Media Center

News

An accomplished leader

Cargo Connect 16-May-2013
Read More
Top
Allcargo services and facilities strongly entrench our culture

Indian Transport & Logistics News 16-May-2013
Read More
Top
Prof. Ramachandran Joins the Board of Allcargo Logistics

29-Apr-2013
Read More
Top
Allcargo Logistics & Hansa Heavy Lift jointly move first cargo for a petrochemical major

23-Apr-2013
Read More
Top
Allcargo Logistics partners with CII for seminar on Costal Shipping

Daily Shipping Times 18-Apr-2013
Read More
Top
Fun & frolic at Allcargo Premier League

17-Apr-2013
Read More
Top
Eye Check-up camp organised by Allcargo at Koproli, Maharashtra on 28 February 2013

28-Mar-2013
Read More
Top
Allcargo Moves Dearator for Sasan Power Project

The Hindu Business Line (Mumbai) 28-Mar-2013
Read More
Top
Mr. Shashi Kiran Shetty interacting with Business Standard on Allcargo Growth

Business Standard (Pune) 28-Mar-2013
Read More
Top
Allcargo reach out to needy with Medical Support Centre at Sion Hospital

18-Mar-2013
Read More
Top
Voting Results – Court convened meeting held on February 25, 2013

26-Feb-2013
Read More
Top

Allcargo Logistics Ltd. announced its un-audited financial results for the quarter ended December 31

13-Feb-2013

EARNINGS RELEASE

TOTAL REVENUE FOR NINE MONTHS AT RS 3,007 CRORE – YOY INCREASE OF 11%

OPERATING PROFIT FOR NINE MONTHS AT RS 950 CRORE – YOY INCREASE OF 9%

MTO OPERATIONS – REVENUE MAINTAINED AT RS 810 CRORE

MTO OPERATIONS – EBIT AT RS 385 CRORE – YOY INCREASE OF 13%

BUY BACK OF SHARES – COMPLETED 79% OF BUY BACK

February 12, 2013, Mumbai: Allcargo Logistics Ltd. today announced its un-audited financial results for the quarter ended December 31, 2012.

The performance highlights are:

Consolidated Results – Q3 FY13

Total revenue of Rs. 977.9 crore for the quarter ended December 31, 2012, as against Rs.1,016.1 crore for the corresponding previous period, a decrease of 4%, mainly on account of decline in revenues from the P&E business

The operating profit was maintained at Rs. 308.0 crore for the quarter ended December 31, 2012, as against Rs. 309.1 crore for the corresponding previous period

EBIDTA of Rs. 81.2 crore for the quarter ended December 31, 2012, as against Rs. 117.2 crore for the corresponding previous period, a decrease of 31%, mainly on account of 140% increase in provision for doubtful debts

The profit after tax was Rs. 36.1 crore for the quarter ended December 31, 2012, as against Rs. 50.6 crore for the corresponding previous period, a decrease of 29%

EPS for the quarter ended December 31, 2012 was Rs 2.9 for a face value of Rs. 2 per share

Consolidated Results – 9M FY13

Total revenue of Rs. 3,007.1 crore for 9 months ended December 31, 2012, as against Rs.2,699.1 crore for the corresponding previous period, an increase of 11%

Operating profit of Rs. 949.8 crore for 9 months ended December 31, 2012, as against Rs. 867.4 crore for the corresponding previous period, an increase of 9%

EBIDTA of Rs. 341.3 crore for 9 months ended December 31, 2012, as against Rs. 343.2 crore for the corresponding previous period, a decrease of 1%, mainly on account of over 200% increase in doubtful debts

The profit after tax was Rs. 152.9 crore for 9 months ended December 31, 2012, as against Rs. 172.9 crore for the corresponding previous period, a decrease of 12%.

EPS for 9 months ended December 31, 2012 was Rs 11.9 for a face value of Rs. 2 per share

Business Performance:

Allcargo operates primarily in three segments, viz., Multimodal Transport Operations, Container Freight Stations Operations and Project & Engineering Solutions. These are consolidated business segments.

Container Freight Stations (CFS)/ Inland Container Depot (ICD) Operations:

· This segment operations are involved in import / export cargo stuffing, de-stuffing, customs clearance and other related ancillary services to both, importers and exporters

· The CFS facilities are located near JNPT, Mundra, and Chennai ports. Allcargo is amongst the top three CFS operators at JNPT and Chennai (except captive CFSs) and among the top five at Mundra

· The total capacity of the CFSs at the end of December 31, 2012 is 4,41,000 TEUs per annum

· The ICDs are located at Dadri and Pithampur (Indore) and have a total capacity of 88,000 TEUs per annum

· This business segment clocked total volumes of 48,561 TEUs for the quarter ended December 31, 2012, as against 63,290 TEU for the corresponding previous period, a decrease of 23%

· The total revenue for the quarter ended December 31, 2012 was Rs 75.9 crore as against Rs 77.2 crore for the corresponding previous period, a slight decrease of 2%, despite 23% decline in total volumes

EBIT was Rs. 27.5 crore for the quarter ended December 31, 2012, as against Rs. 32.7 crore for the corresponding previous period, a decrease of 16%

Multimodal Transport Operations (MTO):

· MTO segment involves NVOCC (Non Vessel Owning Common Carrier) operations related to LCL (Less than container load) consolidation and FCL (Full container load) forwarding activities in India and across the world through its wholly owned subsidiary ECU Line

· Allcargo is amongst the leading players in the global LCL consolidation market with a strong network across 62 countries and 143 own offices covering over 4,000 port pairs across the world

· The business clocked total volumes of 70,338 TEUs for the quarter ended December 31, 2012 as against 68,503 TEUs for the corresponding previous period, an increase of 3%, despite slowdown in global trade

· The total revenue for the quarter ended December 31, 2012 was Rs 809.6 crore as against Rs 816.6 crore for the corresponding previous period, a decrease of 1%

EBIT was Rs. 38.5 crore for the quarter ended December 31, 2012, as against Rs. 34.1 crore for the corresponding previous period, an increase of 13%

Project & Engineering Solutions (P&E):

· Project & Engineering Solutions segment provides integrated end-to-end project, engineering and logistic services through a diverse fleet of owned / rented special equipment like hydraulic axles, cranes, barges, reach-stackers and ships to carry ODC / OWC cargos as well as project engineering solutions across various sectors.

· The total revenue for the quarter ended December 31, 2012, was Rs. 87.2 crore as against Rs. 107.8 crore for the corresponding previous period, a decline of 19%

The business reported a loss before interest and tax of Rs 15.2 crore for the quarter ended December 31, 2012 as against a profit of Rs 17.8 crore for the corresponding previous period. This was mainly on account of 18% decline in revenue and over 200% increase in provision for doubtful debts

About Allcargo Logistics Limited

Allcargo Logistics Ltd., part of The Avvashya Group, is a leading multinational company providing integrated logistics solutions. The company offers specialized logistics services across Multimodal Transport Operations, Container Freight Station Operations and Project & Engineering Solutions. Benchmarked quality standards, standardized processes and operation excellence across all the services and facilities, have enabled Allcargo Logistics Ltd. to emerge as the market leader in all these segments.

The company currently operates out of 143 own offices in 62 countries and gets supported by an even larger network of franchisee offices across the world. Allcargo is today one of India's largest publicly owned logistics companies, listed on the Bombay Stock Exchange (BSE: 532749) and The National Stock Exchange of India (NSE: ALLCARGO).

With a consolidated turnover of Rs. 4,325 crore, profit after tax of Rs. 285 crore for the 15 months ended 31st March 2012, Allcargo . has demonstrated superior performance and significant growth prospects in the past years.

For more information, please contact:

Neeraj Sharma

Allcargo Logistics Ltd

Tel: 022 - 66798266

Email: neeraj.sharma@allcargologistics.com

Sonal Zode / Parvathi Nair

Adfactors PR

Tel: 98927 45065 / 99209 27858

Email: sonal.zode@adfactorspr.com

Parvathi.nair@adfactorspr.com

Top

Court Convened Meeting of Equity shareholders of Allcargo Logistics Ltd., is scheduled on 25/02/13

06-Feb-2013
Court Convened Meeting of Equity shareholders of Allcargo Logistics Limited, is scheduled on Monday, February 25, 2013 at 11:00 am.

Read More
Top

Allcargo Logistics Ltd. announced its un-audited financial results for the quarter ended September 3

09-Nov-2012

EARNINGS RELEASE

TOTAL REVENUES AT RS 1,049 CRORE – YOY INCREASE OF 28%

EBIDTA AT RS 142 CRORE – YOY INCREASE OF 26%

MTO OPERATIONS – REVENUE AT RS. 830 CRORE – YOY INCREASE OF 30%

MTO OPERATIONS – EBIT AT RS 57 CRORE – YOY INCREASE OF 57%

NEW CFS AT JNPT – COMMENCED OPERATIONS IN OCTOBER 2012 – TAKING TOTAL INSTALLED CFS CAPACITY TO 4,41,000 TEUS PER ANNUM

BUY BACK OF SHARES – COMPLETED 65% OF BUY BACK

November 08, 2012, Mumbai: Allcargo Logistics Ltd. today announced its un-audited financial results for the quarter ended September 30, 2012.

The performance highlights are:

Consolidated Results – Q2 FY13

· Total revenue of Rs. 1,049.2 crore for the quarter ended September 30, 2012, as against Rs.819.1 crore for the corresponding previous period, an increase of 28%

EBIDTA of Rs. 141.9 crore for the quarter ended September 30, 2012, as against Rs. 112.3 crore for the corresponding previous period, an increase of 26%

· The profit after tax was Rs. 59.2 crore for the quarter ended September 30, 2012, as against Rs. 55.9 crore for the corresponding previous period, an increase of 6%. This was mainly on account of increase in depreciation and in provision for tax

· EPS for the quarter ended September 30, 2012 was Rs 4.6 for a face value of Rs. 2 per share

Business Performance:

Container Freight Stations (CFS)/ Inland Container Depot (ICD) Operations:

· This segment operations are involved in import / export cargo stuffing, de-stuffing, customs clearance and other related ancillary services to both, importers and exporters

· The CFS facilities are located near JNPT, Mundra, and Chennai ports. Allcargo is amongst the top two CFS operators at JNPT and Chennai (except captive CFSs) and among the top three at Mundra

· The total capacity of the CFSs at the end of September 30, 2012 is 3,41,000 TEUs per annum

· The ICDs are located at Dadri and Pithampur (Indore) and have a total capacity of 88,000 TEUs per annum

· This business segment clocked total volumes of 56,921 TEUs for the quarter ended September 30, 2012, as against 62,705 TEU for the corresponding previous period, a decrease of 9%

· The total revenue for the quarter ended September 30, 2012 was Rs 74.4 crore as against Rs 65.8 crore for the corresponding previous period

· EBIT was Rs. 29.6 crore for the quarter ended September 30, 2012, as against Rs. 34.7 crore for the corresponding previous period

· Business Updates/ Achievements/ New developments:

o The new CFS at JNPT commenced operations in mid- October 2012, taking the total installed capacity of the CFSs in India to 441,000 TEUs from 341,000 TEUs per annum

Multimodal Transport Operations (MTO):

· Allcargo is amongst the leading players in the global LCL consolidation market with a strong network across 62 countries and 142 own offices covering over 4,000 port pairs across the world

· The business clocked total volumes of 73,507 TEUs for the quarter ended September 30, 2012 as against 71,259 TEUs for the corresponding previous period, growth of 3%, despite slowdown in global trade

· The total revenue for the quarter ended September 30, 2012 was Rs 830.4 crore as against Rs 640.2 crore for the corresponding previous period, growth of 30%

· EBIT was Rs. 57.3 crore for the quarter ended September 30, 2012, as against Rs. 36.4 crore for the corresponding previous period, growth of 57%

· Business Updates/ Achievements/ New developments:

o The business expanded its scale of operations in the continent of Australia through opening new offices and signing up new franchisees and agents

o Mr. Suryanarayanan has been appointed as CEO of Eculine International

Project & Engineering Solutions (P&E):

