DECEMBER 2016 for Updated Information, Please Visit 1 PORTS
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PORTS DECEMBER 2016 For updated information, please visit www.ibef.org 1 PORTS Executive Summary…………………………3 Advantage India……………………….……..5 Market Overview & Trends………………….7 Porter Five Forces Model Analysis ………18 Strategies Adopted………………..……….20 Growth Drivers………………………..…….22 Opportunities………………………………..39 Success Stories………………..………. ….41 Useful Information…………………………..47 DECEMBER 2016 For updated information, please visit www.ibef.org 2 PORTS EXECUTIVE SUMMARY … (1/2) Increasing trade activities and CAGR: 17.5% By FY17, cargo capacity in private participation in port 2493.0 India is expected to increase to 1806.8 infrastructure set to support 2,493.1 MMT from 1,806.8 port infrastructure activity MMT in FY15 FY15 FY17 MMT CAGR: 55.53% By FY17, cargo traffic at major ports in India is expected to rise 943.1 India has 12 major ports 606.37 to 943.1 MMT from 606.37 MMT in FY16 at a YoY of 55.53 per cent FY16 MMT FY17E CAGR: 75% 815.2 By FY17, cargo traffic at non- India’s 200 non-major ports are major ports in India is expected strategically located on the 466.1 to grow to 815.2 MMT from world’s shipping routes 466.1 MMT in FY16 FY16 FY17E Source: Ministry of Shipping, TechSci Research Notes: E – Estimates, MMT - Million Metric Tonnes DECEMBER 2016 For updated information, please visit www.ibef.org 3 PORTS EXECUTIVE SUMMARY … (2/2) 21 CAGR: 156% By FY17, container demand in India (For major ports) is Trade to boost demand for 8.20 expected to increase to 21 containers million TEU from 8.2 million TEU in FY16 FY16 FY17E 228 CAGR: 128.7% By FY17, iron ore traffic (For Infrastructural development to Major & Minor ports) is increase demand for iron and expected to rise to 228 MMT steel 43.6 from 43.6 MMT in FY15 FY15 FY17(E) MMT Source: Ministry of Shipping, TechSci Research Notes: FY17 (E) – Estimates, TEU – Twenty Foot Equivalent Unit, MMT - Million Metric Tonnes DECEMBER 2016 For updated information, please visit www.ibef.org 4 PORTS ADVANTAGE INDIA PORTS ADVANTAGE INDIA Robust demand FY16 Growing demand Attractive opportunities FY17E • Port traffic in India is set to rise at a CAGR of Cargo 29.2 per cent over FY15–17 • Non-major ports are set to benefit from Cargo traffic in • CAGR in traffic : strong growth in India’s external trade traffic in MMT: • Non-major ports: expected to increase MMT: 1072.47 by 140.5 per cent to 815 MMT by 2017 • Special Economic Zones are being 1,758.3 from March 2016 developed in close proximity to several • Major ports: expected to increase by ports – comprising coal-based power 55.5 per cent to reach 943 MMT by plants, steel plants and oil refineries 2017 from FY16 (April-December 2015) Advantage India Competitive advantages Policy support • India has a coastline which is more than • The government initiated NMDP, an 7,517 km long, interspersed with more initiative to develop the maritime sector; than 200 ports the planned outlay is USD11.8 billion • Most cargo ships that sail between East • FDI of 100 per cent under the automatic Asia and America, Europe and Africa pass route and a ten year tax holiday for through Indian territorial waters enterprises engaged in ports • Plans to create port capacity of around • India is the largest importer of thermal 3200 MMT to handle the expected coal in the world • traffic of about 2500 MMT by 2020 Source: Report of the Task force on Financing Plan for Ports, Govt. of India, TechSci Research Notes: FY – Indian Financial Year (April–March), NMDP – National Maritime Development Programme, FDI – Foreign Direct Investment, USD – US Dollar, E – Estimated, MMT – Million Metric Tonnes, CAGR – Compound Annual Growth Rate DECEMBER 2016 For updated information, please visit www.ibef.org 6 PORTS MARKET OVERVIEW AND TRENDS PORTS THERE ARE TWO BASIC CATEGORIES OF PORTS IN INDIA Ports in India (2015) Major Non-major (minor) • There are 12 major ports in • India has about 200 non- the country; 6 on the major ports of which one- Eastern coast and 6 on the third are operational Western coast • Non-major ports come • Major ports are under the under the jurisdiction of the jurisdiction of the respective state Government of India and Governments’ Maritime are governed by the Major Boards (GMB) Port Trusts Act 1963, except Ennore port, which is administered under the Companies Act 1956 Source: Ministry of Shipping; TechSci Research DECEMBER 2016 For updated information, please visit www.ibef.org 8 PORTS MAJOR PORTS IN INDIA Kandla Kolkata Paradip Mumbai JNPT Visakhapatnam