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For long ports on the west coast have been spearheading container cargo movement in India, and bulk and break bulk cargo were volume drivers on the east coast. But the trend seems to be changing on the east coast. Ports and terminals on the east coast were in a fix when early last year Coal Ministry abruptly decided to increase procurement from domestic mines. Ports and terminals on the east coast were already under distress after the restriction on iron ore export, and since then coal has been a major principal commodity for them. Amid all these uncertain times, ports and terminals in Visakhapatnam have noticed some positive signs that could lead to cargo volume growth in the region. Present cargo scenario The bulk segment commodities like iron ore and pelletes have increased almost twice between April, 2016 and January, 2017. About 81 lakh tonnes of the commodity has been shipped from the port between April, 2016 and January, 2017 as compared to 38 lakh tonnes during the same period of previous year. So what led to the growth of the cargo and will it sustain? Essar Steel has a 6-million-tonne steel plant at Hazira and the company moves about 3 million tonnes of pellets from its plant in Visakhapatnam by coastal shipment.
Visakhapatnam Port has registered an overall growth in coastal cargo, which accounts for about 24 per cent of total cargo handled at the port. Among the coastal cargo, about 5 million tonnes of iron ore and pellets for steel plants in Maharashtra and Gujarat, 2 million tonnes of POL products, and about 3-3.5 million tonnes of coal for thermal power plants in Tamil Nadu were handled at the port.
Essar Berth also has commitment with MMTC and NMDC to supply iron ore to Japan and South Korea. As per the agreement between MMTC with steel plants in Japan and South Korea, high grade iron ore will be exported during the three-year period from April 2015 to March 2018. About 16.5 MMT of high grade iron ore is expected to be supplied to Japan and South Korea till March 2018.
Increase in containerized cargo volume has already been noted at Visakha Container Terminal. Industry insiders say the terminal has registered a volume increase in excess of about 27-29 per cent in recent times. Notably, the J.M. Baxi Group-led container terminal in Visakhapatnam has handled 0.29 million teu in FY2015-16 as compared to 0.24 million teus in FY2014-15. In a recent interview with Maritime Gateway, Anup Kumar Satpathy, Chief General Manager (Central Region), Concor had said that rice is a major export commodity for Concor (Central Region), which has now shifted from JN Port to Visakha Container Terminal largely due to improved road conditions and lower road freight rates from Central India to Visakhapatnam.
Container shipments at the terminal touched 48 lakh tonnes between April, 2016 and January 2017 as compared to 36 lakh tonnes during the corresponding period last fiscal. The port has also extended 50 per cent concession on pilotage and berthing charges for mainline vessels of 50,000 GRT and above. Exporters from Nepal after battling with congestion at Kolkata, are looking at Visakhapatnam as an alternate gateway. About 8,000 teu have been moved from the port to the landlocked country in a trial run in June last year. The port has also signed agreement for cargo movement to Bangladesh. It will boost textile, fertilizer, and food grain volume. It also opens potential to move cargo to landlocked north eastern states of India, through Bangladesh.
Three regions Visakhapatnam, Kakinada and Krishnapatnam have been identified in Andhra Pradesh under the Coastal Economic Zones (CEZ) programme.
Future prospects
Visakhapatnam already has the ground for industries like food processing, petrochemicals, cement, and apparel, which have been identified by the ministry for potential growth. Moreover, crude oil refinery at Paradip and marine product industry in Odisha will further compliment cargo growth in Visakhapatnam. Based on the shipping ministry’s Origin Destination study on cargo traffic projections and logistics bottlenecks, in future about 5 million tonnes of POL products will be moved from the oil refinery in Paradip to meet the requirement in Andhra Pradesh and Telangana. Expansion of HPCL refinery in the future will lead to a traffic of roughly 15 MTPA of crude import by 2025. POL coastal traffic is expected to reach 7.5 MTPA by 2025. LPG imports are also expected to increase to 1.5 MTPA by 2025 from current 1.1 MTPA, driven by government’s focus on distribution of LPG connections to rural households.
Adani Vizag Coal Terminal had entered into a concession agreement with Vishakhapatnam Port to set up a steam coal handling facility with a capacity of 6.4 million tonnes a year in 2011 and the project was commissioned in December 2013. The facility can handle steam coal volumes of up to 9 million tonnes and aimed at coal imports to feed the local industries and power plants in Andhra Pradesh, Odisha, Chhattisgarh and Maharashtra. But coal ministry’s embargo has put the project in a fix. Adani Group requires around 4 MTPA thermal coal for Adani Power Maharashtra located in Gondia. There is need for import of about 9 MTPA of thermal coal through Visakhapatnam, to serve power plants in Gondia and Tiroda in Maharashtra, Andhra Pradesh and Telangana, and steel and other industries in the hinterland. Adani Group following the tussle involving berth operated by group company Adani Vizag Coal Terminal at Visakhapatnam Port, uses Ganagavaram Port to import roughly 2 million tonnes of thermal coal. Steel plants in the hinterland of Visakhapatnam led by RINL, SAIL Bhilai, Jindal Power and Steel, Tata Steel, Uttam Galva, Bhushan Power and Steel consume about 6 MTPA of coking coal, and as market improves for steel industry, coking coal demand will rise to 8.6 MTPA by 2020, 11-12 MTPA by 2025 and 18-20 MTPA by 2035.
