market research report : container logistics (cfs & icd) market in india 2012

Insert Cover Image using Slide Master ViewDo not distort

Container Logistics (CFS & ICD) Market IndiaContainer Logistics (CFS & ICD) Market – India

July 2012

Executive Summary

Market

Container cargo traffic is estimated to reach xx mn TEU by FY2016 with 15% CAGR

ICD: Handles 60 % of containerized cargo

CFS: Handles 40% of containerized cargo

Provides various services : Cargo consolidation, distribution as well as custom clearance activitiesg ,

Drivers & Challenges

Drivers– Growth in Containerized Cargo– Shift of Custom Activities outside the Port Area– Higher Margins in Comparison with Other

Challenges– High Costs Entailed for the Development of a Facility

– Archaic Procedures for the Movement of C t i i d CChallenges Logistics Activities

– Construction of Dedicated Freight Corridor

Containerized Cargo

Government

• Investment in Logistics Infrastructure• Maritime States & Ports in India• Container Traffic at Indian Ports

• Planned Investment on Projects at JN Port till 2019‐20

• Future Expansion Projects at JN Port

Major Players

Government Initiatives

• Container Traffic at Indian Ports• Container Terminal Privatization Success• Logistics Support at JN Port – India’s Largest Container Port

Future Expansion Projects at JN Port • Future Expansion Projects at JN Port • Projects in Progress at JN Port

Competition

Major Players

Allcargo Logistics LimitedContainer Corporation of India Ltd.

(Concor)

Gateway Distriparks Ltd

(GDL)

Sical Logistics Ltd Adani Agri Logistics Limited Boxtrans Logistics India Services

Pvt. Ltd.

2

Central Warehousing Corporation

CONTAINER LOGISTICS (CFS & ICD) MARKET IN NDIA 2012.PPT

•Introduction

M k t O i•Market Overview

•Pre requisite & Regulations

G t I iti ti•Government Initiative

•Foreign Investment

M k I fl•Market Influencers

•Improvement Needs at Dry Ports

C i i•Competition

•Strategic Recommendation

d

3CONTAINER LOGISTICS (CFS & ICD) MARKET IN NDIA 2012.PPT

•Appendix

SAMPLE Evolution of Containerization ‐ India

2008

1993

1995

1997

1994

D l t C

Development

G

1993

1981Development D

Development E

Development F

Development A

Development B

Development C1977

Development A


Value Chain

Producer

Logistics Market – Value Chain

CWC, SWCCFS, ICD

Logistics Park

UnloadingDe‐stuffingClearing

Road, Rail, Sea, Air, pipeline

Packaging Warehousing Repacking DeliveryTransporting

LoadingStuffingClearing

Consumer

Container Logistics Market – Supply ChainContainer Logistics Market Supply Chain

PortContainer handling

& StorageFactory

Rail/Road Haulage Delivery as FCLCFS/ICD

Stuffing/De‐stuffing of Container

Goods Handling

Delivery as LCL (Less than container load)

5

Warehouse & Storage

Note: ICD – Inland container depot, CFS – Container freight station,LCL – Less than container load, FCL – Full container load


India’s container volume is estimated at 15 mn TEUs by 2016, with expected shift in volume to the newer ports

•Container logistics market is estimated to reach xx mn TEUs in FY2016 with a CAGR of 15% from xx mn TEUs in

Container Logistics – Overview (2/2) Market Size

a

mn TEU

14 9%20‐‐ The market was valued at around INR xx bn in 2011 of which CFS/ICD accounted for 1/3 share

• ICD/CFS facilities have been rising due to increase in port traffic and containerization level in India

b

c

14.9%

port traffic and containerization level in India• CFS accounts for 40% of the container load while ICD accounts for 60%

• It offers handling and temporary storage services for containerized cargo being imported and exported Difference between ICD and CFS

0

FY2016eFY2015eFY2014eFY2013eFY2012eFY2011

Less than container load – Cargo arriving from different consignors; has to be stuffed/de‐stuffed into/from containers Full container load – Containers that are stuffed in factories and are ready to be shipped

