- Essar Ports (EPL) was demerged from Essar Shipping and Ports Ltd (ESPLL) in June 2011. The existing company operates only the port business.
- The company enjoys significant revenue visibility on account of long-term take or pay agreements with its anchor clients. Most of the projects are progressing well and completion of Paradip CQ3 berth would generate higher volumes and catalyse growth in revenue and profitability.
- Significant value creation is expected as new capacities get commissioned and cargo traffic gains traction over the next couple of years.
- Vadinar: Liquid cargo port (58 MT): Vadinar Oil Terminal Ltd (VOTL) and Vadinar Port Terminal Ltd (VPTL) operate all-weather, deep-draft port and terminal facilities to handle receipt, storage and dispatch of crude oil and petroleum products at Vadinar in Jamnagar, Gujarat. This port is a captive port established to service Essar Oil’s refinery in Jamnagar. The port can handle three vessels at a time and the facilities include product port, crude oil and petroleum product tankages, single point mooring facility and cross country and sub sea pipelines, including rail and road connectivity. The single point mooring is located 8 km in the sea and is connected by subsea pipelines and is capable of handling VLCC vessels while the jetty has the capability to handle two Aframax vessels simultaneously.
- Hazira: Dry cargo port (50 MT): Hazira is a 50 million tonnes (MT) all weather, deep-draft dry bulk port in Gujarat and commenced operations in April, 2010. The facilities include a dedicated all-weather channel and 550 metre long jetty capable of handling up to 105,000 dwt bulk carriers. The port handled import of iron ore, pellets, coal, limestone and export of finished steel products.
- Other Port/terminal details (Commissioned and under construction):Salaya: Dry cargo port (20 MT),Paradip CQ3: Dry cargo port (16 MT),Paradip Coal: Dry cargo port.
- During FY12, EPL’s anchor clients, namely, Essar Steel and Essar Oil completed their expansion of capacities. Essar Steel increased its capacity from 4.6 mmtpa to 10 mmtpa, while Essar Oil increased its capacity from 14 to 18 mmtpa. The completion of expansion plans of anchor clients augurs well for EPL. Revenues are expected to increase at a rapid pace in line with expansion of port capacity.
- EPL has already commissioned 88 MMT of port capacity (58 MMT at Vadinar and 30 MMT at Hazira) in the last few years. Going ahead, the port capacity would be further increased to 158 MMT by FY14 with the commissioning of Hazira II, Salaya, Paradip CQ3 and Paradip Coal berth. This would provide revenue growth and also catapult EPL.
- The ports sector in India has grown at a CAGR of 10% in the last 10 years. However, in the last 2 years, growth in the ports sector has been below its potential due to imposition of higher export duty on iron ore and higher railway charges for transportation of iron ore. Growth of the port sector has also been affected by rise in prices of imported coal. However, these issues are expected to be temporary in nature and the port sector growth story is expected to remain intact in the long run.
- As per Maritime Agenda 2010-20 published by the Ministry of Shipping, port trafﬁc is expected to reach to 2,495 MMT by 2020 from 850 MMT in 2010. As the economy grows, port trafﬁc will increase and more investment opportunities will be created in this sector. Considering high capacity utilisation of existing port assets and expected higher trafﬁc growth in future, new capacity addition in ports will have good utilisation and the port sector will remain an attractive investment destination.
Projects Completed: The Company commissioned the state of the art 16 MMTPA Dry Bulk Terminal at Paradip, with a fully mechanised ship loading system with a capacity of 5,000 tons per hour. It is one of the most modern terminals of its type in India, connected to the stockyard by a 9 km long covered conveyor system.
The Company also completed the construction of 3 HSD tanks of capacity 180,000 KL during the year at Vadinar.
Operations on track:
• Essar Oil completed expansion of 20 MMTPA reﬁnery in June 2012 and accordingly, the Vadinar terminal is now operating at an enhanced run-rate of 10.5 MMT per quarter (42MMTPA).
• During FY13, the company’s terminals handled a record 683 ships, as against 514 ships handled for the corresponding previous year.
Progress of the project under implementation:
• Progress of the construction of a 20 MMTPA coal berth at Salaya is as per plan. The project is 59% complete. Piling and Decking works of the Jetty and Approach trestle to Jetty have been completed. Bund Work has started. Ship loader erection is completed and Unloaders erection is under progress. Stackyard is operational with two stacker cum reclaimers and Conveyor fabrication is under progress.
• Construction of a deep draft coal terminal at Paradip is expected to commence during FY14. Environment clearance and forest clearance have been received and the project is expected to start once the land for construction is handed over by Paradip Port Trust.
As on March 31, 2013, the following were the subsidiaries of the Company:
1. Vadinar Oil Terminal Limited (VOTL)
2. Vadinar Ports & Terminals Limited (a subsidiary of VOTL)
Outstanding GDRs / ADRs /Warrants or any convertible instruments: As on March 31, 2013 there are 2,800 Foreign Currency Convertible Bonds (FCCB’s) aggregating US$ 39,999,998 which can be converted into equity shares of the Company at a conversion price of Rs.91.70 per share. As per the terms of the offering, the US$ - INR conversion rate has been ﬁxed at 1 US$ = 46.94 INR. These FCCB’s are listed on the Singapore Exchange Securities Trading Limited.
As on March 31, 2013 there are 17,432,446 Global Depository Shares which can be converted into equity shares of the Company as per the terms of the offering.
Investments in equity shares (unquoted, fully paid up )
Trade investments (valued at cost):
(a)Investments in equity shares (unquoted, fully paid up) Investment in subsidiaries: Rs.1,31,147.08 lakhs (As at 31 March 2013):
- 45,000, equity shares of Rs.10/- each of Essar Paradip Terminals Limited.
- 37,00,000, equity shares of Rs. 10/- each of Essar Bulk Terminal Limited
- 7,86,54,397, equity shares of Rs 10/- each of Vadinar Ports & Terminals Limited
- 1,04,61,42,000, equity shares of Rs 10/- each of Vadinar Oil Terminal Limited.
- 30,04,875, equity shares of Rs 10/- each of Essar Bulk Terminal (Salaya) Limited.
- Nil (PY 11,55,00,000), 0.01% compulsorily convertible cumulative participating preference shares of Rs. 10/- each of Essar Bulk Terminal Paradip Limited.
- 3,29,30,000, 0.01% optionally convertible redeemable cumulative preference share of Rs.10/- each of Essar Bulk Terminal Limited.
- 7,90,22,903, 0.01% fully convertible cumulative preference shares of Rs 10/- each of Essar Bulk Terminal Limited.
- 12,99,84,850, 0.01% compulsorily convertible cumulative participating preference shares of Rs 10/- each of Essar Bulk Terminal Limited.
- 20,50,73,630, 0.01% compulsorily convertible cumulative participating preference shares of Rs 10/- Each of Essar Bulk Terminal ( Salaya) Limited.
- 90,00,000, 0.01% compulsorily convertible cumulative participating preference shares of Rs. 10/- each of Essar Paradip Terminals Limited.