JSW Infra plans to meet cargo handling capacity two years ahead of schedule

JSW Infrastructure, the infrastructure arm of the $12 billion JSW Group, plans to meet its stated cargo handling capacity of 200 million tonnes per annum (MTPA) from its ports business, two years ahead of schedule in 2023. This will then also open up scope for the company to revise its targets further.

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Arun Maheshwari, joint managing director and CEO told Financial Express that since 200 MTPA is looking feasible, the company is getting back to drawing boards and would like to take the target to a higher level which the company will decide upon in the next six months to one year.

“We have done enough investments in the last couple of years to increase our capacities and now is the time to sweat those assets and the next phase of expansions will start after a year or so,” Maheshwari said. So far, JSW Infrastructure has invested over Rs 7,000 crore to build the company’s current capacities of 150 MTPA. This includes the acquisition of a deep draft international coal terminal and a bulk terminal at Kamarajar Port (KPL) as well as coal and bulk commodity terminal at New Mangalore Port Trust (NMPT). The company is investing more than Rs 1,000 crore to acquire as well as modernise these port assets which has a combined cargo handling capacity of 17 MTPA.

Maheshwari said that the company is eyeing further acquisitions, and expansions through greenfield and brownfield capacities to meet its remaining target of 50 MTPA. “Lot of assets are available for acquisition in India, which we are assessing. We are also assessing some greenfield sites,” he said. He added that the company is looking at multiple opportunities that exist in the west and the east coast of India.

Besides, the company is also diversifying its cargo mix. “We are diversifying into LPG and LNG terminals starting in another couple of months. We got into container terminals earlier this year in Mangalore, so we are also diversifying in our cargo profile,” he said.

Further, the company is also working towards shedding its image of primarily a captive cargo company of JSW Group and serve a larger customer base. Acquisitions at KPL and NMPT are a step in that direction. “We want to grow and this was the quicker and better way,” Maheshwari said. Till now, the mix between captive and third-party cargo for JSW Infrastructure is in the 80:20 ratio. However, next year onwards, third party cargo will increase to 30% and the rest will be captive.

JSW already has a presence in western India with Jaigarh and Dharamtar ports in Maharashtra, and a terminal in eastern India at Paradip port. With the acquisitions at KPL and NMPT, the company gets access to south-east and south-west of India. The acquisition is also a strategic fit, as the company hopes to derive some synergy benefits between terminals at KPL and NMPT and the upcoming coal terminal at Paradip. “We are coming up with a coal terminal in Paradip and the consumer base is in south-east India, so probably it can bring synergy impact as we move forward,” he said.

The company will also be investing in improving capacity utilisation at these terminals. “As of now these capacities are not fully utilised, so a bit of investment is required in some equipment, automation, digitalisation those will be done so that we can utilise these terminals to their full extent,” he said.

JSW Infrastructure reported a year-on-year increase of 69% in the company’s consolidated net profit of Rs 126 crore for the six months ended September 30, 2020. The company’s consolidated revenue from operations increased by 22% y-o-y to Rs 619 crore during the period.