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7/29/2019 Demand & Supply Assessment of ports in India
1/16
Demand & Supply Assessment of ports in India&
Growth Drivers for Investors
Cdr Manoj Bhatt / Anand V Sharma
Mantrana Maritime Advisory Pvt Ltd
2nd India Port Expansion and Capacity Upgrading
Chennai, India on November 3rd & 4th, 2011
7/29/2019 Demand & Supply Assessment of ports in India
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2
Contents
Indian Ports Sector Overview
Demand Drivers of Ports in India
Historic Trend for Port Traffic Growth by region
Region wise Market Share of Indian Ports
Analysis of Commodities Handled at Indian Ports
Reasons & Impact of Port Development in Gujarat A Case Study
Upcoming Capacity An Assessment
Upcoming Capacity Backlash & Resolution Upcoming Capacity Real-world examples
Conclusion
About Mantrana & Arcadis
www.mantrana.in
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Indian Ports Sector Overview
Indian trade is dominated by low value high volume commodities
Share of 1.5% of Global trade by Value & Close to 8% by Volume
Liquid & Bulk Dominates Indian Port Traffic, with following key drivers
Cumulative Refining Capacity of 193 MMTPA
Export of raw material, Iron Ore India is 3rd largest exporter
Energy Demand from Coal Fired power plants, Steel Plants & Industrial Units
Containerized Cargo would be the next growth drivers Rise in Per Capita Income would lead to higher consumption of finished goods
Gradual rise of export oriented manufacturing in India
Existing Government owned ports find difficult to accommodate growth
Cities have grown around them restricting their expansion
Commercially unattractive to handle new generation ships with large draft by way of Dredging.
Opens Opportunity for Large Scale Private Participation & Greenfield Ports
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Demand Drivers of Ports in India
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India has huge landlocked region
Large population spread with rising
disposable income
Huge investment in Infrastructure @ coast
Industrial development such as power
plants/ steel plants
LandlockedHinterland
Source: Mantrana Maritime Advisory
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Historic Trend for Port Traffic Growth by region
www.mantrana.in
In last 15 Years, Indian Port Traffic has increased 4 times. How much Stakeholders Gained from Growth?
0
200
400
600
800
1,000
1994-95
220
1999-00
328
2004-05
522
2010-11
884
StateWisePort Traffic (mn Tonnes)
Gujarat
West Bengal
AndamanNicobar
Maharashtra
Goa
Karnataka
Kerela
Tamilnadu
Pondicherry
AndhraPradesh
Orissa
Source: Mantrana Maritime Advisory
Data: IPA/INA/GMB
15 yr CAGR = 9.7% `
10 yr CAGR = 10.4%
5yr CAGR : 8%
5yr CAGR : 10%
5yr CAGR : 11%
2010-11 traffic is Provisional
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Region wise Market Share of Indian Ports
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0
20
40
60
80
100%
1994-95
220
1999-00
328
2004-05
522
2010-11
884
Gujarat
West Bengal
Andaman Nicobar
Maharashtra
Goa
KarnatakaKerela
Tamilnadu
Pondicherry
Andhra Pradesh
Orissa
Source: Mantrana Maritime AdvisoryData: IPA/INA/GMB
Market Share in %/Total in mn Tonnes
In last 15 Years, Every State has gained traffic. However, Gujarat has gained maximum Market Shareincreasing from 20% to 30% & Maharshtra, Goa, Tamil Nadu and West Bengal have lost theirs
2010-11 traffic is Provisional
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Analysis of Commodities Handled at Indian Ports
www.mantrana.in
0
200
400
600
800
1,000
1999-00
299
2004-05
522
2010-11
884
Commodity Wise Port Traffic (mn Tonnes)
Crude & Petroleum
Iron Ore
Fertilizer
Coal
Container
Others
Source: Mantrana Maritime AdvisoryData: IPA/INA/GMB/
Traffic Driven by Refineries, With Use of SBM/SPM.Relevance & Benefit to Port is Limited
Iron Ore has influence of government policy on Export
Driven by industries. However, industries with largerequirements such as power plants look for captive Jetty
Huge Potential in Future due to rise of consumption &
Manufacturing. However, traffic dictated by shipping lines
These are distributed in lower volumes across portsdepending upon Hinterland
2010-11 traffic is Provisional
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Reasons & Impact of Port Development in Gujarat A Case Study
www.mantrana.in
Industries & Ports together have led to the overall Social & Economic development of Gujarat
Gujarat handles about 35% of Indias Port Traffic because theyhave developed Industries as well, which is driving port volumes
Source: Mantrana Maritime AdvisoryData: IPA/INA/GMB/
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Upcoming Capacity An Assessment
www.mantrana.in
2010-11 traffic is Provisional
2020 Capacity does not include plans for captive Ports /
Green Field Ports
What could be Capacity if they too come up?