· The total revenue for the quarter ended September 30, 2012, was Rs. 122.2 crore as against Rs. 110.4 crore for the corresponding previous period

· The EBIT for the quarter ended September 30, 2012 was maintained at Rs. 23.1 crore as against Rs. 23.2 crore for the corresponding previous period

Awards and Recognitions:

· Allcargo won the MALA Award for in the ‘Heavy Lift Mover of the Year 2012’ category. MALA is a distinguished Maritime and logistics award platform that honors the dignitaries of the logistics industry. Allcargo has been proud recipient of MALA awards for 3 years in a row

· Mr Shashi Kiran Shetty, CMD, was awarded the ‘News Maker of the Year’ award – MALA Awards 2012

· In the MTO business, Allcargo – Ahmedabad was awarded “Third largest volume as LCL Consolidator” handled at ICD Sabarmati, by Container Corporation of India Ltd

· In the P&E business, Allcargo was awarded “Best Shipping Line of the year – Break Bulk Operator” at 1st Gujarat Star Awards, 2012

Stock Market Highlights – General Information and Shareholding Pattern as on September 30, 2012:

Particulars
Exchange Code	BSE: 532749 / NSE: ALLCARGO
No. of Shares Outstanding	127,445,922
Closing Market Price (Rs.)	136.25 / 135.00
Market Capitalization (Rs. Crore)	1,779 / 1,762

Particulars	No of shares	% holding
Promoters	91,134,025	71.5%
Foreign Investors – FIIs, GDRs, NRIs and others	29,884,504	23.4%
Domestic institutions/ Banks/ Mutual Funds	3,449,420	2.7%
Indian Public	2,977,973	2.3%
Total - 6,361 shareholders	127,445,922	100.0%

Conference Call Details:

Conference Name: Allcargo Logistics Ltd Q2 FY13 Earnings Conference Call

Date: Friday, November 9^th, 2012

Time: 2.00 pm IST

Dial-in Numbers:

From India: +91 22 3065 0062 / +91 22 6629 0262

International Toll-free number

USA 1 866 746 2133

UK 0 808 101 1573

Singapore 800 101 2045

Hong Kong 800 964 448

About Allcargo Logistics Limited

Allcargo Logistics Ltd., part of the Avashya Group, is a leading multinational company providing integrated logistics solutions. The Company offers specialized logistics services across Multimodal Transport Operations, Container Freight Station Operations and Project & Engineering Solutions. Benchmarked quality standards, standardized processes and operation excellence across all the services and facilities, have enabled Allcargo Logistics Ltd. to emerge as the market leader in all these segments.

The company currently operates out of 142 own offices in 62 countries and gets supported by an even larger network of franchisee offices across the world. Allcargo Logistics Ltd. is today one of India's largest publicly owned logistics companies, listed on the Bombay Stock Exchange (BSE: 532749) and The National Stock Exchange of India (NSE: ALLCARGO).

With a consolidated turnover of Rs. 4,325 crore and profit after tax of Rs. 285 crore (for the financial year ended March 31, 2012), Allcargo Logistics Ltd. has demonstrated superior performance and significant growth prospects in the past years, thereby attracting quality investors like The Blackstone Group - one of world's leading private equity firms which acquired over 14% stake in the Company.

About the Avashya Group

The Avashya Group has been defined as a corporate that transforms every business it ventures into and brings joy to all its stakeholders. This has been expressed in the tag line "Transformations that Delight". As the organization expands & diversifies into varied industries, they are committed to delivering "Transformation that Delight" in every activity that is embarked upon. This is encapsulated in the logo - The Prism - a device that transforms white light into delightful hues - all equally vibrant yet unique.

Caution Concerning Forward-Looking Statements: This document includes certain forward-looking statements. These statements are based on management's current expectations or beliefs, and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive, technological and/or regulatory factors. Allcargo Logistics Limited is under no obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.

Top

A Moment of Great Pride

28-Jul-2011

Allcargo Global Logistics Ltd has been bestowed with the prestigious “CEO of the Year with HR Orientation” award. Our Chairman & Managing Director, Mr. Shashi Kiran Shetty has received this award at the “Asia’s Best Employer Brand Awards” ceremony held at Singapore.
This award function that took place on the 22^nd July, 2011 was hosted by the Employer Branding Institute; World HRD Congress & Stars of the Industry Group with CMO Asia as a strategic partner.
The jury for the award category included personalities like Mr. Harish Mehta (Chairman & MD – Onward Technologies Ltd., Emeritus Chairman – World HRD Congress & Founder Member NASSCOM; Mr. Michael M’CDonald (Global Chairman, World HRD); Prof. Indira Parikh (President Founder of Liberal and Management Education India’s Iconic HR Leader), to name a few amongst the total 11 people.
Mr. Bhaskar Chatterjee (Secretary to the Govt. of India, Department of Public Enterprises, Ministry of Heavy Industries & Public Enterprises)
and Mr. Donovan Neale-May (Executive Director, Chief Marketing Officer CMO Council) were the chief guests for the event.
The other awardees in the CEO of the Year and CEO with HR Orientation category apart from our Chairman & Managing Director were Dr. Mukesh Aghi (Chairman & CEO, Steria (India) Ltd.), Mr. Omar K. Algham (CEO, Algham Industries, Kuwait), Mr. Susir Kumar (CEO, Intelenet Global Services), Mr. K.V. Srinivasan (CEO, Reliance Commercial Finance) and Ms. Shikha Sharma (MD & CEO, Axis Bank).
Mr. Sachin Anand, Country Manager collected the award on behalf of the MD.
Please join us in congratulating our CMD and wishing him many more laurels for the future.

Top
The Grass Club: Shashi Kiran Shetty

Economic Times ( Mumbai, Delhi & Bangalore) 17-Jun-2011

http://www.youtube.com/allcargologistics#p/u/0/iHGQibGok0M

Allcargo's Shashi Kiran Shetty is a self made man who came to Mumbai to build a career in shipping. Soon he realised his ideas and growth were too far ahead, and just few months ago he fulfilled his dream of buying two ships, in a metaphorical way marking his rags to riches story. He speaks to Shaili Chopra on Tee Time about the challenges on high seas and the impact of karma on his growth story

When you started out, you were not on the radar of any big investor but later came the big boys like Blackstone and picked up stake in your firm.

I think we take life the way it comes and make the most of it. We have been lucky to be in an industry that was growing. Logistics has been seen big growth and at the opportune time, we managed to grow the business and that also gave us the global exposure on how to do business and take it international. We tried to professionalize this business by putting best practices in place. It was in my DNA to get good people so all these moves of getting the big acquisitions and going global has fallen in place.

How did you deal with a business that wasn't traditional sexy but brick and mortar. Was it a challenge sometime?

That's the only business I knew. I knew that there was no other sector I could get in to. I was from Mangalore and I had arrived into Mumbai to make a career of my own. I joined a shipping company and within two years I realised I could do it on my own. I could sense that opportunity that I could seize and deliver. I kept growing, and that made me happy even though it came with challenges of a service industry - people, system, disorganised, multiple geographies and infra and policy bottlenecks etc. It makes you a man of steel to finally deal with this.

But since you are a first-generation company, how is it that you are taking it beyond Shashi Kiran Shetty?

It's never been a one-man company. My brother has been in the business with me since last 20 years and so has been my brother in law

You imbibe from watching some of the business icon around you, who has had an impact on you?

I think I have always looked up to mentors like NR Narayana Murthy who I have always followed. I feel is an ideal icon since he is humble and his ground approach. I believe being humble and nice to people always helps since I am a big believer in karma. When you give good, it comes back to you.

How do you reward yourself?

I try and catch a game of golf and whenever I travel, I try and visit a new course. I enjoyed playing at St Andrews, courses in S Africa, Mauritius and Bangkok and later in Antwerp and Hamburg . I have to often find a partner to play with since I am still convincing my wife to learn the game.

Top
Riding the Tide
Business Today 17-Apr-2011
- Having turned his cargo shipping company into a Rs.2,600 crore giant, Shashi Kiran Shetty now wants to go global. By ANAND ADHIKARI
A remarkable post - liberalisation success in an unusual sector is Shashi Kiran Shetty, 54. Ably assisted by his younger brother and brother-in-law, he has turned his freight forwarding company. Allcargo Global Logistics, into a Rs.2,600 crore giant, the biggest player in the niche segment of those which carry 'less than container loads'.

Shetty, a commerce graduate, reached Mumbai from Bantwal in Karnataka in the early 1980s which entrepreneurship in his blood. Two years of employment in the ship ping business convinced him he could strike out on his own. At 25, using his modest savings of Rs.25,000 he set up his first company TransIndia Freight Services to move cargo.

Brother Umesh. after reaching Mumbai in Shetty's footsteps, spent a few years working elsewhere before teaming up with his elder sibling. "I needed someone I could trust to look after the expensive equipment, especially the cranes." says Shetty. The cranes need regular preventive maintenance. "Soon after Shetty married, and a year later roped in his brother-in-law Adarsh Hegde, a mechanical engineer, who had lost his job after his employers went bankrupt. Hedge too made a brief independent foray before returning to work permanently with Shetty from 1990. "He is our business development and marketing person," says Shetty.

While TransIndia Freight Services confined itself to transporting cargo within the country by road and rail. Allcargo Global Logistics which Shetty began in 1993 - just as liberalisation had begun breathing renewed life into the Indian economy - went into shipping cargo overseas. "It was then that I started recruiting professionals in key positions, since none of us in the family knew the cargo shipping business too well," he says.

Allcargo's business grew quickly as, due to its relatively small size, it displayed an ability to provide quicker service than its rivals. The existing players were not overly interested in shipping small quantities of cargo, which occupied less than a full container. Allcargo also filled this gap. "We had to make the best use of the container box. We were paying for the box anyway whether we filled it nor not," says shetty. He also expanded the business by offering credit facility to select client, which was not the norm then.

How did liberalisation make a difference for Shetty? It brought about a vital change in shipping regulations with the passing of the Multi modal Transportation Goods Act in 1995. It allowed even companies that did not own ships to become registered carriers of goods by sea, using ships belonging to others. Acquiring the licence to do so in 1998, Shetty teamed up with a Belgian company, ECU Line, to collect cargo and aggregate it into full container loads for shipping. Subsequently in 2001. Allcargo acquired a 16.2 percent stake in the company, increasing it in 2005 to 34 percent and a year later, to 100 percent.

Indeed Allcargo was booming helped by the domestic cargo business. "I used the profits of my transportation business to build the shipping business," reveals Shetty. Having consolidated in Mumbai, he expanded the business pan - India with over 5,000 global destinations under his reach.

Slowly, Shetty realised there was still a missing link. "We were totally dependent on poorly maintained government warehouses for storing our goods." he says. "I decided to set up our own container freight stations." Currently Allcargo bas three such freight stations in Mumbai, Chennai and Mundra, Gujarat.

In 2005, Allcargo also entered the capital market with an initial public offering of Rs.150 crore. "We have left the company to professionals now," he says. Shetty's dream is to become a global market leader in logistics.
Top
For the long haul
Hindu Business Line 10-Apr-2011
- Presence in high - traffic ports, relationship with major shipping lines and expanding footprint through inland container depots make the stock attractive.
Srividhya Sivakumar
Allcargo Global Logistics whose business straddles the logistics value-chain offers a proxy to the growing economy. They company's presence in high-traffic ports, established relationship with major shipping lines and expanding footprint through inland container depots (ICD) make it an attractive investment bet for the long term.

With the country's export-import volumes beginning to pick up, Allcargo seems well-placed to leverage from it. Focused efforts to develop the logistics network in the country-road development, cold-chain logistics and warehouse development-too augur well for the company.

That it is now expanding into third party logistics (3PL) services and adding to its existing capacities also adds in its favour. Given the growth backdrop, Valuations seem reasonable. At the current market price of Rs. 164, the stock trades at about 11 times its expected CY - 11 per share earnings.

