JSW Infrastructure, part of the $23-billion JSW Group, has ambitions of becoming a big player in the port sector with a four-pronged strategy of acquisitions and expansion, said its joint MD & CEO Arun Maheshwari. “…the way the Indian economy is growing, India needs more and more ports and assets like that. Today, our balance sheet supports it, and our intention is to become big in this sector. I think we will be able to make it big,” Maheshwari said. In the second quarter of FY24, the company handled close to 24 million tonnes of cargo, up 27 per cent on year, driven primarily by increased capacity utilisation. Its net profit rose 85 per cent to ₹256 crore, while revenue was 29 per cent higher at ₹895 crore.
The recently listed company, through a subsidiary, also signed an agreement with MPT Commodities of the Mercuria Group, Switzerland, to acquire a liquid storage facility of 465,000 cubic meters capacity at the Fujairah port in UAE for $187 million. Fujairah Port is the second-largest bunkering hub in the world after Singapore.
New acquisitions in the UAE
We have been entering new spaces of business over the last four years, initially starting with a small investment in the Mangalore container terminal. Now, we are investing in the second phase. Similarly, we started an LNG terminal at Jaigarh port… we are going very big with that, spending about $200 million. Now, we are getting into the liquid space through the Fujairah terminal.
We have a good value opportunity there, it gives us the chance to understand the business, the nuances of the system and, thereafter, we can venture into it if there’s an opportunity within India, or we can expand our existing terminals if we see a necessity. It’s a good business to be within India.
Growth strategy for the future
Any asset construction in the port sector requires a lot of gestation period. If we have to construct a greenfield port it will take about 3-5 years. If we have to bid for a terminal from the government ports, it will take one to two years’ time. If we acquire assets, then operations are immediate. We have a mix and match of everything.
So, future growth will come through a mix of existing asset utilisation, acquisition of assets, winning bids for government terminals, as well as greenfield ports. So, it will be a four-pronged strategy to grow in terms of volume, value, and target segments.
