It is a modest investment in terms of money, but for Eddy Bruyninckx, CEO of the Port of Antwerp, it is a strategically important alliance. The second largest port in Europe recently picked up a four per cent stake in Essar Ports, a listed company, for Rs 175 crore.

Bruyninckx, who was in Mumbai recently with his team to wrap up the deal, believes the tie-up will pave the way for greater growth opportunities for Antwerp Port in India and increase the flow of cargo from and to his port.

“We are now studying our partner’s projects. The first thing is to identify areas where exchange of expertise and technology is required,” Bruyninckx said in a conversation with Business Line .

The Ruias-promoted Essar Ports has two operational ports — at Hazira and Vadinar — and a couple of other projects under implementation. The promoters currently hold 85 per cent stake in the company, which needs to be diluted by 10 per cent by June next year. Until then, Antwerp will hold its stake in the form of Global Depository Receipts.

Long-term strategy

For Antwerp Port, this is the first investment by its international investing arm in India. The Port is owned by the City of Antwerp, but its terminals are run by private operators. It handled 187 million tonnes of cargo last year.

“The tie-up with Essar is not merely a financial investment, it is a long–term strategic alliance,” said Bruyninckx.

“We will bring in global best practices in cargo handling, port management and training. We will offer the latest technology, equipment and systems to ensure higher productivity,” said Bruyninckx, who has been the CEO of Antwerp Port for 20 years.

To begin with, the focus will be on Hazira, where Essar has a 30 million-tonne dry and break-bulk terminal. “Steel is an important cargo for both of us. Essar has been exporting steel to Europe and Antwerp is the first dedicated steel terminal in Europe. We handle 10 million tonnes of steel annually,” said Bruyninckx

Capacity expansion

The tie-up also covers Essar’s other projects. Essar is setting up two other ports — one in Salaya in Gujarat and another at Paradip.

Essar Ports plans to expand its annual cargo handling capacity to 158 million tonnes by 2014, from 88 million tonnes now. With this, the port also wants to bring down the share of captive cargo from 97 per cent to 75 per cent.

Though the port mainly handles captive cargo, it has been faring well. Its net profit grew by 73 per cent for the quarter ended June 30, 2012.

“The tie-up with Essar will not change our focus in India of getting more cargo to Antwerp.” The Port of Antwerp has two representative offices in India — in Mumbai and Pune. In 2011, the cargo from India to Antwerp grew by 13 per cent to over six million tonnes.

“So far, the traffic from India has been steady. In foreign trade, India is Belgium’s tenth largest partner and we expect the volume of bilateral trade to go up” said Bruyninckx.

e-platform

To facilitate the flow of cargo, the Antwerp Port is building an e-platform to improve communication between logistics operators in both the countries. This is being done in partnership with multi-modal transport operators here.

“We have appointed a project manger for developing this platform. We are also bringing freight forwarders from Antwerp to Mumbai to have an interaction with their counterparts here”.

Antwerp is not interested in running port terminals in India. The focus is on consultancy, training and providing technical know-how. So far, more than 200 persons from Indian port and logistics firms (from both the public and private sectors) have been trained at Antwerp.

Bruyninckx sees a lot of scope for Indian private investments in logistics ventures and warehousing facilities in Antwerp. Antwerp has 5.5 million square metres of covered warehousing facilities. Besides the port is now expanding its area for shore-based logistics activities.

kurup.nk@thehindu.co.in

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