the cargo through the congested rail and road network”, Desai said. “However, we are yet to finalize the details.”
He did not elaborate on details of ships and the investment involved.
Rival Allcargo Global Logistics Ltd recently bought two small bulk ships to get into coastal shipping. Leading coastal shipping companies include Shreyas Shipping and Logistics Ltd and SKS Logistics Ltd.
The government is planning new regulations to promote coastal shipping in order to ease road and rail congestion and trim transport costs.
“Coastal shipping is highly fragmented and a small market in size. Companies never explored this as an option as there were very few opportunities,” said Siddhartha Khemka, an analyst at domestic broking firm Centrum Broking Pvt. Ltd. “It is a welcome move if Adani Enterprises is entering this sector.”
The business will be largely captive in nature, considering that Adani Enterprises owns mines and operates ports, Khemka said.
“In general, major ports give least preference for coastal vessels but in the case of Adani Enterprises, it can give special treatment as they own and run Mundra Port,” Khemka said.
Adani’s Desai said the coastal shipping will be captive in nature initially. Adani owns several mines on the east coast of India and overseas. Adani has won a competitive bid for developing the Chhendipada coal block in Orissa. This block is estimated to have reserves of 1,600 million tonnes (MT). Including this, Adani’s mining portfolio now stands at a total of 110 MT a year.
The group has already acquired two bulk ships with a capacity of 175,000 DWT (dead weight tonnes), according to Desai.
“We are buying two more big ships,” he said.
Adani has been engaged in setting up a port and special economic zone, logistics management (shipping to container train movement), storage and movement (food grain and orchard products) as well as realty.
Adani Enterprises owns Mundra Port and Special Economic Zone Ltd in Gujarat and is engaged in developing ports, and terminals at Dahej and Hazira in Gujarat and Mormugao in Goa.
The group handled about 52 MT of cargo in the fiscal year to March and aims to increase it to 200 MT by 2020.
Coastal shipping makes business sense for the group as most of its mining locations are on the east coast while the power plants that require coal are on the west coast, said Devang Desai, chief financial officer of Adani Group.
The method helps “save a lot of money as it helps avoid ferrying the cargo through the congested rail and road network”, Desai said. “However, we are yet to finalize the details.”
He did not elaborate on details of ships and the investment involved.
Rival Allcargo Global Logistics Ltd recently bought two small bulk ships to get into coastal shipping. Leading coastal shipping companies include Shreyas Shipping and Logistics Ltd and SKS Logistics Ltd.
The government is planning new regulations to promote coastal shipping in order to ease road and rail congestion and trim transport costs.
“Coastal shipping is highly fragmented and a small market in size. Companies never explored this as an option as there were very few opportunities,” said Siddhartha Khemka, an analyst at domestic broking firm Centrum Broking Pvt. Ltd. “It is a welcome move if Adani Enterprises is entering this sector.”
The business will be largely captive in nature, considering that Adani Enterprises owns mines and operates ports, Khemka said.
“In general, major ports give least preference for coastal vessels but in the case of Adani Enterprises, it can give special treatment as they own and run Mundra Port,” Khemka said.
Adani’s Desai said the coastal shipping will be captive in nature initially. Adani owns several mines on the east coast of India and overseas. Adani has won a competitive bid for developing the Chhendipada coal block in Orissa. This block is estimated to have reserves of 1,600 million tonnes (MT). Including this, Adani’s mining portfolio now stands at a total of 110 MT a year.
The group has already acquired two bulk ships with a capacity of 175,000 DWT (dead weight tonnes), according to Desai.
“We are buying two more big ships,” he said.
Adani has been engaged in setting up a port and special economic zone, logistics management (shipping to container train movement), storage and movement (food grain and orchard products) as well as realty.
Adani Enterprises owns Mundra Port and Special Economic Zone Ltd in Gujarat and is engaged in developing ports, and terminals at Dahej and Hazira in Gujarat and Mormugao in Goa.
The group handled about 52 MT of cargo in the fiscal year to March and aims to increase it to 200 MT by 2020.