Essar puts shipping, ports firm on fast track growth
After scaling up its energy and steel businesses to significant levels, the diversified Essar Group has put its shipping, ports and logistics business on fast track growth mode to emerge as India’s biggest integrated logistics service provider.business Updated: May 27, 2010 22:24 IST
After scaling up its energy and steel businesses to significant levels, the diversified Essar Group has put its shipping, ports and logistics business on fast track growth mode to emerge as India’s biggest integrated logistics service provider.
The group’s listed firm Essar Shipping, renamed as Essar Shipping Ports and Logistics Ltd (ESPLL), has been transformed from a pure shipping company into an integrated logistics provider with port, oil field services and logistic divisions, growing from a Rs 1,600-crore company in 2007 to a Rs 3,000-crore entity now.
ESPLL has lined up investments in both coastal Gujarat and Orissa to set up large ports and logistic parks as well as procure vessels and oilrigs. For FY 2010-11, it has finalised capital investment plans of Rs 4,875 crore, which would be funded with a mix of debt and equity.
Of this, Rs 1,000 crore has been earmarked for acquisition of ships, Rs 1,000 crore for the drilling business and the balance Rs 2,875 crore for port building, the thrust area of the company, said senior officials.
“We are on target to add 116 MTPA port capacity by 2013 with total capital investment of $ 1.8 billion (Rs 8,550 crore). We will be adding 14 more ships to the present fleet strength of 25 vessels and we are hungry for more inorganic growth,” said V Ashok, director, ESPLL.
Despite challenging business environment the company reporting net profit of Rs 94 crore for the year ended March 31, 2010 as compared to Rs 77 crore last year, up 21 per cent. It reported top line growth of 18 per cent during the year.
“We are growing this company to the next level of growth. This is a fully integrated logistics company and unique in the world. We are also strengthening the management structure,” said Sanjay Mehta, managing director, ESSPL.
Mehta has decided to step down as MD to spend more time in London and to be with group vice chairman Ravi Ruia to further Essar’s global ambitions.
The group has now named Rajiv Agarwal as the CEO and whole time director of ESPLL and has been nominated as MD.