GROWTH DRIVERS
Notably, Allcargo is among the leading players in the global LCL (less-than container load) consolidation market. It enjoys strong working relationships with global players, given that it actively Ilaises with shipping lines, port agents and local carriers.

The company, through its wholly owned subsidiary, ECU Line, also has a strong presence in Europe, Latin America and Africa.

Allcargo had only recently acquired two Hong Kong-based companies engaged in non-vessel owning common carrier business to expand its presence in china and its plans further acquisitions in the fast-growing markets of India and East Asia.

It is also looking to expand its logistics service to the West Asian region too. Such planned acquisitions in the Multimodal transport Operator(MTO) and LCL segment would straightway add to the company's market share.

The company also has a significant presence in the high-margin container freight station (CFS) segment - in JNPT, Chennai and Mundra ports, its presence in the latter two ports is strategic as it will help Allcargo get a slice of the action, what with Gujarat turning into an investment hot-spot among Indian industrialists and Chennai becoming a car manufacturing hub. Notably, only recently, it increased the capacity at its Mundra(77,000 TEUs) and Chennai (120,000 TEUs) stations.

The utilization level at JNPT is above 90 per cent (annual capacity 144,000 TEUs) and the company is now looking to acquire capacities to supplement that. Development on this front, therefore, would be a key trigger to look out for.

Allcargo also has an inland container depot at Indore with a capacity of 36,000 TEU per annum. Its plans to establish a Pan-India presence by setting up new ICD facilities in Hyderabad, Dadri, Nagpur and Bangalore.

ENGINEERING SOLUTIONS
Allcargo, through its projects and engineering solutions segment, offers services that include transportation of high-value specialized equipment such as oilfield equipment, power plants and compressor stations that cannot be containerized on a turnkey basis.

The company recently merged its equipment hiring division into the projects division to focus on high-growth sectors and invest in high-quality assets. The segment, therefore, has considerable long-term growth potential. As of December 2010, it had an order book of about Rs.55 crore for the project business and about Rs 125 crore for the equipment business.

CAPEX PLANS
Allcargo has planned a capex of about Rs.250 crore in the calendar year 2011. Of this, it plans to use about Rs.100-125 crore for its CFS/ ICD (largely) JNPT acquisition and Hyderabad ICD) and Rs.80 crore for its equipment division. Incidentally, the company had done a capex of about Rs.300 crore last year. It had also raised about RS 100 crore through QIP last year in April.

A manageable debt; equity (at about 0.2 times end of CY09) gives it the leeway to tap debt resources if required. Even so, its asset-light business makes it easy for the company to tap funds. Allcargo had a net debt of about Rs.290 crore (as of December 2010).

SCORECARD
In the last four years, the company has managed to grow it consolidated revenues and profits at a compounded rate of about 34 per cent and 32 per cent respectively to Rs.2,861 crore and Rs.166 crore.

In the calendar year 2010, its income from operations increased by about 38 per cent while net profits grew by about 28 per cent. Operating margins were lower by a percentage point at 9.4 per cent.

In terms of segment-wise performance while the MTO segment increased its revenues by about 24 per cent, the CFS and project engineering businesses saw a revenue growth of about 31 per cent and 47 per cent respectively. For the coming year, the management experts grow its profits by about 25-30 percent.
Top
Adventurous, bold & passionate
Cargo Talk 01-Apr-2011
- Leading the Indian logistics brand
  Shashi Kiran Shetty, chairman and managing director, Allcargo Global Logistics, and chairman Ecu Line, had a conversation with Cargo Talk on his successful tenure in the logistics industry, perspective about the industry and his future plans. Ratan Kr Paul
Ashish Goel wins Allcargo Global Invitational Masters 2011

Indiainfoline 15-Mar-2011

Leaving behind their hectic schedules and boardroom meetings, about 100 top decision makers from the business capital of India - Mumbai showed their golfing skills in the second-edition of Allcargo Invitational Golf Masters at the exotic Oxford Golf & Country Club in Pune. Apart from being the fastest growing game in the country, golf has also become a favorite sport of the CEOs. Allcargo, the leading global logistics company is the latest entrant in the growing list of sponsors, which has helped the game grow both at the amateur and professional level.

Some of the top names participating include Sujan Hajra (Shipping Corporation of India), Dinesh Kumar Lal (Maersk), Kent Lew (WanHai), RS Krishnan (BNP Paribas), J.R.Lee (KMTC) Richard Hew (OOCL), Harish Tawani (Nimbus Sports), & Kunal Dasgupta (Sony) amongst others. Mr. Ashish Goel emerge overall winner finished with 71 points while Edward Eng was close runner-up with 72 points. As many as 96 top corporate heads vied for honours. Allcargo Global Logistics, who was recently awarded as the "Company of the year in Logistics Category" at prestigious Maritime and Logistics Award-2010, played as wonderful hosts and joined a bandwagon of corporate sponsors in India for the first time. Winners in the individual category were Richard Hew, J. S. Gill, Sanjeev Vaz and Avinash.

The one-day corporate extravaganza had been played on a unique format - the Callaway System of handicapping where a player's handicap is based on the performance of the player for 18 holes. Players will compete in two handicap categories (0-18 and 19 & above). Apart from the individual prizes, some interesting spot prizes like longest drive and closest to pin were also held.

The Oxford Golf and Country Club which has been conferred the "Third-best new golf course in Asia" award in an announcement made by Asian Golf Monthly, is one of the best golf courses in the country and provides a thrilling challenge via its 7020-yard facility which boasts of several white sand bunkers and water bodies.

The event is sponsored & supported by All Cargo Global Logistics Ltd while it is being managed by the leading sports event management company Tiger Sports Marketing. A round of pure bliss on a challenging golf course and followed by some mouth-watering cuisine the golfers could not ask for more.

Top
Allcargo Plans Acquisitions for Pan-India Play
Economic times 14-Mar-2011
- It is understood to be looking at companies in warehousing, 3PL, CFSs and LCL space
OUR SHIPPING BUREAU
MUMBAI 13 MARCH
Private equity funds and merger and acquisitions (M&As) may be the flavor of Indian logistics industry, which is said to witness a lot of inbound traffic of cash-rich investors, acquisitions seems to be the way forwards for leading logistics company Allcargo Global Logistics for fast tracking its pan-India play.

Shashi Kiran Shetty-promoted Allcargo Logistics is understood to be looking at acquiring warehousing, third party logistics (3PL) companies, container freights stations (CFSs) and tactical acquisitions in the less-than-a-container load (LCL) businesses.

"The Company is in the process of adding capacity at Jawaharlal Nehru Port Trust (JNPT) CFS and exploring other locations through organic and inorganic growth. It would also look at inorganic growth opportunities in Inland Container Depot (ICD) business too," said a senior official. He added that acquisitions are the key to the next level growth.

He said the company is strategically expanding into warehouses to ultimately provide integrated 3PL services though organic and inorganic growth model. The company has recently announced its foray into 3PL business and has plans to build warehouses in the existing land banks.

"Given the special status conferred on freezer segment by the government in the Budget, it would not be surprising if Mr Shetty also ventures into cold chain business sooner than later," said a person closely watching the entrepreneur.

"In the case of LCL business, a tactical acquisition in the regions where Allcargo is present but does not have significant presence. It is also in the process of buying out local partners of consolidating the stake of ECU Line subsidiaries and operating companies," added the official.

ECU line was bought out by Allcargo Global in June 2006. Most recently, it has acquired two companies in China and HongKong which were associated with ECU Line and engaged in non-vessel owning common carriers (NVOCC) business.

"This acquisition is expected to give an operating profit of $3.6 million annually and expected to add significant value to its Chinese network," the official said.

Allcargo has recently bought two vessels to reduce ship chartering cost and to leverage on coastal cargo movement.

"We are planning to buy more," he added, cryptically.

With the sustained growth in the Indian economy and GDP growth expected at 8.5% over the next few years, and the emergence of India as a global outsourcing hub, will facilitate the country's container trade. The country's ability to cater to infrastructural development will accelerate growth of specialized services such as project logistics, customized engineering solutions for large cargo movements. The logistics sector is poised for growth in the coming years and Allcargo Global Logistics would benefit from the same.

Group chief financial officer at Allcargo Global S. Suryanarayanan said in the calendar year 2011 his company is looking at investing about Rs.250 crore, basically comprising of Rs.100 to 125 crore, into CFSs/ ICDs and about another Rs.80 crore into equipment division and then regular capital expenditure to the tune of Rs.15 to 20 crore.

For the fourth quarter ended December 31, 2010, Its consolidated net sales (income from operations) rose to Rs.70,375 lakh, registering an increase of 26% over the corresponding period of last year.

The consolidated profit after tax (after minority interests) for the fourth quarter ended December 31, 2010, increased by 134% to Rs.4,193 lakh compared to Rs.1,795 lakh in the corresponding period last year.

Consolidated profit after tax (after minority interests) for the year ended December 31, 2010 grew by 32% to Rs.17,100 lakh as compared to Rs.12,995 lakh in the previous year.

"The company has Rs.150 crore as cash and bank balance equivalents for acquisitions," the official added.
Top
Allcargo Global Logistics: Likely to benefit from Budget measures

14-Mar-2011

Allcargo Global Logistics, which has a significant presence in overseas and domestic logistics markets, has benefited over the past few quarters from a pickup in external trade amongst emerging economies, coupled with strong demand conditions in the home market.

The recent budgetary proposal to enhance the Rural Infrastructure Development Fund by Rs 2000 crore, in a bid to expand warehousing facilities in the country, will help the company in the long term. Also, the proposal to provide infrastructure status to cold storage and post-harvest storage would help to attract greater bank credit and allied facilities. We had recommended the stock in our issue dated June 6, 2010. Since then, the stock has declined 5.4% compared with a 6.2% rise in the Sensex. In addition, the company trades at a P/E ratio that is lower than that of its peers operating in similar segments.

LOGISTICS INFRASTRUCTURE: Allcargo through its earlier acquisition of Belgium-based ECU Line is one of the leading global players in the less than container load (LCL) segment, with a presence in over 59 countries. LCL implies goods, which don?t require a full container, but only a portion of it. And logistics players, such as Allcargo, which receive goods from various customers at its offices across the globe and in turn, books space on shipping lines, to transport goods to its final destination.

Its overseas operations accounted for nearly 73% of its consolidated net sales of Rs 2,632.9 crore for the calendar year 2010. In the domestic market, the company is present across several segments, including container freight station (CFS) and inland container depots (ICDs), equipment hiring and warehousing. In its container freight services business, Allcargo has a presence at JNPT, near Navi Mumbai, Chennai and Mundra, Gujarat with a total capacity of 2.78 lakh TEUs (twenty foot equivalent) as on June 2010. This represented a rise of 26.4% from the levels two years earlier. Allcargo, receives goods from its clients at its CFS/ ICDs and then suitably transports the goods. In its warehousing business, it has facilities in Bhiwandi, near Mumbai, and Goa.

The company utilises these facilities to grow in the high margin 3-PL, or third party logistics, segment. And in this segment, a logistics player is actively involved from the conception to delivery of necessary logistics services for his client. The company had invested Rs 610.4 crore between December 2007 and December 2009 on a consolidated basis, while its operational cash flow during this period was Rs 398 crore. As a result, its secured loans amounted to Rs 204 crore at the end of December 2009, a rise of 63% from two years earlier.

FINANCIALS: The company benefited from a pick-up in trade volumes between fast-growing emerging economies, coupled with strong domestic demand in the December 2010 quarter. As a result, its consolidated operating profit margin improved by 400 basis points year-on-year to 10.9% in the quarter, while its income from operations rose 25.8% to Rs 703.8 crore. Its adjusted net profit also nearly doubled in the fourth quarter of CY 10.

The company follows a calendar year. Growth in sales in the fourth quarter of CY 10 was broadly in tune with the first nine months of current financial year, but net profit growth was much faster, thanks to better cost management. At its key overseas operation ECU, revenues grew 35% y-o-y in the fourth quarter of CY 10. In its domestic operations, like CFS, volumes grew 28% y-o-y to 61,637 TEUs in the fourth quarter. However, a cause for concern is the rising price of crude oil prices and its potential negative impact on global trade flows, over the medium term. This in turn could result in a reduced growth rates for logistics companies, say analysts.