• These establishments also act as a custom clearance

Difference between ICD and CFSICD CFS

Location

In the interiors, away from the servicing ports

It is an off dock facility located near the servicing portsThese establishments also act as a custom clearance

hub• Chennai has the maximum CFS with 28 in operation By 2018, the combined container traffic at Chennai, Ennore and L&T's Katupalli ports will increase from 1.6 mn TEUs to

d 8 TEU

from the servicing ports the servicing ports

Function

Largely deals with full container load which is aggregated for onward

t t f th

Deals with break‐bulk cargo originating/terminating in the immediate hinterland of a port; l d ti ti f

6

around 8 mn TEUs movement to or from the ports

also serves as a destination for custom related activities

Note: Market size corresponds to container cargo traffic at 12 major ports


Strategic Insights

• Insight AEastern ports likely to

dominatedominate

• Insight BDevelopment of container

infrastructure ‐ CFS

• Insight CStrategic location of

container logistics service provider


p

Market Overview ‐ Snapshot

Capital Intensity Entry Barrier Competition Customer Needs Drivers Opportunities

Description

Vertical

Container haulage

xx Xx xx xx xx xx

CFS xx xx xx xx xx Xx

MTO xx xx xx xx xx xx


Container Logistics Infrastructure – Current Scenario

Investment Problem Needs

• xx • xx• xx

Estimated Investment – Future Scenario

Type of Infrastructure

Estimated nos./ demand in next 5‐10

years80

INR bnx1

years

ICD/FTWZ xx nos.

Air Cargo Centres xx lac sq. m.

Agro Warehouses xx mn M.T. 0

20

40

60 x4

x3x2

~ INR xx bn investment is needed for

container logisticsinfrastructure

by 20‐‐

9

Integrated Transport Centres xx nos.

Integrated Transport Centres

Agro Warehouses

Air Cargo Centres

ICD/FTWZ


Major Maritime States & Ports in India

Legend Major PortsTraffic (MT)

2010‐11

% Share wrt to Major

Port's TrafficRank

Kolkata & Haldia xx xx xxKolkata & Haldia xx xx xx

Paradip xx xx xx

Vishakhapatnam xx xx xx

Ennore xx xx xx

Chennai xx xx xx

Tuticorin xx xx xx

Cochin xx xx xx

New Mangalore xx xx xx

Mormugao xx xx xxMormugao xx xx xx

JNPT xx xx xx

Mumbai xx xx xx


Kandla xx xx xx

ICDs in India (1/2)

SI. No Name of ICD Location State (Province)

Rail ICDs with CFSs1 xx New Delhi Haryana2 xx Hyderabad Andhra Pradesh3 xx East Godavari(AP) Andhra Pradesh3 xx East Godavari(AP) Andhra Pradesh4 xx Nagpur Maharashtra5 xx Coimbatore Tamil Nadu6 xx Chennai Tamil Nadu7 xx Belanganj Uttar pradesh8 xx Moradabad Uttar pradesh9 xx Guntur Andhra Pradesh10 xx Mumbai Maharashtra11 xx Bangalore Karnataka12 xx Dist Guntur(AP) Andhra Pradesh13 xx Ahmedabad Gujarat14 xx Guwahati Assam14 xx Guwahati Assam15 xx Madurai Tamil Nadu16 xx Ludhiana Punjab17 xx Kanpur Uttar Pradesh18 xx Aurangabad Maharashtra19 xx Kolkata West Bengal20 xx Jodhpur Rajasthan21 xx Jaipur Rajasthan22 xx Miraje Maharashtra23 xx Balasore Orissa24 xx Bhusawal Maharashtra25 xx Haryana Haryana

11

25 xx Haryana Haryana26 xx Delhi Haryana27 xx Khapa Madhya Pradesh28 xx Tirupur Tamil Nadu


Regulations for Approval of ICDs/CFSs (1/3)

• xxProposals

Approval Procedure of ICD/CFS & its Implementation (1/3)