Mormugao New Mangalore Ennore Chennai Cochin Tuticorin Note: JNPT – Jawaharlal Nehru Port Trust DECEMBER 2016 For updated information, please visit www.ibef.org 9 PORTS CARGO TRAFFIC IS ON THE RISE … (1/2) Cargo traffic at major ports in India – Cargo traffic at major ports (MMT) 943.1 Stood at 606.37 MMT in FY16 CAGR: 7.4% Increased at a CAGR of 7.4 per cent during FY07–17E 581.3 606.37 561 569.8 560.1 545.6 555.3 519.2 530.4 Cargo traffic in 2017 at major ports is expected to reach 463.6 943.1 MMT During April to September 2016, 12 major ports in India handled 315.4 MT (Million Tonnes) of cargo, showing a growth of 5.1 per cent in comparison to the same time during previous year. FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17E Source: Ministry of Shipping, TechSci Research Notes: MMT – Million Metric Tonnes, CAGR – Compound Annual Growth Rate, FY – Indian Financial Year (April–March), E – Estimated DECEMBER 2016 For updated information, please visit www.ibef.org 10 PORTS CARGO TRAFFIC IS ON THE RISE … (2/2) Non-major ports are evolving faster than major ports- Percentage share of ports Non-major ports are gaining shares and a major chunk of 28.2% 28.6% traffic has shifted from major ports to non-major ports 28.7% 34.0% 35.6% 38.7% 41.6% 42.9% 43.5% 44.8% 46.4% The contribution of non-major port’s traffic to total traffic rose to 43.5 per cent in FY16 from 28.6 per cent in FY07 71.8% 71.4% 71.3% 66.0% 64.4% 61.3% 58.4% 57.1% 56.5% 55.2% 53.6% FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17E Major Ports Non Major Ports Cargo traffic at non-major ports – Cargo traffic at non-major ports (MMT) 815.2 Stood at 466.1 MMT in FY16 CAGR: 15.9% Cargo traffic has expanded at a CAGR of 10.7 per cent 471.2 466.1 417.1 during FY07–16 and is expected to grow annually at 15.9 353.0 387.9 per cent during FY07-17 288.9 314.9 186.1 203.6 213.2 Cargo traffic in 2017 at non-major ports is expected to reach 815.2 MMT FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17E Source: Ministry of Shipping, TechSci Research Notes: MMT – Million Metric Tonnes, CAGR – Compound Annual Growth Rate, FY – Indian Financial Year (April–March); E – Estimate DECEMBER 2016 For updated information, please visit www.ibef.org 11 PORTS CARGO PROFILE AT MAJOR PORTS IN INDIA … (1/2) Cargo at major ports in FY15 Cargo at major ports in FY16 Solid Liquid Container Solid Liquid Container (petroleum, oil (petroleum, oil and lubricants) and lubricants) Share: 47.0% Share: 22.5% Share: 46.4% Share: 20.3% Share: 33.7% Share: 33.3% Iron ore Share: 2.8% Iron ore Share: 2.1% Coal Share: 20.4% Coal Share: 22.7% Fertilizer Share: 2.8% Fertilizer Share: 2.6% Other cargo Share: 20.9% Other cargo Share: 18.9% Source: Ministry of Shipping; TechSci Research Note: Other cargo includes Fertiliser Raw Material (dry) and food-grains DECEMBER 2016 For updated information, please visit www.ibef.org 12 PORTS CARGO PROFILE AT MAJOR PORTS IN INDIA … (2/2) Between FY07– FY16, cargo traffic grew at CAGR 3 per Cargo traffic at major ports (MMT) cent Over FY07–16, CAGR in the volume of different segments 123.18 was as follows– 119.4 114.1 101.2 120.1 114.6 93.1 119.8 92.3 Solid cargo was 2 per cent 73.2 202.3 175.1 188.9 179.1 179.1 176.1 187.2 168.7 185.9 Liquid cargo was 3.1 per cent 154.3 Container cargo was 6 per cent 273 284.7 276.6 261.2 260.9 281.18 258.2 253.5 239.9 235.9 Cargo traffic during FY16 for solid, liquid, and container cargo was 281.18, 202.3 and 123.18 MMT, respectively FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 During April-October 2016, cargo traffic at 12 major ports in Solid Liqiud Container the country was reported at 370.04 MT, showing a growth of Source: Ministry of Shipping; Indian Ports Association (IPA), TechSci Research 6.27 per cent over the same period during the previous year Note: Other cargo in Solid includes fertiliser raw material (dry) and food-grains DECEMBER 2016 For updated information, please visit www.ibef.org 13 PORTS INCREASE IN CAPACITY OVER THE YEARS Capacity and utilisation at major ports (MMT) Capacity at major ports grew to 965.36 MMT in FY16, 1200 120.00% implying a CAGR of 7.5 per cent since FY07 1000 100.00% Despite capacity increasing, utilisation rates have been gradually coming down post the global economic 800 80.00% meltdown in FY08 600 60.00% Utilisation rates of major ports in India are much above 400 965.36 40.00% world’s average 871.52 800.52 744.9 689.8 670.1 616.7 574.8 532.1 200 504.8 20.00% As of November 2016, 12 Major Ports were identified under Sagarmala project, for cargo handling till 2035.