Essar Shipping, Ports and Logistics Ltd (ESPLL, India), which is in the process of demerging its ports and shipping businesses into two entities, is concentrating on the ports sector. It has drawn up an investment plan of Rs 3,300 crore in the next three years to double its cargo handling capacity. according to Exim News Service.
After the demerger, the existing company will be Essar Ports and the new entity, Essar Shipping, which will handle its shipping, offshore and logistics businesses and will be listed.
With the company all set to make substantial investments in both these businesses, it has proposed to create two entities to follow independent financing and growth plans, Mr Rajiv Agarwal, CEO and Managing Director of ESPLL, said.
"After the annual general meeting (AGM) approval of the demerger proposal last year, the required court hearing is scheduled on January 27 and we expect to complete the process by February. A month after that we will get the new entity, Essar Shipping, listed."
The company, which has invested about Rs 5,700 crore for creating port infrastructure envisaging handling of dry bulk and liquid cargoes so far, has already tied up finances for the fresh investments of Rs 3,300 crore.
With this investment, the company's cargo handling capacity would rise from the present 76 million tonnes to 158 million tonnes by 2012-13, making it the second biggest port operator after Mundra.
"We will end the year with a throughput of about 42 million tonnes, generally the capacity utilisation rate in the ports sector is between 70 and 75 per cent. Next fiscal, we expect to touch a throughput of 70 million tonnes, and capacity of 124 million tonnes," Mr Agarwal elaborated.
The company expects to earn revenues of about Rs 750 crore from the ports business this fiscal, targeting a top line growth of about 70 per cent for 2011-12.