• xxProposals

• xxApplication

Second Copy of Application

• xx

Before Application Filing • xx


SAMPLE Archaic Legislation

A t 1838xx Act, 1838

xx Act, 1908

xx Act, 1856

xx Act, 1925

xx Act 1917xx Act, 1917

xx Act, 1958

A 1927xx Act, 1927

xx Act, 1963

xx Act 1962

13

xx Act, 1962


SAMPLE Export & Import Cycle w.r.t. ICDs and CFSs

Export Cycle Import Cycle

xx xx

xx

xx

xx xx

xx

xxxx

xx

xx

xxxx

xx

xx

xx

xx


SAMPLE Investment in Logistics Infrastructure

2,000

INR bn

x4

Infrastructure investment in XIth Five Year Plan

597765

1,000

1,500x4

679x3

587

x2

543

x1

795

xx

B

C

D

A

332 400 486 597

48444138736865

0

500

174

2009‐10

143

2008‐09

117

2007‐08

62

2011‐12

52 80208

2010‐11

97E

D

4,000

INR bn

Investment Target Share in Public Private Partnership Opportunity

4 5%8.5% A

1,000

2,000

3,000

y5y4y3

y2y1 4.5%

21.8% 45.0%

E

D

C

B

15

0E

y5

D

y

CBA

20.2%


Planned Investment on Projects ‐ JN Port (20‐‐ ‐ 20‐‐)

Projects till 2020Deepening of Channel / berths etc.

Construction/Reconstruction of Berths / Jetties etc.

Procurement of Equipments

etc.

Rail / Road Connectivity

Works

Other Works

Total

No. of Project xx xx xx xx xx xx

Ongoing Projects Estimated Cost.

(Rs. In Crore)xx xx xx xx xx xx


E ti t dPhase –I (2010‐2012) Estimated Cost.


Phase I (2012 2017)


EstimatedPhase –I (2012‐2017) Estimated Cost.


Phase –I (2017‐2020)


Estimated ( )Cost.


Total Projects (Ongoing + New)


Estimated Cost xx xx xx xx xx xx

16

+ New) Cost.(Rs. In Crore)

xx xx xx xx xx xx

Note : Estimated Cost is for the projects proposed to be taken up /under execution during that period


Foreign Investment (2/3)

Investing in Greenfield core infrastructure projects, such as ports

Foreign Investor’s Channel for Entry in India

Setting up wholly owned subsidiaries, representativeoffice, project office, branch office or joint ventures

Making Mergers & Acquisitions in India

With 60 deals in 2006‐11, PE, M&A (both inbound and outbound) in container business has shown a consistent growth

Some Recent Inbound M&A Transactions in India

Acquirer Target Year Segment

xx Chennai Container Terminal 20‐‐ Ports

hxx Ennore Container Freight Station 20‐‐ Ports

xx Gateway Rail Freight Ltd 20‐‐ Rail

xx Chennai Container Terminal 20‐‐ Ports

Recent Developments

17

xx MIV Logistics Private Limited 20‐‐New CFS will be set up

with INR 650 mn investment


Drivers & Challenges

Drivers

Growth in Containerized Cargo

Improvement in Custom Clearance

Challenges

High Costs Entailed for the Development of a Facility

Archaic Procedures for the MovementImprovement in Custom Clearance Activities

Higher Margins in Comparison with Other Logistics Activities

Archaic Procedures for the Movement of Containerized Cargo

Construction of Dedicated Freight Corridor


The rise in containerized cargo traffic has led to the growth in CFSs and ICDs

•Growth in containerized cargo and opening up of container rail transport boosted CFSs and ICDs

• Containerization is growing as the demand for inter modal transport increasing in India

Growth in Containerized Cargo (1/2) Impact

•Growth in EXIM trade coupled with economic growth boosts the growth in container traffic at major ports Containerized cargo capacity is expected to rise to xx mn TEU by 20‐‐

Containerized cargo grew at 14%, which clearly depicts the rising demand for containerized cargo

• The increase in container traffic has led to the development of ancillary facilities: Facility for speedy evacuation of import containers from the port

A set up where the activities such as unitization (standardized packing), stuffing, de‐stuffing and regulatory clearances such as customs formalities can be undertaken

A warehouse to ensure safety & security of air and sea cargo during in‐transit storageA warehouse to ensure safety & security of air and sea cargo during in transit storage