VALUATIONS: At Rs 155.4 per share, Allcargo Global trades at a consolidated, trailing four-quarters P/ E of 11.9. Other player Gateway Distriparks trades at a standalone P/ E of 14.9 times. The largest domestic logistics player Container Corporation of India trades at a P/ E of 18.8 times.

Top
Set for a smooth sail
Economic Times 14-Mar-2011
- Allcargo Global Logistics is likely to benefit from a slew of measures announced in the Union Budget in the coming years
ALLCARGO Global Logistics, which has a significant presence in overseas and domestic logistics markets, has benefited over the past few quarters from a pickup in external trade amongst emerging economies, coupled with strong demand conditions in the home market.

The recent budgetary proposal to enhance the Rural Infrastructure Development Fund by 2000 crore, in a bid to expand warehousing facilities in the country, will help the company in the long term. Also, the proposal to provide infrastructure status to cold storage and post-harvest storage would help to attract greater bank credit and allied facilities.

We had recommended the stock in our issue dated June 6, 2010. Since then, the stock has declined 5.4% compared with a 6.2% rise in the Sensex. In addition, the company trades at a P/E ratio that is lower than that of its peers operating in similar segments.

LOGISTICS INFRASTRUCTURE: Allcargo through its earlier acquisition of Belgium-based ECU Line is one of the leading global players in the less than container load (LCL) segment, with a presence in over 59 countries. LCL implies goods, which don’t require a full container, but only a portion of it. And logistics players, such as Allcargo, which receive goods from various customers at its offices across the globe and in turn, books space on shipping lines, to transport goods to its final destination. Its overseas operations accounted for nearly 73% of its consolidated net sales of 2,632.9 crore for the calendar year 2010.

In the domestic market, the company is present across several segments, including container freight station (CFS) and inland container depots (ICDs), equipment hiring and warehousing.

In its container freight services business, Allcargo has a presence at JNPT, near Navi Mumbai, Chennai and Mundra, Gujarat with a total capacity of 2.78 lakh TEUs (twenty foot equivalent) as on June 2010. This represented a rise of 26.4% from the levels two years earlier. Allcargo, receives goods from its clients at its CFS/ ICDs and then suitably transports the goods.

In its warehousing business, it has facilities in Bhiwandi, near Mumbai, and Goa. The company utilises these facilities to grow in the high margin 3-PL, or third party logistics, segment. And in this segment, a logistics player is actively involved from the conception to delivery of necessary logistics services for his client.

The company had invested 610.4 crore between December 2007 and December 2009 on a consolidated basis, while its operational cash flow during this period was 398 crore. As a result, its secured loans amounted to 204 crore at the end of December 2009, a rise of 63% from two years earlier.

FINANCIALS: The company benefited from a pick-up in trade volumes between fast-growing emerging economies, coupled with strong domestic demand in the December 2010 quarter.

As a result, its consolidated operating profit margin improved by 400 basis points year-on-year to 10.9% in the quarter, while its income from operations rose 25.8% to 703.8 crore. Its adjusted net profit also nearly doubled in the fourth quarter of CY 10. The company follows a calendar year.Growth in sales in the fourth quarter of CY 10 was broadly in tune with the first nine months of current financial year, but net profit growth was much faster, thanks to better cost management. At its key overseas operation ECU, revenues grew 35% y-o-y in the fourth quarter of CY 10. In its domestic operations, like CFS, volumes grew 28% y-o-y to 61,637 TEUs in the fourth quarter. However, a cause for concern is the rising price of crude oil prices and its potential negative impact on global trade flows, over the medium term. This in turn could result in a reduced growth rates for logistics companies, say analysts.

VALUATIONS: At 155.4 per share, Allcargo Global trades at a consolidated, trailing four-quarters P/ E of 11.9. Other player Gateway Distriparks trades at a standalone P/ E of 14.9 times. The largest domestic logistics player Container Corporation of India trades at a P/ E of 18.8 times.
Top
Allcargo's billion dollar dream

NDTV Profit 09-Mar-2011

The Multimodal logistics company Allcargo Global Logistics has drafted a Rs.1,000 crore plan to invest in growing its various business verticals in order to tap the trade growth globally and infrastructure sector growth in India. On the back of such a huge investment the company is targeting to achieve a billion dollar revenues in the next three years.
Click: http://profit.ndtv.com/video/show/193189
Top
We will dilute stake to create liquidity - Shashi Kiran Shetty
Mint 05-Mar-2011
- With Allcargo expected to end the current fiscal with a Rs.3,000 crore turnover, Shetty targets $1 billion by 2013-14.
Shashi Kiran Shetty 53 chairman and managing director of Allcargo Global Logistics Ltd., came from Mangalore to Mumbai looking for a job when he was 21. After working with four shipping firms, he set up his own company that became an agent of Belgium based ECU Line NV the world's second largest LCL firm, in 1995 LCL (Less than a container load) firms collect small cargo and aggregate them into a full container load.

Ten years later Allcargo look a 33.8% stake in ECU Line and the following year acquired the entire company. The takeover of ECU Line which had five times the acquirer's revenue in 2006, for Rs.23 million (Rs.144 crore today), made Allcargo the world a second largest LCL firm after, OTS Logistics Group of the US. Subsequently, Blackstone Group Lp invested Rs.75 million (about Rs.340 crore today) in the company in two phases.

Shetty plans to hit a $1 billion turnover target by 2013 - 14. Allcargo is expected to end the current fiscal with a Rs.3,000 crore turnover Edited excerpts.

Indian logistics forms are buying Chinese companies. Allcargo has bought two freight forwarding companies. What is the rationale?
China generates five times the volume of India Hong Kong and Shanghai are the two largest markets and we cannot leave these markets to agent companies that are not owned by us. The freight forwarding companies have large operation in China. They are also former agents for ECU Line, and hence, we are familiar with the people in these firms.

Is it part of your plan to go global?
We became a global company by acquiring ECU Line and now we are trying to plug the missing pieces. We cannot afford to miss China for the future stability of the group and cargo network Considering the cargo network. Considering the cargo network as a whole you cannot restrict yourselves to India. Unless you align all the offices to the network and think like one large group, you will always have issues. We acquired them to create synergy and have a common understanding to move our group in a certain direction.

Will you go for more overseas acquisitions?
Certainly, we will examine opportunities abroad. We had bought a company based in London called SHE. Maritime just before the Hong Kong acquisitions. That acquisition was aimed at increasing our market share. The broad idea of the acquisition is to boost sustainability of business have a common philosophy and exploit market opportunities.

From a market perspective, we will look at the US where we are currently represented by an agent. But it is not absolutely necessary that one should be present in every market. It has to make commercial sense. It must come at a reasonable price and has to have a strategic fit. We are not interested in creating a string of pearls across the world.

In terms of LCL, Allcargo is the second largest firm in the world. How are the other segments faring?
We are one of the largest in the world in non vessel operating common carrier (NVOCC) business. In the CFS (container freight station) and ICD (inland container depot) business, we are one of the largest in India with four facilities operating and the fifth starting in Dadri (near Delhi).

We are planning to rapidly expand the ICD footprint across India. We aim to grow by setting up our own facilities or acquisitions.

In the third line of business - project cargo and engineering solutions - we offer end to end solutions up to erection of plants. We also supply cranes and other equipment for projects in areas such as oil and gas offshore, wind mills, cement, and steel.

Offering end-to-end solutions?
We offer transportation, consultations services engineering solutions and erection of plant. We send a team of experts to advise the client in erecting the plant.

You are planning to enter third party logistics (3PL) - transportation, warehousing and distribution.
We will be getting into 3PL business shortly. We will have 400,000 square feet of warehousing space and offer the entire supply chain management solutions for our customers. It is an emerging business. Once the government rolls out the goods and services tax Act there will be huge demand for big another warehouses in strategic locations as well as small warehouses.

Fortunately we have a huge land bank in Mumbai, Delhi, Chennai and Bangalore. We had acquired these land parcels of around 300 acres across the country to build logistics parks and ICDs.

You have entered into coastal shipping by acquiring two ships.
Our entry into coastal shipping is to supplement our project cargo business and to exploit coastal trade opportunities. We want to explore bulk cargo opportunities as well. Our ships will carry bulk cargo and not container cargo.

At one point of time you had plans to get into offshore.
We are not getting into offshore. We had plans, but we did not pursue it as it requires too much of investment and we were not comfortable as we were new to that sector.

You miss a rail link while your navals have it. Worried?
I am quite happy has not getting into this business. We will enter the business at the right time. At a right valuation, we are open to acquitting a company as well. We believe that we can add value to the business as we are having CFSs transport volumes and the last mile capability. Rail is something that eventually we need to build, buy or partner.

Where do you see the company in the next two years?
The idea is take the company to $1 billion by 2013 - 14 and we want in to be traded among the Nifty. This financial year, we will end with a turn over Rs.3,000 crore. We will accomplish this goal through organic and inorganic growth.

But your stock is not doing well.
We believe that our share prices are grossly undervalued today. This is because people benchmark us with Gateway Distriparks and there aren't too many public companies in the logistics space. What people dont understand is that we are a global company and we are far more diversified. Gateway Distriparks on other hands, is only present in CFS and rail.

For the last six years, our Ebitda (Earnings before interest, tax, depreciation and amortization have been growing by 28% CAGR(compounded annual growth rate). But the market does not realize this. We are suffering for two reason - there is no benchmark and there is low liquidity on our stock.

There is no volume trade happening and that is why investors are wary about coming into our stocks right now. They feel that if they buy today they will find it difficult to sell the stock given the low liquidity. Besides, investors are careful about buying midcaps and we are a victim of that in spite of performing so well in to last six years.

What is the way out?
I am sure there is a way out. We will have to dilute a bit. We are open to selling if it is going to help create liquidity. We will do that at an appropriate time. There can be a follow on issue, but we have not yet decided.
Top
Allcargo Global Logistics acquires two Hong Kong firms
The Hindu 25-Feb-2011
- The firms have business in China and in eastern region
New Delhi: Seeking to capitalise on the flow of trade from what it termed as 'factory of the world'. National stock Exchange listed and India's first multinational in logistics Allcargo Global Logistics has acquired two Hong Kong based companies engaged in nonvessel owning common carrier business to expand its presence in China.

Talking about the latest acquisition, Allcargo Global Logistics Chairman and Managing Director Shashi Kiran Shetty said his was the first Indian company to make such acquisition in the logistics sector. "China was missing link in our business strategy and its is the reason we have acquired the two Hong Kong based companies. These companies have business in China and other parts of the eastern region giving us access to such an important trading and export market," Mr. Shetty said. The company is one of India's largest publicly listed logistics companies, with a consolidated turnover of the over Rs. 2,300 crore. Its significant growth has attracted quality investors like the Blackstone Group and new Vernon Capital, two of the world's leading private equity firms, which acquired 14.99 percent and 6.42 per cent stake in Allcargo, respectively. Mr. Shetty said the company had also acquired two vessels with a dead weight of about 6,500 tonnes through its wholly-owned subsidiary company, thereby marking its entry into the shipping sector. Mr. Shetty said the China strategy included investing more in people and acquiring warehouses there. "China is too important for us. India-china business is bound to grow and we see a huge opportunity in that. We plan to acquire and consolidate in future and have already done six acquisition so far," he said.

He said the company, which had invested nearly Rs. 280 crore in 2010-11, had outlined an investment of Rs. 300 crore for 2011-12. "We have set aside Rs. 40 crore to establish a pan-India presence with expansion to Hyderabad, Dadri, Pithampur, nagpur and Bangalore through strategic joint ventures. We plan to set up offices in Saudi Arabia and the U.S during 2011," he stated.
Top
India undecided on adopting Rotterdam Rules Convention

Mint 23-Feb-2011

India is undecided on adopting the Rotterdam Rules-a United Nations convention governing liabilities on goods transported via sea or land-as it has not been able to convince key stakeholders with diverging views.

