[av_heading heading=’Vizag port doubles iron ore capacity at Visakhapatnam terminal’ tag=’h3′ style=’blockquote modern-quote’ size=” subheading_active=’subheading_below’ subheading_size=’15’ padding=’1′ color=” custom_font=”][/av_heading]
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03/10/17
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Essar Ports, the country’s second-largest private port operator, is almost doubling its iron ore handling capacity at its Visakhapatnam terminal to benefit from the growing demand for steel.
Essar Ports, which was delisted from the stock exchanges two years ago, is expanding its dry cargo handling capacity at the east coast terminal to 23 million tonnes from 12.5 million tonnes.
The expansion, which is nearing completion, comes at an investment of Rs 830 crore. Of this, Rs 560 crore was financed through debt and the balance Rs 270 crore through equity.
Essar Ports, controlled by the Ruia brothers, took over the iron ore handling facility at the Visakhapatnam port from the central government in May 2015 on a build-operate-transfer basis for 30 years. Towards this, it had made an upfront payment of Rs 185 crore. In addition to that, Essar Ports has an agreement to pay a share of the revenue to the Visakhapatnam Port Trust.
The anchor customer of the Visakhapatnam terminal is Essar Steel. The steel company, however, is not in good financial condition and is facing bankruptcy proceedings. At the same time, Essar Ports’ Visakhapatnam terminal is expanding its third-party customers both within and outside of India.
According to World Steel Association, demand for steel in India is expected to grow at 6 to 7% in the next two years (through 2017 and 2018) compared to 4% in 2016. India remains a bright spot within the global steel industry.
Rajiv Agarwal, MD of Essar Ports, said that once the Visakhapatnam terminal’s expansion is completed, it will have one of the highest loading rates (8,000 tonnes per hour) for an Indian port. Agarwal added that it has significant potential to increase the terminal’s share of third-party cargo business to more than 40%.
Besides Visakhapatnam, Essar Ports operates terminals at Hazira, Salaya, Vadinar (Gujarat) and Paradip (Odisha) ports. In fiscal 2017, Essar Ports recorded a 25% growth in cargo traffic at 73 million tonnes. Its debt and operating profit stood at Rs 2,500 crore and Rs 1,000 crore respectively. Agrawal said that the company’s debt will rise by another Rs 500 crore in fiscal 2018 and its operating profit is expected to be about Rs 1,300 crore during the said period.
Source-TOI
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