A secure place for storage and transport of empty and loaded marine containers

150,000

th TonnesGrowth in Overall Containerized Cargo

50,000

100,000x% x10x9x8

x7x6x5x4x3x2x1


02009‐102008‐092007‐082006‐072005‐062004‐052003‐042002‐032001‐022000‐01

Traffic at major ports has grown dynamically in recent years with JNPT topping the list in the container segment

Container Traffic Handled at Major Ports

CAGR

Growth in Containerized Cargo (2/2)

Ports 2000‐01 01‐02 02‐03 03‐04 04‐05 05‐06 06‐07 07‐08 08‐09 09‐10CAGR (%)

Kolkata xx xx xx xx xx xx xx xx xx xx xx

Hadia xx xx xx xx xx xx xx xx xx xx xx

Paradip xx xx xx xx xx xx xx xx xx xx xx

Visakhapatnam xx xx xx xx xx xx xx xx xx xx xx

Chennai xx xx xx xx xx xx xx xx xx xx xx

Tuticorin xx xx xx xx xx xx xx xx xx xx xx

Cochin xx xx xx xx xx xx xx xx xx xx xx

New Mangalore xx xx xx xx xx xx xx xx xx xx xx

MMormugao xx xx xx xx xx xx xx xx xx xx xx

Mumbai xx xx xx xx xx xx xx xx xx xx xx

JNPT xx xx xx xx xx xx xx xx xx xx xx

Kandla xx xx xx xx xx xx xx xx xx xx xx

20

Kandla xx xx xx xx xx xx xx xx xx xx xx

Note: Figures in ‘000 tonnesGreen highlights highest CAGR in container traffic at New Mangalore over the period 2000‐01 and 2009‐10Yellow highlights maximum container traffic volume at JNPT over the period 2000‐01 and 2009‐10


Dry Ports ‐ ICDs and CFSs

Exporter located

ICDs and CFSs are also referred as dry ports, as all the custom formalities related to export and import of goods are handled at these locations

Exporter locatedin Delhi

Sends goods to

ICD at Tughlaqabad(operated by Concor)

Goods cleared by Container is sealed the customs

Direct loading onto a vesselh l l h ( )

at Tughlaqabad

Sends goods for

at Jawaharlal Nehru Port (JNP)

Exporter at Delhi is free of his export responsibility in Delhiand

Result

21

and do not come across any custom related difficulties

Note: Location mentioned above are indicative


SAMPLE Player’s Classification using Venn Diagram

ICD/ CFSContainer Haulage

MTO

A B Allcargo Logistics LimitedC D E


A B Allcargo Logistics LimitedC D

F G

E

Major Public Companies ‐ Summary

9 000

10,000

11,000

Net Profit/Loss

Size of the Bubble represents Market Capitalization in INR mn

113,319.0

6,000

7,000

8,000

9,000

3,000

4,000

5,000

,

17,140.9

14,333.9

3,728.10

1,000

2,000

‐1,000

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000

Total income

DBCA

23

Note: All figures are in INR mn and are based on the latest financials available

DBCA


Public: Domestic Company – Player A (1/3)

Company Information Offices and Centres – India

Corporate Address

Tel No.

Fax No.

Website

Year of Incorporation

Products and Services

Ticker Symbol

Stock ExchangeHead OfficeMumbai

Key People


Category Products/Services

Logistics solutions

Name DesignationName Designation


i i l S h K i


Financial Snapshot Key Ratios

Net Profit/LossTotal Income

35858.434381.028803.130000

40000 3000

INR mnINR mn Particulars y‐o‐y change (2012‐11)

2012 2011 2010 2009

Profitability RatiosOperating Margin ‐0.19 8.78% 8.97% 7.61% 8.01%

20836.4

0

10000

20000

30000

0

1000

2000

2012201120102009

Net Margin 0.06 6.54% 6.48% 5.76% 6.24%

Profit Before Tax Margin ‐0.15 8.44% 8.58% 7.77% 8.13%

Return on Equity 0.48 15.42% 14.94% 13.74% 13.07%

Return on Capital Employed 1.52 14.71% 13.18% 13.53% 13.95%

Return on Working Capital ‐11023.91‐

10973.56%50.35% 46.22% 36.95%

Return on Assets 0 32 8 27% 7 95% 8 07% 8 62%

Financial Summary

• The company earned a net profit of INR 2,345.9 mn in FY 2012, as compared to net profit of INR 2.228.7 mn in FY 2011