Equivalent to35% of Global
Trade (2010)
0
1,000
2,000
3,000
4,000
2010-11
884
2030
3,107
Comparision Between Existing Port Traffic & Capacity Planned (mn Tonnes)
Gujarat
West BengalAndaman Nicobar
Maharashtra
Goa
Karnataka
Kerela
Tamilnadu
Pondicherry
Andhra Pradesh
Orissa
Source: Mantrana Maritime AdvisoryData: IPA/INA/GMB/Maritime Agenda
Existing Traffic
Planned Capacity
2010-11 2020
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www.mantrana.in
Upcoming Capacity An Assessment
10
1056
285
464
128
6383
44
160
18
130
97
331
109
368
57
360
46
154
Gujarat
Maharashtra
Goa
Karnataka
Kerala
TamilNadu
AndhraPradesh
Orissa
West
Bengal
Port Traffic (2009-10)
Ports Capacities by 2020
* All values are in Million Tonnes
Will the trade in these statesincrease to complement the
augmented capacities at its portsby 2020?
Source: Mantrana Maritime Advisory
Data: IPA/GMB/Maritime Agenda
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www.mantrana.in
Upcoming Capacity Backlash & Resolution
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Will these maritime states have enough trade volume to justify the capacity expansion by 2020?
Trade growth may not be uniform across all the maritime states
Increase in handling capacity doesnt translate into increase in port traffic
Addition in port capacity will not ensure availability of corresponding cargo
In case of overcapacity, ports will be contending for the same share of cargo
Consequently, uneven distribution of cargo volume
Some companies may perform better than others
Its the presence of industries that, ultimately, drives the port business
Augmentation in capacity is borne out of demand from thriving industries in the region
Only presence of adequate industries can justify the increase in ports capacities
Increase in port capacity will be logical only if its accompanied by industrialization
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www.mantrana.in
Upcoming Capacity Real-world examples
12
JNPT vs Mumbai Port Trust
JNPT was commissioned as MbPTs satellite port, to help decongest the MbPT
Over a period of time, due to better infrastructure, JNPT attracted more traffic
JNPT started attracting container share from MbPT
In the last 15 years, JNPT has grown to become the largest container terminal in India, while MbPThas been reduced to the smallest container terminal in India
Kolkata Dock System (KDS) vs. Haldia Dock Complex (HDC)
HDC, similar to JNPT, was intended as KDSs satellite port
In 2001-02, KDS handled barely 5 mn Tonnes, while HDC handled nearly 25 mn Tonnes.
Even today, HDC witnesses more traffic than KDS. In 2010-11, KDSs traffic was 12.5 mn Tonnes,
while HDCs was 34.8 mn Tonnes
Inter-port competition is a potential threat for the intended capacity expansion drive
Of the two competing ports, one is bound to lose some amount of either existing or additional traffic share
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www.mantrana.in
Conclusion
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India Needs more port capacity. However, judicious planning is essential
Just Setting up port does not attract traffic
In the absence of Industries and trade growth, Ports fight for Same Cargo. Win for one port is
loss to another port..
Skewed ratio of supply and demand may render some of the expansion ventures non-viable
Be Choosy in selecting Right Investment Herd Mentality will Cost you High
Port Prospers and Rewards, if it is developed at right location with right infrastructure and
Correct market focus ------ -Else it could turn out to be Sunk Cost
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www.mantrana.in
About Mantrana
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Undertakes Independent Assessment of Ports & Related infrastructure
Statistical Analysis & Primary Interaction with the Customer is the Key Methods used forAnalysis
No Room for Passionate views/ Opinions & All recommendations are driven by Numbers &
Logic
Has Association with Arcadis, A Dutch company with expertise on all technical matters
related to port.
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www.mantrana.in
About Mantrana
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7/29/2019 Demand & Supply Assessment of ports in India
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Thank You for Attention
Mantrana Maritime Advisory Pvt. Ltd.A-207, Sai Chambers, Plot No. 44Sector -11 CBD BealpurNavi Mumbai - 400 614.
Maharashtra, India
Landmark : Near CBD Station, Opp. IDBI Bank Bldg.
Tel : +91-22-6609 8010 / 6609 8011Fax : +91-22-6609 8013Email : [email protected] : www.mantrana.in