If India signs the convention, liabilities for delays or damage while transporting goods via sea and land will apply to shipping lines and to the other transporters involved, with stringent penalties.

Shipping lines are expectedly against signing the Rotterdam rules, citing extensive liability burden. Many shippers such as logistics companies support the rules though some said it may expose them to higher insurance premiums.

Spain became the first country to ratify the Rotterdam Rules in January.

"I still maintain (an agnostic stand as far as Rotterdam Rules (go), said S.B. Agnihotri, directory general of shipping, India's maritime regulator, on the sidelines of a recent seminar organized by the Mumbai and Nhava-Sheva Ship Agents Association. Agnihotri said the ministry of shipping is try to strike a balance between relevant Indian regulations and international rules.

India's Shipping Trade Practices Act governs liabilities of shipping lines while the multi-modal Transport Act applies to land transport.

The Rotterdam Rules, on the other hand, govern liabilities on a door-to-door basis, said Proshanto Mukherjee, Vice-president (research) and director of doctoral programmes at world Maritime University.

"Rotterdam Rules are comprehensive and attempt to create a balance between shippers and shipping lines. India cannot stand alone when other countries are signing the convention," he said.

A shipping ministry official, shipping on condition of anonymity, admitted his office was undecided on ratifying the UN convention, but said it would have to take a call soon.

Shashi Kiran Shetty, chair man and managing director of Allcargo Global Logistics Ltd, which has both sea and land transport divisions for cargo said while the Rotterdam rules are comprehensive, Indian authorities have to clear the confusion over multiple laws and lay out the liabilities and responsibilities.

A senior representative of a large shipping line, who asked not to be identifies, said ship owners are against India signing the convention.

Shipping lines fear they would have to take the blame for errors by other transporters in the absence of proper disclosures, he said.

S. Hajara, chairman and managing director of Shipping Corp. of India Ltd, the country's largest shipping company by fleet size, said the Rotterdam Rules are in favour of shippers, especially as ship owners do not have direct control over the cargo they carry.

India has "no alternative but to sign the Rotterdam rules". said S.Venkiteswaran, a senior advocate in the Supreme Court and a leading maritime lawyer.

"We had not signed previous rules but we have included provisions of those rules in our legislation. Eventually, India well have to adopt it and this international rule will largely cover all local legislations as well," he said.

Rotterdam Rules entail, among other things, eliminating the traditional defence of error in navigation. It requires ship owners to keep their vessels seaworthy, introduce defences against piracy and terrorism, as well as potential liability for economic losses caused by delays.

Top
Logistics industry set to touch $90b revenues in 2011

Financial Chronicle 03-Feb-2011

The Indian logistics industry is likely to continue its growth momentum in 2011 as in the previous year and the sector is forecast to witness a consolidation wave in the coming months in view of the reviving fortunes of the sector with booming end-user industries.

"The Indian logistics sector reported revenues of about $82.10 billion in 2010, witnessing a growth of about 9.2 percent over the previous year, driven by strong growth of key manufacturing industry secots," according to VG Ramakrishnan, senior director of transportation (South Asia, West Asia and north Africa), forst and Sullivan said in his report.

The growth trend will continue in 2011 also as in 2010 and the total revenue is expected to reach $90 billion. For the period 2010-2020, the Indian logistics market is likely to witness consistent annual growth of around 8 - 9 percent and reach to the revenue level of about $ 190-200 billion by 2020. this will be fuelled by the consistent growth of the economy and key industries such as automotive, engineering, pharmaceuticals, and food processing, among others.

With India being one of the five fastest-growing economies in the world as of 2010, and likely to remain so for few more years, the logistics sector in in the country has immense growth potential in fulfilling the rapidly-rising needs of industries for both domestic distributing as well as to reach out to the targeted international markets.

Private equity and venture capital firms are eyeing a slice of the logistics sector, which saw testing times for the last 12-16 months.

The year 2010 saw a few notable acquisitions in the logistics like FedEx's acquisition of AFL Logistics, and Transport Corporation of India's (TCI) 51 percent equity stake buy in Infinite Logistics Solutions. Besides, firm such as Toll Global Logistics, Allcargo Global Logistics, and FH Bertling have been actively looking to expand their size in India through the inorganic way.

In addition, private equity firms and leading finance orgainsations such as international Finance Corporation have been actively investing in Indian Logistics companies.

The addition, private equity firms and leading finance organisations such as International Finance Corporation have been actively investing in Indian logistics companies.

The total Logistics spend in India represents about 6.2 percent of the country's total GDP. However, it represents around 11.6 percent of services GDP (contribution of the services, sector in the total GDP), the report said.

balachandarg@mydigitalfc.com

Top
Multi-modal way up the Ganga
Infrastructure Today 01-Feb-2011
- Transporting 1,100 mt stators for a thermal plant in interior India is a challenge because of the magnitude as well as logistical bottlenecks. Allcargo Global Logistics innovated the process. Adarsh Hegde writes about the experience.
On 27 July 2007, the contract for the NTPC Barh 3x660 MW stator transportation project was awarded to Allcargo Global Logistics by Power Machine, for the transportation of three generator stators and their accessories from Haldia Port/ Kolkata Port to NTPC Barh, Bihar. The first stator arrived in August and was delivered to the jobsite in Octorber 20089. The second stator at Kolkota in june 2010 and was delivered by August 2010, which was finally followed by the third stator, which arrived at Kolkata in December 2010, and is currently making its way to the Barh site.

The dimensions for each of the generators stators were 9.98x5.11x4.73 m, consisting of an enormous weight of 378 mt. Considering the severe constraints in road transporatation to the project site directly from Haldia Port, Allcargo opted for multimodal transportation while executing the operations, using waterways for 904 km and roadways for the remaining 46 km.

The generator stator was initially transported via waterways up the Ganga on a flat top barge fromHaldia port to Kirodepur jetty near Fatway. The barge was constructed by Allcargo, after which the consignment was undertaken via road transportation from Kiroderpur jetty to NTPC's Barh super thermal project site.

THE TECHNIQUE
Allcargo deployed a flat top barge of 60m length x 15 m wideth x 2.8 m depth with a carrying capacity of 1,000 tonne and loaded draft of 1.2 m along with two tug boats of 900 BHP each for towing the generator stators from Haldia port to Kiroderpur jetty. We deployed our 12 axle goldhofer hydraulic modular trailer in a one and a half (18 axles, 36 suspensions) combination for the tranportation of generator stators by road from kiroderput jetty to the NTPC project site.

The generator stators were received on steel beams and stools pre-positioned on the barge. The beams and stools were especially fabricated and arranged on the barge in a specific manner that enabled distribution of the entire load of the generator, and kept in mind the deck loading factor of five mt per sq m of the barge. The beams were fabriacated after calculating the bending movement of the generator's load.

The package was lashed and secured using tested wire ropes having 19 mm diameter with five tonne bottle screws and D-shackles, as per the insurance surveyor's recommendations.

THE DELIVERY
We selected the Kiroderput jetty for the construction of RORO jetty, just 46 km away from the site. The site was most suitable since there were no bridges en route. Except for a few overhead lowtension electrical lines, tree branches and traffice congestions, the route was considered safe for transportation.

We obtained the required permissions from local administrations: the police, electricity board, forest and other government departments.

Post-monsoon, the roads are prone to being bumpy and in order to ensure smooth and uninterruped movement, all the potholes on the road were filled and leveled. The cargo was escorted by our own staff as well as designated police officers, who assisted us in controlling the traffic during the operation. The state police officers also provided us with parking slots during the movement.

The increased precautionary steps and strategic and systematic planning helped the logistics movement of the generator stator and its accessories, and ensured successful delivery which was carried out in an efficient and effective manner.

The author is Executive Director and Corporate Marketing Chief, Allcargo Global Logistics and spearheaded the above project. He may be contacted at allcargo
communication@allcargoglobal.com
Top
Warehousing Act will create an organised system

12-Jan-2011

Adarsh Hegde: The Warehousing (Development and Regulation) Act will eliminate non-registered and pseudo-warehousing companies. Farmers would use the warehousing receipts as a tool to safe keep the goods. This will enhance the credit availablity by the lending institutions. The warehouse receipt under this Act will become a negotiable instrument. The farmers' liquidity will improve and shield them from distress sales. It will bring forth an organised system as opposed to the current scenario.

Viewpoint
Vikas Anand: The Warehousing (Development and Regulation) Act will create a system which will mandate the issue of negotiable warehouse receipts. It also prescribes a form and manner of registration of warehouses and the establishment of Warehousing Development and Regulatory Authority. This act will help farmers avail of better credit facilities, avoid distress sales, and safeguard financial institutions by mitigating risks inherent in credit extension to farmers. The pledging/ collateralisation of agricultural produce with a legal backing in the form of negotiable warehouse receipts will lead to increase in flow of credit to rural areas, reduce cost of credit, and spur related activities like standardisation grading, packaging and insurance, and in developing a chain of quality warehouses.

Top
Allcargo Global Buy
Mint 10-Jan-2011
- Alcargo Global Logistics Ltd's
December quarter results were in line with our estimates. Sustainable expansion in earning before interest, taxes, depreciation and amortization margin and rising global penetration proves positive. The company acquired two Hong Kong-based freight forwarding firms.

Asit C. Mehta
Top
We'll handle bulk, project cargo on the coastal front

Financial Express 04-Jan-2011

Allcargo Global Logistics, an integrated logistics solutions provider with consolidated revenues at Rs. 2,089 crore for FY09, came into the lime light in 2006 when it acquired ECU Line and went public. Allcargo moved into the third party logistics (3PL) space last year. It's major business segment is LCL, which is a shipment not large enough to fill a standard cargo container. Shashi Kiran Shetty, chairman and MD of Allcargo global Logistics, spoke to FE's Nikita Upadhyay about the company's expansion plans in 2011.Excerpts;

LCL is the major business segment for you and you acquired two companies in this space. How would it help in future?
LCL contributes about 70% to our revenues. We acquired two HongKong based companies in this space for approximately $22 million (about Rs. 100 crore). This acquisition is expected to contribute an Ebitda of $ 3.6 million in the current year. This has brought significant value addition to our network as China is expected to remain a volume driver in the future.

What kind of growth do you see in LCL business for the year?
Our LCL business, although just 10% of the container trade in India, is growing. This year, we have done 4.1 million cubic metre of LCL and expect to do about 6 million cubic metre in 2011. We already have offices in 150 locations worldwide and will be opening another office at Saudi Arabia in 2011. The US is again a very big market for us and we may look at having an office there too.

You have already expanded capacity at Chennai and Mundra container freight station (CFS). Are you looking at expansion in CFS or inland container depots (ICD) business next year?
We have CFS at Mumbai, Chennai, Mundra and an ICD at Indore. We well be expanding our CFS facility at JNPT. At present, we are operational on a 22-acre facility and have a land bank to double this capacity.
We have land bank to build warehouses in Nagpur, Bangalore and Hyderabad that will be ready by the end of 2011.
Our Delhi ICD will be operational in March 2011. We will also convert a part of our Goa warehouse into a CFS.

Was it a wrong move to foray into shipping at this time?
Not at all. Asset prices have bottomed out and we have already acquired two vessels with a dead weight of approximately 6,500 tonnes and can look at a total of four to five vessels after seeing how this business proceeds. We will be handling bulk and project cargo on the coastal front.

What are your investment plans for all these expansion activities?
We have envisaged an investment of about Rs. 300 crore for FY11. Of this, Rs. 200 crore will be funded through internal accruals and Rs. 100 crore will be in debt.

Top
Allcargo Global plans acquisition

Business Standard 04-Jan-2011

Allcargo Global Logistics, an Indian freight forwarder backed by Blackstone Group LP, will buy a container clearance facility, seeking to benefit from rising overseas trade in Asia's second-fastest growing major economy. Allcargo wanted to add areas to allow customs officials to check cargo at Mumbai, Chennai and Mundra ports to accelerate processing of shipments, Chief Financial Officer S Suryanarayanan said in an interview in Mumbai.