• The company reported total income of INR 35,858.4 mn in FY 2012, registering an increase of 4 3% over FY 2011

Return on Assets 0.32 8.27% 7.95% 8.07% 8.62%

Return on Fixed Assets 4.55 16.76% 12.20% 19.68% 23.75%

Cost RatiosOperating costs (% of Sales) 0.19 91.11% 90.92% 92.34% 91.90%

Administration costs (% of Sales)

17.24 17.24% 0.00% 6.07% 8.64%

Interest costs (% of Sales) 0 03 1 65% 1 62% 0 68% 1 12%registering an increase of 4.3% over FY 2011

• The company earned an operating margin of 8.78% in FY 2012, a decrease of 0.19 percentage points over FY 2011

• The company reported debt to equity ratio of 0.86 in FY 2012, a decrease of 1.63% over FY 2011

Interest costs (% of Sales) 0.03 1.65% 1.62% 0.68% 1.12%

Liquidity RatiosCurrent Ratio ‐48.94% 1.00 1.95 1.82 2.13

Cash Ratio ‐43.37% 0.26 0.47 0.63 0.83

Leverage RatiosDebt to Equity Ratio ‐1.63% 0.86 0.88 0.70 0.52

Key Financial Performance Indicators

Indicators Value (dd/mm/yyyy)Market Capitalization (INR mn) 17,140.9

Total Enterprise Value (INR mn) 21,432.7

( )

Debt to Capital Ratio ‐20.15% 0.27 0.34 0.24 0.17

Interest Coverage Ratio ‐3.90% 5.39 5.61 11.27 7.20

Efficiency RatiosFixed Asset Turnover 35.97% 2.53 1.86 3.39 3.77

Asset Turnover 3.01% 1.25 1.21 1.39 1.37

Current Asset Turnover 36.26% 5.10 3.74 3.59 3.11

25

EPS (INR) 17.08PE Ratio (Absolute)‐25th June, 2012

7.56Improved Decline


Working Capital Turnover ‐21677.73% ‐1655.74 7.67 7.97 5.86

Capital Employed Turnover 2.23% 2.33 2.28 2.37 2.07

Note: FYC 2012



Key Business Segments Key Geographic Segments

INR mn

cba

INR mn

DF C GBEA

7% 7%

50%

100%

INR mn

83%

10%

83%

10%

94%

6%

28% 27% 29%16%

15%15%4%5%

6% 2%2%2%2%2%

50%

100%16%

30%

INR mn

18%

31%

19%

29%

Business Highlights

0%201020092008

0%30%

2008 2009 2010

29%

Description NewsOverview

ICD/CFS Facilities

Rank

Acquisitions


Major Private Companies ‐ Summary

Size of the Bubble represents Total Assets in 65 000

70,000

Net Profit/Loss

INR mn

45,000

50,000

55,000

60,000

65,000

695,915

25,000

30,000

35,000

40,000

,

5,000

10,000

15,000

20,000

807,015

3,344‐5,000

0

Total income

220,000200,000180,000160,000140,000120,000100,00080,00060,00040,00020,0000‐20,000‐40,000

80

DBCA

27

Note: All figures are in INR mn and are based on the latest financials available

DBCA


Private: Domestic Company – Player B (1/3)

Company Information Offices and Centres – India

Corporate Address

Tel No.

Fax No.