Potential volume drivers will be iron ore and pellets, fertilizer, alumina powder. Coastal shipping will be driven by fertilizer, coal, steel, cement and food grain.For long ports on the west coast have been spearheading container cargo movement in India, and bulk and break bulk cargo were volume drivers on the east coast. But the trend seems to be changing on the east coast. Ports and terminals on the east coast were in a fix when early last year Coal Ministry abruptly decided to increase procurement from domestic mines. Ports and terminals on the east coast were already under distress after the restriction on iron ore export, and since then coal has been a major principal commodity for them. Amid all these uncertain times, ports and terminals in Visakhapatnam have noticed some positive signs that could lead to cargo volume growth in the region. Present cargo scenario The bulk segment commodities like iron ore and pelletes have increased almost twice between April, 2016 and January, 2017. About 81 lakh tonnes of the commodity has been shipped from the port between April, 2016 and January, 2017 as compared to 38 lakh tonnes during the same period of previous year. So what led to the growth of the cargo and will it sustain? Essar Steel has a 6-million-tonne steel plant at Hazira and the company moves about 3 million tonnes of pellets from its plant in Visakhapatnam by coastal shipment.
Visakhapatnam Port has registered an overall growth in coastal cargo, which accounts for about 24 per cent of total cargo handled at the port. Among the coastal cargo, about 5 million tonnes of iron ore and pellets for steel plants in Maharashtra and Gujarat, 2 million tonnes of POL products, and about 3-3.5 million tonnes of coal for thermal power plants in Tamil Nadu were handled at the port.
Essar Berth also has commitment with MMTC and NMDC to supply iron ore to Japan and South Korea. As per the agreement between MMTC with steel plants in Japan and South Korea, high grade iron ore will be exported during the three-year period from April 2015 to March 2018. About 16.5 MMT of high grade iron ore is expected to be supplied to Japan and South Korea till March 2018.
Increase in containerized cargo volume has already been noted at Visakha Container Terminal. Industry insiders say the terminal has registered a volume increase in excess of about 27-29 per cent in recent times. Notably, the J.M. Baxi Group-led container terminal in Visakhapatnam has handled 0.29 million teu in FY2015-16 as compared to 0.24 million teus in FY2014-15. In a recent interview with Maritime Gateway, Anup Kumar Satpathy, Chief General Manager (Central Region), Concor had said that rice is a major export commodity for Concor (Central Region), which has now shifted from JN Port to Visakha Container Terminal largely due to improved road conditions and lower road freight rates from Central India to Visakhapatnam.
Container shipments at the terminal touched 48 lakh tonnes between April, 2016 and January 2017 as compared to 36 lakh tonnes during the corresponding period last fiscal. The port has also extended 50 per cent concession on pilotage and berthing charges for mainline vessels of 50,000 GRT and above. Exporters from Nepal after battling with congestion at Kolkata, are looking at Visakhapatnam as an alternate gateway. About 8,000 teu have been moved from the port to the landlocked country in a trial run in June last year. The port has also signed agreement for cargo movement to Bangladesh. It will boost textile, fertilizer, and food grain volume. It also opens potential to move cargo to landlocked north eastern states of India, through Bangladesh.
Three regions Visakhapatnam, Kakinada and Krishnapatnam have been identified in Andhra Pradesh under the Coastal Economic Zones (CEZ) programme.
Future prospects
Visakhapatnam already has the ground for industries like food processing, petrochemicals, cement, and apparel, which have been identified by the ministry for potential growth. Moreover, crude oil refinery at Paradip and marine product industry in Odisha will further compliment cargo growth in Visakhapatnam. Based on the shipping ministry’s Origin Destination study on cargo traffic projections and logistics bottlenecks, in future about 5 million tonnes of POL products will be moved from the oil refinery in Paradip to meet the requirement in Andhra Pradesh and Telangana. Expansion of HPCL refinery in the future will lead to a traffic of roughly 15 MTPA of crude import by 2025. POL coastal traffic is expected to reach 7.5 MTPA by 2025. LPG imports are also expected to increase to 1.5 MTPA by 2025 from current 1.1 MTPA, driven by government’s focus on distribution of LPG connections to rural households.
Adani Vizag Coal Terminal had entered into a concession agreement with Vishakhapatnam Port to set up a steam coal handling facility with a capacity of 6.4 million tonnes a year in 2011 and the project was commissioned in December 2013. The facility can handle steam coal volumes of up to 9 million tonnes and aimed at coal imports to feed the local industries and power plants in Andhra Pradesh, Odisha, Chhattisgarh and Maharashtra. But coal ministry’s embargo has put the project in a fix. Adani Group requires around 4 MTPA thermal coal for Adani Power Maharashtra located in Gondia. There is need for import of about 9 MTPA of thermal coal through Visakhapatnam, to serve power plants in Gondia and Tiroda in Maharashtra, Andhra Pradesh and Telangana, and steel and other industries in the hinterland. Adani Group following the tussle involving berth operated by group company Adani Vizag Coal Terminal at Visakhapatnam Port, uses Ganagavaram Port to import roughly 2 million tonnes of thermal coal. Steel plants in the hinterland of Visakhapatnam led by RINL, SAIL Bhilai, Jindal Power and Steel, Tata Steel, Uttam Galva, Bhushan Power and Steel consume about 6 MTPA of coking coal, and as market improves for steel industry, coking coal demand will rise to 8.6 MTPA by 2020, 11-12 MTPA by 2025 and 18-20 MTPA by 2035.
Potential volume drivers will be iron ore and pellets, fertilizer, alumina powder. Coastal shipping will be driven by fertilizer, coal, steel, cement and food grain.
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