BLOOMBERG

Top
Allcargo to build capacity, raise Rs. 100 cr

Mint 04-Jan-2011

Indian freight forwarder Allcargo Global Logistics Ltd, which is backed by private equity firm Blackstone Group Lp, will buy a container clearance facility seeking to benefit from rising overseas trade in Asia's second fastest growing major economy.

Allcargo, which provides shipping and container freight logistics services, wants to add areas to allow customs officials to check cargo at Mumbai, Chennai and Mundra ports to accelerate processing of shipments, its CFO S Suryanarayanan said.

The firm is betting the government will spend $500 billion (Rs. 22.35 trillion) on building ports and airports between 2012 and 2017 to boost trade. India's merchandise exports grew at the fastest pace in five months in November, driven by engineering goods, jewellery and textile sales. "There are a few opportunities in the ports that we operate in and we are considering those," Suryanarayanan said. "If those opportunities fructify then we'll go ahead with our expansion plans in the coming year."

India's overseas shipments in November rose 26.5% to $18.9 billion from a year earlier, according to data released by the Union commerce ministry. Imports in the month gained 11.2% to $27.8 billion.

Allcargo shares rose 1.8% to Rs.149.25 at the 3.30pm close of trading in Mumbai on Monday. The stock dropped 25% in 2010, compared with a 17% gain for the Sensex.

Allcargo, which has offices in 14 countires, in October bought controlling stakes in two firms that operate in eastern China. "Inbound and outbound trade in India is improving." Said Siddhartha Khemka, an analyst at Centrum Broking Pvt. Ltd, who has a one-year price target of Rs,220 for Allcargo's stock, "(which) has an advantage because it has a diversified presence in the region."

Allcargo will raise as much as Rs.100 crore this year, taking its total debt to Rs. 300, Suryanarayanan said. The debt will be part of the Rs. 250 crore it will spend on increasing container clearance and warehouseing capacity, he said.
Blackstone owns about 14% of Allcargo, according to data complied by Bloomberg. BLOOMBERG

Top
INTERVIEW - Allcargo Global eyes acquisitions in India, east Asia

Thomson Reuters 03-Jan-2011

Allcargo Global Logistics (ALGL.BO) is scouting for acquisitions in the fast growing markets of India and east Asia, after taking stakes in a couple of Hong Kong-based logistics firms last year, as the Indian firm looks for strategic fits to its container load and multi-modal transport operations. Allcargo is a market leader in the less-than-container-load (LCL) segment -- shipments where cargo is insufficient either in weight or quantity for standard containers. "In our MTO and LCL segment we are looking overseas where we believe it would straightaway add either in terms of strategy or market share," Allcargo group Chief Financial Officer S. Suryanarayanan told Reuters in an interview. "We are looking more at the far east because that is where the growth story is happening. In India too, we are looking at some acquisitions, they will all be in the verticals that we are in," Suryanarayanan said over the weekend. The company had raised about 1 billion rupees last April through a share sale to institutions for future acquisitions and general capex. In October last year, Allcargo, through a subsidiary, had acquired business rights and controlling stake in Hong Kong-based firm engaged in NVOCC (Non Vessel Owning Common Carrier) business in China and other parts of east Asia. Allcargo will not need to raise further funds for the planned acquisitions as the firm has roughly 3.6 billion rupees in cash reserves and funds from operations, he said.

"So if an acquisition comes with a strategic fit and the price is right we have enough money to go ahead," he said. CAPEX, EXPANSION - The company has earmarked roughly 2 billion rupees in calendar year 2011 to expand capacity across its ports, container freight and equipment hire businesses. The capex will be funded out of internal accruals, he said. The firm operates container freight stations at Mumbai, Chennai and Mundra Port and an Inland Container Depot facility in Indore. The firm plans to hike capacity later this year at its Chennai facility to 120,000 TEUs (twenty foot equivalent units) from between 90-95,000 TEUs now, Suryanarayanan said. India's port traffic is expected to triple by 2020 to 2,495 million tonnes. Investments worth 2.7 trillion rupees are expected during the decade to boost port capacity, according to estimates released by India's shipping ministry. The firm's consolidated revenue for the year ending December grew almost 28 percent to 26.3 billion rupees. Net profit for the calendar year rose 29 percent to 1.8 billion rupees. "I think there is another 100 basis point increase (in margins) we can easily target in the global LCL market on an annualised basis," Suryanarayanan said. Allcargo which gets the majority of its consolidated revenue from its wholly-owned European unit ECU Line, expects revenue to grow at the same rate as they did in 2010, he said. Allcargo shares were down 3.27 percent at 142 rupees in a choppy Mumbai market.

Top
Blackstone-Backed Allcargo Plans Acquisition in India to Increase Revenue
03-Jan-2011
Allcargo Global Logistics Ltd., an Indian freight forwarder backed by Blackstone Group LP, will buy a container clearance facility seeking to benefit from rising overseas trade in Asia's second-fastest growing major economy.

Allcargo, which provides shipping and container freight logistics services, wants to add areas to allow customs officials to check cargo at Mumbai, Chennai and Mundra ports to accelerate processing of shipments, Chief Financial Officer S. Suryanarayanan said in an interview in Mumbai.

The company is betting the government will spend $500 billion on building ports and airports between 2012 and 2017 to boost trade. India's merchandise exports grew at the fastest pace in five months in November, driven by engineering goods, jewelry and textile sales, the government said Dec. 8.

"There are a few opportunities in the ports that we operate in and we are considering those," Suryanarayanan said. "If those opportunities fructify then we will go ahead with our expansion plans in the coming year."

India's overseas shipments in November rose 26.5 percent to $18.9 billion from a year earlier, according to data released by the country’s commerce ministry today. Imports in the month gained 11.2 percent to $27.8 billion, the data showed.

Allcargo shares rose 1.8 percent to 149.25 rupees at the 3:30 p.m. close in Mumbai. The stock dropped 25 percent in 2010, compared with a 17 percent gain for the Bombay Stock Exchange's benchmark Sensitive Index
Sales Growth
- The company, based in Mumbai, expects sales to grow at least 25 percent in 2010 and this year, Suryanarayanan said.
- The shipping-logistics company's revenue in the quarter ended Sept. 30 rose 48 percent to 1.97 billion rupees ($43.8 million) from a year ago. Net income rose 25 percent to 391.4 million rupees. Profit in 2009 was 979.8 million rupees on sales of 5.17 billion rupees.
- Allcargo, which has offices in 14 countries, in October bought controlling stakes in two Hong Kong-based firms that operate in eastern China.
- "Inbound and outbound trade in India is improving," said Siddhartha Khemka, an analyst at Centrum Broking Pvt. Ltd., who has a 1-year price target of 220 rupees for Allcargo's stock. "Allcargo has an advantage because it has a diversified presence in the region."
- Allcargo will raise as much as 1 billion rupees this year, taking its total debt to 3 billion rupees, Suryanarayanan said. The new debt will be part of the 2.5 billion rupees it will spend on increasing container clearance and warehousing capacity, he said.
- Blackstone Group LP, the world's largest private-equity firm, owns about 14 percent of Mumbai-based Allcargo, according to data compiled by Bloomberg.
Top
Wearing a new look

Project Monitor 01-Jan-2011

The private sector is expected to increase its investment in warehousing over the next decade, a trend that has been on the upswing since last year.

India's existing warehousing capacity is extimated at 80 million tonnes with additional requirement of at least 35 million tonnes in the next five to 10 years, experts say. The quality of warehousing also needs to improve vastly.

Investingly, just 8 per cent of India's current 1,800 million sq.ft of warehousing space is owned and operated by organised players.

Earlier the private sector was wary of entering this capital intensive business and banks ware hesitant to finance warehousing projects. This scenario changed some 10 years ago when the central government began to create a more favourable environment for private investment.

Current Scenario.
"The warehousing and cold chain infrastructure are the two key weak links in the country and require special attention compared to other arms of the logistics industry," Vikas Anand, Director - Operations, DHL Supply Chain (India) Ltd, told projectmonitor.

Adarsh Hegde, Executive Director, Allcargo Global Logistics Ltd, said. "The current infrastructure is ill-designed and ill-equipped to caler to the requirements in a scenario where growth rates of 7 to 9 percent are envisaged over the next few years."

The warehousing infrastructure needs to be spruced up. There is a distinct lack of sustained investment in palnned infrastructure like warehouses, transport centres and inland container depots," Rhea A. Vazirani, Head - Corporate Strategy, Robinsons Global Logistics Pvt. Ltd, noted. "Cold chain infrastructure is very sporadic. The concept of "Integrated Cold Chain' is non-existent. Mojor investments in these infrastructures have come from government agencies like CWC, SWC and CONCOR."

Quality
According to Hegde, the bulk of warehouses is poorly constructed and equipped with equally poor material handling equipment. These are available at very low rates. "While we are seeing a slow shift by the users to better quality warehouses, this may take substantial time, though unplementation of the goods & Service Tax could see the shift speeding up," he said.
Anand said that many of the existing warehouses were outdated and served as mere godowns. About 90 per cent of the warehouses still had asbestos roofing with minimal automated material handling systems.
Explaining the private sector scenario. Vazirani felt that current private sector initiatives were small and sporadic. "Private sector warehousing is of poor quality, small, fragmented, and do not meet infrastructure standards. No quality standards or benchmarks are followed in infrastructure creation." She lamented.

Capacity and demand
India is estimated to have about 1,800 million sq.ft of warehouseing space, with 8 per cent of it being owned and operated by organised players. To complement growth of the logistics sector, India needs at least 25-30 million sq.ft of additional warehousing space annually. Similar shortfalls exist in the cold-chain industry which is estimated at anywhere from Rs. 8,000 crore to Rs. 10,000 crore.
If waste and inefficiency are the parameters to go by, it is estimated that about $45 million more would be spent on the logistics sector. Current logistics spend is about 12 to 14 per cent of GDP and elimination of inefficiencies can bring about around 4 – 5 per cent of savings. This scenario will change with consolidation taking place post – GST. Add to this government investment in infrastructure deveopment will see optimisation of efficiency in cost reduction.
In case of the air cargo warehouseing infrastructure, Rhea A. Vazirani of Robinsons Global Logistics said that there was an urgent need for air cargo processing space in light of cargo capacity enhancement at airports and the arrival of wide-bodied aircraft capable of carrying substantial cargo at economical costs. The current capacity of air cargo warehousing space is just over 50,000 sq. meters and the total processing space requirement exceeds 200,000 sq. meters. There is also an urgent need to create modern agro warehouses.
Retail and agriculture would be the top demand drives for warehousing infrastructure Ararsh Hegde of Allcargo Global Logistics said. This would be a direct result of increased manufacturing activity and consumption, he added.
At present, organised retail accounts for 5 – 8 per cent of the local warehousing space, a spare that is estimated to reach 15 percent in coming years. However, it will require the creation of huge backend infrastructure.

Private participation
According to Vazirani, the private sector had been disinclined to enter this business through much of the 20th centrury because of high capital. Returns were long to come and often uncertain. Banks and financial institutions too were wary of funding warehousing businesses, thereby limiting the scale of private participation in this segment. Hence, majority of the warehousing business is managed by the government but future expansion will come about mainly with private participation.
The warehousing landscape changed at the turn of the century, with the government creating favourable conditions for private investment. Fiscal incentives are likely to be extended to the cold-chain logistics industry in the near term. Investments into warehousing are also coming through the PE route.
If recent reports were anything to go by, Hedge said, the warehousing sector could grow by about 40 per cent year-on-year to become a $55 billion industry by 2011. Accurate data is not available to estimate the investment values needed for upgradation. This is due to the huge unorganised play in the sector, he added.
Vikas Anand of DHL Supply Chain (India) Ltd is of the opinion that the overall requirement of large-scale quality warehousing space could be expected to increase dramatically post-GST. There are quite a few players in the private sector in logistics, real estate, and infrastructure development that have either started building these mega hubs or are planning to do so. Quite a few Indian banking and acquiring land to build such hubs. Or logistics parks. Therefore, the excitement in invest in quality warehousing across India is gaining pace.

