The acquisition of Kattupalli Port from Larsen and Toubro Ltd (L&T) by the Adani group is expected to change the dynamics of the port business in the Eastern Coast, say industry experts. With Kattupalli Port in its bag, the Adani group gains an important presence in the Eastern Coast targeting the Southern market. The Adani group was operating a terminal in Kattupalli Port and now becomes the owner of the port. Though a minor player till now, the Kattupalli Port, under the Adani group may not continue so and will soon make Chennai Port and Kamarajar Port sweat for business, industry experts said.
Boasting of faster turnaround, competitive rates, flexibility in handling different cargoes and decision-making, private ports like Kattupalli can be attractive compared to government-owned ports are time lags in modifying charges in response to market fluctuations.
The Gujarat-based Adani group is a big private player in the Indian port sector with a presence along the Indian Coast on the West and East. On the Western Coast it is present in – Mundra Port, Dahej Port, Hazira Port, Vizhinjam Port and terminals in Tuna, Murmugao.
On the eastern coast the Adani group is present in Dhamra Port, Kattupalli Port and terminals in Kamarajar Port and Vishakapattnam Port.
According to L&T, the Adani group will pay Rs 1,950 crore for the Kattupalli Port.
The Adani group said Kattupalli port is one of the most modern ports in India emerging as Chennai’s new gateway for export-import trade in Chennai/Bangalore region and provides a whole new dimension of services with speed and sophistication.
Amongst the many advantages of Kattupalli port is its unique location. It is located 30 kilometers towards north of Chennai and has connectivity with hinterland of North Tamil Nadu, Chennai, Bangalore region and South Andhra Pradesh – locations which are highly industrialised, the Adani group said.
There is also the vacant land of 322 acres offering ample space for future expansion of port to facilitate trade requirements, Adani group said. Experts said owing a port enables the owner to offer storage facilities for the clients and earn revenue.
Now the Kattupalli port has two berths with quay length of 710 meters, six quay cranes, 15 rubber tyred gantry cranes and 5,120 ground slots with the capacity to handle 1.2 million TEUs per annum. “Adani Ports is committed to make Katupalli port one of the largest ports in southern India. We are going to start our construction to diversify the cargo of the port and will be adding 40 MMT of new capacity in next three years. We are confident that with our superior infrastructure and efficient handling of cargo we will be able to reduce logistics cost of industries in the region and be one of the engines of growth,” Karan Adani, CEO, Adani Ports and Special Economic Zone (APSEZ) said.
APSEZ plans to transform Kattupalli port into a multi-commodity port to handle cargoes like containers, automobiles, break bulk, general cargo, liquid cargo and project cargo.
According to Adani, diverse cargo is now being handled at Kattupalli Port.
The construction of liquid tank farms started with capacity of 60 KL will be completed in 2019, Adani group said. This strategy will be a game-changer in the port business in this part of the market as Chennai Port and Kamarajar Port handles the same cargoes.
Being a private sector port, the Kattupalli Port has the advantage of flexibility and speed in deciding the commercial terms which may not be there for Chennai Port and Kamarajar Port. That aside, with a presence along the Indian coast, Adani group will get good business from its clients.
According to experts, in the short-term the fight between Kattupalli Port, Chennai Port and Kamarajar Port will be for container traffic. The volume of containerised cargo in India is low which offers scope for further growth.When the market grows, there will be business for all the players, an expert said.