Gurgaon


Website

Year of IncorporationHead Office

Key People


Category Products/Services

Integrated logistics solutions

N D i tiName Designation


i i l S h K i


Financial Snapshot Key Ratios

Particulars y‐o‐y change (2011‐10)

2011 2010 2009 2008

Profitability RatiosOperating Margin 11.33 158.76% 147.43% 85.78% 85.47%

Net Profit/LossTotal Income

1376.61500 0

INR mn INR mn

Net Margin 2.84 ‐39.51% ‐42.35% ‐34.24% ‐12.04%

Profit Before Tax Margin 14.83 ‐3.54% ‐18.36% ‐33.73% ‐13.47%

Return on Equity ‐1.56 ‐17.44% ‐15.88% ‐13.03% ‐2.17%

Return on Capital Employed 6.47 32.09% 25.62% 10.24% 8.61%

Return on Working Capital ‐9.23 ‐47.77% ‐38.55% ‐14.12% ‐32.91%

Return on Assets ‐0.61 ‐7.75% ‐7.14% ‐3.95% ‐1.20%

1376.61169.3

559.6

222.9500

1000

1500

‐400

‐200

0

Return on Fixed Assets ‐0.73 ‐11.84% ‐11.11% ‐19.23% ‐544.86%

Cost RatiosOperating costs (% of Sales) ‐3.12 ‐84.18% ‐81.06% 13.85% 14.36%

Administration costs (% of Sales)

‐0.29 4.97% 5.27% 5.22% 1.90%

Interest costs (% of Sales) ‐24.46 8.02% 32.48% 0.00% 0.00%Financial Summary

0 ‐6002011201020092008

Interest costs (% of Sales) % % % %

Liquidity RatiosCurrent Ratio ‐10.05% 6.57 7.31 9.15 3.87

Cash Ratio 3.39% 6.02 5.82 8.58 2.69

Leverage RatiosDebt to Equity Ratio 4.88% 1.25 1.19 2.31 0.81

b i l i

• The company incurred a net loss of INR 543.89 mn in FY 2011, as compared to net loss of INR 495.22 mn in FY 2010

• The company reported total income of INR 1,376.65 mn in FY 2011, registering an increase/decrease of 17.7% over FY 2010

Debt to Capital Ratio 2.17% 0.56 0.54 0.70 0.45

Interest Coverage Ratio 311.83% 22.96 5.57 N.A. N.A.

Efficiency RatiosFixed Asset Turnover 20.93% 0.26 0.21 0.56 45.17

Asset Turnover 23.15% 0.17 0.14 0.11 0.10


• The company earned an operating margin of 158.76% in FY 2011, an increase of 11.33 percentage points over FY 2010

• The company reported debt to equity ratio of 1.25 in FY 2011, an increase of 4.88% over FY 2010

29

Working Capital Turnover 40.63% 1.04 0.74 0.41 2.73

Capital Employed Turnover 24.62% 0.38 0.31 0.38 0.18

Improved Decline



Business Highlights

Description News

Overview

ICD Facilities

Investment Plans

Projects


Strategic Recommendation (1/2)

Investment Recommendation for Investors

Greenfield ICDs Modern Logistic cumTransport Centers

CFSs / ICDs Supply Chain Management pg

• xx • xx • xx • xx


Thank you for the attentionThe Container Logistics (CFS & ICD)Market – India report is part of Netscribe’s Transport & Logistics Series.For more detailed information or customized research requirements please contact:Phone: +91 33 4064 6214Phone: 91 33 4064 6214E‐Mail: [email protected]

Follow us on:

About NetscribesNetscribes is a knowledge‐consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & g g f g p y p p fbusiness research, business & corporate intelligence, content‐management services, and knowledge‐software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes is a one‐stop shop designed to fulfil clients’ profitability and growth objectives.

Disclaimer: This report is published for general information only Although high standards have been used in the preparation “Netscribes” is

32

Disclaimer: This report is published for general information only. Although high standards have been used in the preparation, Netscribes is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes and prior permission is required for guidelines on reproduction.


http://www.facebook.com/researchonindia

https://twitter.com/#!/ResearchOnIndia

http://www.linkedin.com/groups?gid=3280715&trk=myg_ugrp_ovr

http://www.netscribes.com/

market research report : container logistics (cfs & icd) market in india 2012

Business

cfs containerfreightstation

icd inlandcontainerdepot

ofcontainerizedcargomarket

destuffing cfs

cag icd

xxxx xxmto xxxx

icd clearing air

lcl lessthancontainerload