Policy initiatives
The much-delayed Warehousing (Development and Regulation) Act, 2007 came into effect from October 25, 2010. As per the act a Warehouse Regulatory and Development Authority (WRDA) will be set up. All the warehouses in the country will need to register with WERA. This is expected to bring in better quality warehousing infrastructure. The registration of all warehouses with WRDA will also provide better data of available warehousing capacity in the private sector, thereby ensuring better planning to develop warehousing infrastructure in future.
With the introduction of the Goods and Services Tax in April 2011, the warehousing infrastructure across India, expecially at the region level, is expected to receive a boost. Once GST comes into force, there are strong indicators that manufacturing and production may want to shift to regional warehouses. GST is likely to also boost the overall logistics sector as the new regime will propose a comprehensive indirect tax on manufacture, sale and consumption of goods and services nationally.

Conclusion
The warehousing infrastructure available across the country, both qualitatively and quantitatively, requires much better investment and planning. Till now, the private sector was disinclined to invest in this critical segment of logistics because of the absence of government incentives, high capital expenditure, uncertain policies, and low and longer duration of returns. Going forward, the private sector's role in warehousing infrastructure will be significant. Technology integration through warehouse management systems and other IT products will be the determining factors in near future.
Many of the existing warehouses are outdated and serve as mere godowns.

Warehousing Act will create an organised system
Adarsh Hegde: The Warehousing (Development and Regulation) Act will eliminate non-registered and pseudo-warehousing companies. Farmers would use the warehousing receipts as a tool to safe keep the goods. This will enhance the credit availablity by the leading institutions. The warehouse receipt under this Act will become a negotiable instrument. The farmers' liquidity will improve and shield them from distress sales. It will bring forth an organised system as opposed to the current scenario.

Viewpoint
Vikas Anand: The Warehousing (Development and Regulation) Act will create a system which will amndate the issue of negotiable warehouse receipts, it also prescribes a from and manner of registration of warehouses and the establishment of Warehousing Development and Regulatory Authority. This act will help farmenrs avail of better credit facilities, avoid distress sales, and safeguard financial institutions by mitigating risks inherent in credit extension to farmers. The pledging/ collateralisation of agricultural produce with a legal backing in the form of negotiable warehouse receipts will lead to increase in flow of credit to rural areas, reduce cost of credit, and spur related activities like standardisation grading, packaging and insurance, and in developing a chain of quality warehouses.

Top
Reflections
Maritime Gateway 01-Jan-2011
- Performance of the logistics sector in 2010
The growth prospects of the logistics sector are closely linked to the overall growth of the economy and foreign trade. As per the Indian Port Association (IPA) data for November 2010, container volumes at 12 major ports registered a growth of 12.6 per cent YoY, but declined 3.0 per cent on a MoM basis. The country's infrastructural requirements have quadrupled over the past decade and would further multiply in the coming years. This has given a major fillip to firms providing project logistics and specialised engineering solutions. The Indian Government is expected to spend about US$ 500 billion on the development of logistical infrastructure in the coming decade. Logistics is an integral part of growing economy such as India and the industry has done well here inspite of the recession and is competing with the global market.

Growth forecast for 2011
We believe that sustained growth in the Indian economy, with GDP growth expected at 8.5 per cent over the next few years, as well as emergence of India as a global outsourcing hub will facilitate the country's container trade. The industry is expected to reach a size of US $120 billion by 2014 on account of expanding domestic economy. This translates into a growth rate of nearly 12 per cent per annum. Ancillary services such as CFS, ICD and warehousing would benefit immensely with increase in cargo and container movement. The country's ability to cater to infrastructural development will accelerate to growth of specialised services such as project logistics and customised engineering solutions for large cargo movements. An estimated Rs. 2.7 trillion, equivalent to around 8.2 per cent of the GDP, was spent on logistics in 2008-09 and this is bound to grow in the coming year. The logistics sector is poised for growth in the coming years and the whole nation will benefit from the same.

Plans & targets
The year 2010 has been a very eventful year in terms of business for Allcargo Global and our Q3 results projects the growth path the company is currently on. The MTO volume has increased both in import and export segment, aggregating a 15 per cent YoY growth for the last quarter. The growth in this segment was powered by the performance of the global subsidiary of Allcargo Global Logistics, ECU Line. Our consolidated net sales for the third quarter have grown by 41 per cent to Rs. 704 crore and PAT has increased by 57 per cent to Rs. 57 crore. The project logistics and engineering solutions division has performed well, and has an order book of Rs. 200 crore. In November, Allcargo acquired two firms engaged in the NVOCC business in China and also ventured into shipping with the acquisition of two japanese made vessels. Our overall mission is to become a billion-dollar company by 2013-14 and keeping this in mind, we have chalked our extensive plans for the coming year.
Our Capex plans for each vertical are as follows:
- CFS - Addition of capacity at JNPT and exploring other locations through organic and inorganic growth. Allcargo has earmarked Rs. 100 crore for this endeavor.
- ICD - We have set aside Rs. 40 crore to establish a pan-India presence with expansion to Hyderabad, Dadri, Nagpur and Bangalore (land already acquired) through strategic joint ventures. The ICD in Hyderabad will be developed in 2011 and expansion at Bangalore and Nagpur will take place in the coming years.
- Tp expand as a 3PL Player Expand strategically into warehousing to ultimately provide integrated 3PL services through organic and inorganic growth models. And, utilise existing land bank in place to build state-of-the art warehouses.
- Project Engineering & Solutions - The division would focus on high growth sectors through investment in high-quality assets and provide a unique offering of integrated projects and equipment solutions. Allcargo has set aside Rs. 50 crore for this expansion.
- Global LCL Business - We would undertake tactical acquisitions in regions were Allcargo is present but does not have significant presence. Leverage potential opportunity for creating more profitable trade lanes through network expansion. Undertake expansion and set up an office in Saudi Arabia in 2011.
Top
Allcargo plans to spread wings, hike capacity
Economic Times (Mumbai) 22-Nov-2010
- The leading logistics operator is setting the stage to exploit the resurgence being seen in the exim trade globally
Allcargo Global Logisitcs will spend Rs. 250 crore as capital expenditure in the calendar year 2011. The company, which is looking at becoming a billion-dollar global enterprise by 2013-14, will embark on capacity expansion at its container freight stations (CFSs) at Jawaharlal Nehru Port Trust (JNPT) and other ports with an estimated investment of Rs. 100 crore. The company will invest Rs. 40 crore for its warehousing capacity expansion at Verma (Goa), Hosur (Tamil Nadu) and Nagpur (Maharashtra).

The Shashi Kiran Shetty - promoted company has recently announced its foray into third party logistics (3PL) business. Allcargo Global will also invest in developing its Inland Container Depots (ICDs) in Dadri and Hyderabad with an estimated investment of Rs. 20 crore. Apart from the Rs. 50-Crore spending from projects and engineering fleet expansion, the company will have a regular capital expenditure of Rs. 20 crore in 2011. In the calendar year, Allcargo Global has roughly spend Rs. 300 crore as capital expenditure in expanding capacity at CFSs in Mundra and Chennai.

In late October, Allcargo Global officials have announced that the company through its step-down wholly owned subsidiary has acquired business rights and controlling stake in Hong Kong-based companies engaged in NVOCC (Non Vessel owning Common Carrier) business in China and other parts of eastern regions. The acquisition is in furtherance to the expansion plan of the company’s NVOCC business. The company will be allotting about Rs. 100 crore towards the acquisition.

According to the company, the acquisition would further strengthen its profitability stream (EBITDA) by adding about $3.53 million on a yearly basis. Further to augment the project cargo movement business, Allcargo Global, through its wholly-owned subsidiary, has acquired two vessels having a capacity of around 6,500 dead weight each. As a result, the company would save substantial cost on ship chartering and hiring and would help it in planning and execution of project cargo movements in an efficient and effective manner and would further help it to capitalise the opportunities, including costal movement, in the Indian sub-continent. The capital expenditure for next year is aimed at augmenting its capacity across the country. According to Allcargo officials, the company is adding capacity at JNPT and exploring other locations through organic and inorganic growth modes. After capacity expansion, total CFS capacity is expected to be about 341,000 TEU per year. Its capacity at JNPT, India's leading port that handles 60% of the country's container traffic, is 144,000 TEU/ annum. In Chennai it is 120,000 TEU/ annum and at Mundra 77,000 TEU/ annum. Following the acquisition in Hong Kong, the company is also looking at tactical acquisitions in regions where Allcargo is present but does not have significant presence to augment its LCL (Less than a Container Load) business.

Besides its plan to consolidate its stake in ECU Line, the company has ambitious plans to leverage potential opportunities for creating more profitable trade lanes through network expansion. Its global footprint through various acquisitions prompted private equity firm Blackstone Group to invest an additional $23 million in Allcargo, taking its total commitment to $75 million over two phases in the last two years.

Net profit of Allcargo Global Logistics rose 25.17% to Rs 39.14 crore in the quarter ended September 2010 as against Rs 31.27 crore during the previous quarter ended September 2009. Sales rose 48.29% to Rs 196.52 crore in the quarter ended September 2010 as against Rs 132.52 crore during the previous quarter ended September 2009.

Allcargo's expansion comes at a time when volumes at India's 12 major ports declined 4.9% YoY and 4.5% MoM to 42.8 million tonnes during August 2010, primarily due to the fall in iron ore and POL (petroleum oil and lubricants) throughput. Containerised traffic declined 2.6% YoY (in tonnage terms to 8.3 million tonnes) and 4.8% YoY (in TEUs to 0.56 million TEUs) in trend with the 4.9% decline in overall port volumes. Volumes at JNPT, India's largest container port, declined 14.8% YoY (down 19.3% MoM) to 0.29 million TEUs, mainly to the complete closure of the port for five days. Chennai port however continued its good performance with volumes growing 22.9% YoY to 0.13 million TEUs.
Top
Ready To Deliver
Economic Times (Mumbai) 22-Nov-2010
- Given Gateway Distriparks' expansion plans and growth prospects, investors can consider buying it for the long term
GATEWAY Distriparks (GDL), a mid-sized logistics player, is present across different segments including warehousing cold chain facilities and rail and road transportation. It has benefited from a strong revival in the demestic sector and the country's extemal trade. Gateway Rail Freight (GRF). A subsidiary of GDI, had received Rs. 300 crore from private equity player blackstone group in August 2010 as per the shareholder agreement entered earlier. The funds received are used to expand its existing rail terminals at Garhi Harsaru (near Gurgaon) and Sanehwal (Panjab), and for develping new rail terminal at Asaoti, Faridabad, GDL will also set up a greenfield container freight service (CFS) facility at Kochi.

This expansion by Gateway Distriparks appears timely given the rapid expansion in key user industries, like the country's industrial and capital goods sector, planned over the next few years.

LOGISTICS NETWORK: The company is present across different segments of the logistics sector. In its CFS business, its network includes those at JNPT, near Navi Mumbai, and at Chennai and Vishakhapatnam. The company handled 3.03 lakh TEUs (twenty foot equivalent) at the end of March 2010, a CAGR growth of 10.7% from three years earlier, GDL receives import and export cargo from its clients at its CFS located close to ports and they are suitably transported to their final destination.

Its subsidiary, GRF had commenced continer rail operations during the year ended March 2008, with the deployment of eight container trains. And by the end of March 2010, GRF owned and operated 18 container trains and 235 road trailers for meeting the needs of customers in the domestic and the export import segment. It also provides rail and transport services from Navi Mumbai. GRF is developing a terminal at Faridabad to cater to the needs of its clients in New Delhi and adjoining areas. This facility is expected to be operational over the next few months. The company's rail operations namely Gateway Rail Freight, had posted a net loss of Rs. 12.7 crore on consolidation after minority basis for year ended March 2010. However, the largest player in the domestic container rail traffic segment is the government controlled Container Corportation of India. In addition, GDL through its subsidiary snowman Frozen Foods (SFF) is one of the few pan-India cold chain logistics player. Gateway distriparks has a 48.9% stake in Snowman Frozen Foods at the end of March 2010.

Financials:
The pick-up in the country's external trade helped its CFS volumes grow 5.6% year-on-year to 83,500 TEUs in the second quarter, while realisations also improved 6.5% per TEU, and its helped the company's standalone operating profit margin improve 80 basis points year-on-year to 49.8% in the September 2010 quarter, Its net sales also rose 6.1% in the quarter.
The company had invested Rs. 481.2 crore on a standalone basis during the three years ended March 2010, while its operational cash flow during this period was Rs. 385.9 crore.
However, as the company was able to quickly deploy its expanded logistics network, it was able to keep its debt at very low levels during this period.

VALUATIONS:
Gateway Distriparks, at Rs. 112 per share, gets a P/ E of 15.6 times on a standalone basis, on a trailing four quarter basis. The largest domestic logistics player Container Crop trades at a P/ E of 21.3 times, while Allcargo Global Logistics trades on a consolidated basis at 13.1 times. Given its expansion plans and robust economic prospects in the country, investors can consider buying Gateway Distriparks for the long term.
amrit.mathur@timesgroup.com
Top
Allcargo Global Logistics
Business Standard (Mumbai) 19-Nov-2010
- RECO PRICE : Rs. 166, TARGET PRICE: Rs. 217
Allcargo Global Logistics' (AGL) consolidated 3QCY2011 results were significantly above expectations, on account of strong performance across segments. During the quarter, the company re-assessed useful life of its cranes, which resulted in lower depreciation thereby boosting profit by Rs. 11 crore to Rs. 57 crore. ECU line continued its strong performance and registered year-on-year revenue and profit growth of 27 per cent and 77 per cent, respectively, thereby emphasising our call of sustainable recovery in margins. The stock has grossly underperformed since the last one year owing to subdued performance by ECU line; however the subsidiary has been gaining traction since the last two quarters. Maintain 'Buy'.

- Angel Broking
Top
After China, Allcargo sets sights on the US
DNA (Mumbai) 17-Nov-2010
- May venture into multi-modal transport operations business there
After expanding into China, Allcargo Global Logistics, a leading domestic logistics services provider plans to establish presence in the US.

The company is currently considering various options to take this expansion plan forward.

Shashikiran Shetty, chairman and managing director, Allcargo Global, said the company is looking at a possibility of expanding presence in the US markets in the multi-modal transport operations business.

"We are examining options available for the expansion. US is an important market, as the volumes moved between China and America in substantial. At this point of time, starting in US would be fairly as easy decision. However, we want to compare the available options". Shetty said at an analyst meet on Tuesday.

Last month, the company announced acquisition of two Hong Kong - based companies with presence in the non-vessel-operating common carrier business in China and other parts of eastern regions. Officials said with this acquisition the company has been able to achieve presence across the main cities in China, except for a couple of highly competitive cities.

The company is also looking at doubling its container freight station capacity near Jawaharlal Nehru Port Trust in Mumbai. The current capacity is around 144,000 twenty-foot equivalent units.

"For the current financial year, Allcargo plans to cross as Ebidta of around Rs. 300 crore," a company source said.
Top
Mid-Term Picks

Economic Times (Mumbai) 15-Nov-2010

A HIGH VOLUME growth is expected in its European subsidiary-ECU Line, and through the acquisition in China, the co is expanding in the profitable the CFS business (JNPT and Mundra CFSs). It has a low debt-to-equity ratio of 0.1x in CY11E. It’s currently trading at a low valuation of 11x CY11 EPS.

Top
Allcargo Global Logistics

ET 500 (Mumbai) 01-Nov-2010

Allcargo Global Logistics, a leading global player in the less than container load (LCL) category has benefited from a strong growth in external trade between Europe and emerging markets, over the past few years. Its revenue and net profit have grown at a compounded rate of 32% and 30% in the last three years respectively. The momentum is likely to continue considering the stellar performance of its overseas subsidiary-Allcargo Belgium. With a share of close to 70% in revenue, it would set the tone for the overall performance of the company in the near term.

Top
Allcargo Eyes On NVOCC Business

Industry 2.0 01-Nov-2010

Mumbai-based logistics service provider Allcargo Global Logistics, involved in Multimodal Transport Operation (MTO), owning and operating containers Freight Station (CFS) and handling project cargo, has acquired business rights and controlling stake in two Hong Kong - based companies engaged in Non Vessel Owning Common Carrier (NVOCC) business, through one of its wholly owned subsidiaries.

"The acquisition, valued at approx USD 22 million, is a step towards the company's expansion plan in the NVOCC business. With a view to expanding its cargo movement business. Allcargo has also acquired two vessels with a dead weight of approximately 6,500 tons through its wholly owned subsidiary company."

Shashi Kiran Shetty, Chairman and Managing Director. Allcargo, informed "This acquisition will further expand Allcargo's growth organically. Strengthening the company's operating profit by adding approximately USD 3.53 million on an annual basis. The company will save substantial cost on ship chartering and hiring-thus supporting planning and execution of project cargo movements in an efficient and effective manner. This further helps in capitalizing on opportunities in the Indian sub-continent including coastal movement."

He further added. "Those companies are agents of ECU line within the global network. China ia a leading international EXIM economy and large cargo volume generator. Through this acquisition we will further consolidate our position in the global LCL Market. The two companies employ 350 people. The group has its regional head quarters in Hongkong as has ambitious plans for the region."

Top
Allcargo Global Logistics Limited continues on its expansion
25-Oct-2010
- Acquires two Hong Kong based companies engaged in Non Vessel Owning Common Carrier (NVOCC) business in China and other parts of eastern region.
Mumbai, 25th Oct 2010: Allcargo Global Logistics Limited, a Mumbai based logistics service provider involved in Multimodal Transport Operations (MTO), owning and operating Containers Freight Station (CFS) and handling of project cargo, today announced an acquisition and controlling stake in Hong Kong based companies engaged in NVOCC business. The acquisition valued at approx USD 22 million has been undertaken in furtherance to the expansion plan of the Company of its Non Vessel Owning Common Carrier (NVOCC) business, through its step down wholly owned subsidiary.

To further expand into the project cargo movement business, Allcargo Global has acquired two vessels with a dead weight of approximately 6,500 tons through its wholly owned subsidiary company.

Speaking on the acquisition, Mr. Shashi Kiran Shetty, Chairman and Managing Director, Allcargo Global Logistics Ltd. said, "This acquisition will further expand Allcargo's growth organically, strengthening the company's operating profit by adding approximately USD 3.53 million on an annual basis. The company will save substantial cost on ship chartering and hiring thus supporting planning and execution of project cargo movements in an efficient and effective manner. This further helps to capitalize on opportunities in the Indian sub-continent including coastal movement."

He further added, "These companies are agents of ECU line within the global network. China is a leading international EXIM economy and large cargo volume generator. Through this acquisition we will further consolidate our position in the global LCL market. The two companies employ 350 people. The group has its regional head quarters in Hong kong and has ambitious plans for the region".
Top
Allcargo embarks on an expansion drive of its Container Freight Station
06-Aug-2010
- To upgrade Mundra CFS by setting up a 2nd warehouse of 6,085 sq mtrs
- Plans to double its export handling capacity to 4,000 TEUs
Mumbai, August 6th, 2010: Responding to the growing market demand Allcargo Global Logistics Ltd, is all set to upgrade its Mundra CFS by doubling its export loaded volume. The CFS currently has the capacity of a single warehouse of 6,125 sq mtrs with 19,125 sq mtrs of paved yard. With the commissioning of the 2nd warehouse of 6,085 sq mtrs, the export handling capacity would go up to 4,000 TEUs per month.

This will increase the total handling capacity to 7,700 TEUs per month. At present the total handling capacity that includes export, import and empty handling capacity is 4,100 TEUs per month.

Speaking on the occasion Mr. Adarsh Hegde, Executive Director, Allcargo Global Logistics Ltd, mentioned "The expansion is an absolute necessity! The existing CFS is running optimally. In the last couple of years, we have observed a consistent growth in our customers' overall business, resulting in an increased demand for more storage space, logistics solutions and value-added services. Also diverse clients such as retail, fast moving consumer goods, automotive, pharmaceutical and frozen foods have specialized needs. This expansion is designed to cater to such diverse needs".

The facility has been built on a land measuring 28,375 sq mtrs, with a paved yard of 23,800 sq mtrs. The 6,085 sq mtrs warehouse is equipped with 24 X 7 CCTV surveillance and has the capacity to handle 2,000 TEUs of exports and 1,600 TEUs of imports per month. Allcargo Global Logistics, Mundra, has its own fleet of 12 trailers, 5 Fork Lifts of 3 MT capacity, 2 Fork Lifts of 10 MT Capacity for handling 20' empties, 2 Reach Stackers of 45 MT Capacity each and a 12 MT Hydra Crane. The facility is pilferage free with regulated entry of visitors at the gate, guarding personnel and adequate fire fighting equipments. Regular mock drills for health & safety are conducted.

"The CFS expansion project is initiated as part of the Group's business plan, which sets the framework for extending Allcargo's global presence while integrating and diversifying its range of services", mentioned Mr. Adarsh Hegde.

"In order to remain competitive, Allcargo global logistics will also continue to upgrade its warehouse management system, and implement process automations such as bar coding and scanning in the new enlarged facility. This will enable us to continue to serve the present and future logistics needs of our customers, and keep the company at the forefront of the logistics industry" added Mr. Hegde.

Cargos being handled here include: Bagged Cargo such as - Rice, Groundnuts, Sesame seeds etc; Heavy Machinery (Open Top, Flat Rack) Scrap, Stones (Crated and Blocks) Wooden Logs, Cotton Bales (Fire Sensitive Cargo).

At present Allcargo has three CFSs operational in Mumbai, Chennai & Mundra and one ICD facility at Indore. As one of the largest operators, Allcargo provides comprehensive multimodal transport solutions, under a single umbrella.
Top
Allcargo plans to double export handling capacity to 4k TEUs

Economic Times 04-Aug-2010

Multi-modal transport solutions provider, Allcargo Global Logistics, on Wednesday said it plans to double its export handling capacity to 4,000 TEUs (Twenty-foot Equivalent Units) per month from the Mundra Container Freight Station (CFS) after the commissioning of the second warehouse.

The CFS currently has the capacity of a single warehouse of 6,125 sq mtrs with 19,125 sq mtrs of paved yard. With the commissioning of the second warehouse of 6,085 sq mtrs in July this year, the export handling capacity would go up to 4,000 TEUs per month, a company press release said here.

At the same time, CFS total handling capacity would also increase to 7,700 TEUs per month as against the current capacity of against 4,100 TEUs per months which includes export, import and empty containers, the release said.

"The expansion is an absolute necessity. The existing CFS is running optimally. In the last couple of years, we have observed a consistent growth in our customers' overall business, resulting in an increased demand for more storage space, logistics solutions and value-added services," Allcargo Global Logistics Limited's Executive Director, Adarsh Hegde, said.

Also diverse clients such as retail, fast moving consumer goods, automotive, pharmaceutical and frozen foods have specialised needs and the expansion is designed to cater to such diverse needs, he said.

"In order to remain competitive, Allcargo Global Logistics will also continue to upgrade its warehouse management system, and implement process automations such as bar coding and scanning in the new enlarged facility," Hegde said.

Allcargo presently has three CFS' operational in Mumbai, Chennai and Mundra and one Inland Container Depot facility at Indore.

Top
Allcargo Global's Shashi Kiran Shetty receives entrepreneur of the year award

Ndtv Profit 16-Feb-2010

Allcargo Global Logistics has announced Shashi Kiran Shetty, chairman & managing director of the company has received 'entrepreneur of the year' award under service category from ernst & young on 16 February 2010. The award was presented by the former chief minister of Madhya Pradesh, Digvijay Singh.

Top