First Quarter performance boost for SCI

MUMBAI: Over the first quarter of the 2019-20 financial year, ending June 30th, the Shipping Corporation of India (SCI) achieved significantly improved financial results compared with the equivalent period in the previous year. 

The company’s consolidated income was up to RS 968.23 crores (US$ 134.96 million), from RS 913.09 crores (US$127.27 million) in the first quarter of 2018-19. Consolidated losses narrowed from RS 190.39 crores (US$ 26.5 million) to RS 28.90 crores (US$ 4.02 million) in this period. 

Chairman and Managing Director, Capt. Anoop Kumar Sharma, says, “This quarter was considerably better than the first three months of the last financial year because we were able to secure improved charter hires for our ships, and to have more operating days. Greater operational efficiencies have led to a much improved EBITDA margin as well.”

He continues, “Overall our performance over these three months was highly encouraging and was led by good results in the tanker sector, while dry bulk and offshore also did well. The one disappointment was the liner shipping business where the outcome was not so good.”

Looking forward to the rest of the 2019-20 financial year and beyond, Sharma is upbeat. “We expect these positive trends will continue, especially with regard to the tanker and dry bulk sectors which account for around 60% of our revenues,” he says. “I believe that 2020-2021 will be a turnaround year for shipping generally, as reduced newbuilding levels and more scrapping reduces overcapacity and improves the supply side. SCI stands to benefit from this.”

Current challenges for SCI include the impending IMO 2020 sulphur cap. 

In this context SCI has recently taken an important strategic decision, opting not after all to install exhaust gas scrubbers on its ships, but instead to utilise lower sulphur fuels. The general slowing of global GDP, the effects of the US-China trade war and US sanctions against Iran are all also impacting on SCI activities, Sharma points out.

SCI has a diversified business and is active in most shipping sectors. For the next few years the focus in terms of business development is likely to be on the Indian coastal and inland waterway markets. Over the past 18 months SCI has introduced two new coastal liner services: The Port Blair Service connecting Chennai-Kolkata-Port Blair and the East Coast of India Express Service which operates between Kattupalli, Krishnapatnam, Haldia, Paradip and Visakhapatnam. SCI also now has a dedicated subsidiary, Inland & Coastal Shipping Limited, to capitalise on emerging opportunities in the inland
waterway business. “The plan is to offer multipurpose inland waterway services, including ro-ro, in line with Government strategy,” adds Sharma.

Sharma reflects on a number of achievements during his time in charge at SCI. He says, “We now have a distinct strategy for expansion with processes in place to acquire second hand tonnage, and not to rely only on newbuilding orders. We can also now take part in auctions, bidding for the assets we require as they become available.”

“I hope to continue to be involved in shipping, as with my experience of leading both state owned and private companies, I have something unique to offer this industry.”

Mansukh Mandaviya launches 1st Phase of Rail Connectivity from VOC Port Marshalling Yard to Hare Island

TUTICORIN : V.O.Chidambaranar Port has its own railway system with yard facilities for loading, unloading, reception and despatch activities. It is also connected to the main line at Milavittan on Tuticorin – Madurai section of Southern Railway. The existing siding from Milavittan to wharf including Marshalling yard is being maintained by Southern Railway. 

 

There are a number of proposals for construction of new Thermal Power Plants and other industries in the vicinity of VOC Port Trust.

Based on various studies, it is forecast that the traffic of the Port will increase, especially in dry bulk cargo, in a big way. It is expected that by the year 2025, an additional traffic to a tune of  20 MTPA will be adding to the present level of traffic.

 

NEED OF THE PROJECT

The existing infrastructure facilities for handing Dry Bulk Cargo and space availability is not sufficient to handle the anticipated additional traffic. Hence it has become necessary to develop the Hare Island for transport of dry bulk cargo by providing necessary Rail connectivity facilities and mechanized loading arrangements for quick evacuation of cargo and meeting the future requirements of port.

Mansukh Mandaviya, Union Minister of State for Shipping (Independent Charge) flagged off the inaugural train on 23 August 2019 in the presence of VOC Port officials.

 

The work was executed through Indian Port Rail & Ropeway Corporation Limited,  a Government of India Enterprise under Ministry of Shipping.  The phase –I of Project has been completed. The facility created will accommodate loading of two BOXN Rakes simultaneously and has a capacity to load 10 to 12 BOXN Rakes of coal per day.

 

Commerce Minister meets Bankers, urges to ease export credit flow

NEW DELHI : As export credit continues to contract, Commerce and Industry Minister Piyush Goyal held a meeting with senior public-sector bankers to push for easier and greater flow of loans at cheaper rates. 

 

This comes amid expectations that the Government would soon announce a slew of steps to boost faltering export growth.

Both the Government and the Reserve Bank of India (RBI) are already in discussion to ease priority-sector lending norms for exports. Though the Central Bank is learnt to be reluctant to allocate a part of its foreign exchange reserves for export credit — as is being demanded by some — to boost flow of loans, it is amenable to changes in credit norms.

 

Currently, exporters with a turnover of up to Rs 100 crore each are eligible for credit under the priority-sector norms. Sources had earlier said that RBI was considering a proposal to either scrap or substantially double the limit to benefit more exporters. Similarly, the maximum sanctioned limit of loans is also likely to be raised to Rs 40 crore per borrower from the current Rs 25 crore. Even the cap on export credit at 2% of banks’ total loans could be relaxed soon.

According to the latest RBI data, banks’ export credit shrank as much as 36.1% year-on-year as of June 21, even on a low base (it had contracted 42.7% a year earlier). This is despite the fact that non-food bank credit grew 11.1%  y-o-y as of June 21 and overall priority-sector loans rose 10.2%.

 

Contraction in such credit flows has forced many MSME-exporters to shut shop at a time when a global trade war has already threatened to drag down both economic and export growth, industry has told the Government. 

 

Once tweaked, the revised priority sector lending norms and certain enabling guidelines are expected to release additional credit of anywhere between Rs 35,000 crore and Rs 68,000 crore for exporters, according to an RBI assessment.

Earlier this month, Finance Minister Nirmala Sitharaman, too, held a crucial meeting with both private and public-sector banks on easing the flow of credit to various critical sectors of the economy. To bolster State-run banks’ ability to boost lending, the Government has already said it will provide the budgeted Rs 70,000-crore capital to them “upfront” in FY20. This infusion is expected shortly.

Also, the Commerce Ministry has already circulated a cabinet note to phase out the flagship Merchandise Exports from India Scheme (MEIS) with a more WTO-compatible regime under which various State and Central levies on inputs consumed in exports will be reimbursed. Goyal has already held a series of meetings with exporters to address their concerns.

COSCO Shipping Ports’ Container volumes grows 5.4 in first half (YoY)

BEIJING: Despite the ongoing trade war between China and the US, Hong Kong-based port operator COSCO Shipping Ports ended the first six months of this year with a total throughput rise of 5.4 percent year on year (yoy).

The total container throughput increased to 59.8 million TEUs in H1 2019 from 56.7 million TEUs recorded in H1 2018.

As explained, the growth was backed by the increased calls from the shipping alliances at the group’s container terminals and the contributions from newly acquired terminals.

In particular, the total throughput from terminal companies in which the group has controlling stake increased by 14.6 percent to 12.4 million TEUs, accounting for 20.8 percent of the group’s total, and the total throughput from non-controlling terminals rose by 3.2 percent to 47.3 million TEUs, accounting for 79.2 percent of the group’s total.

 

Moreover, COSCO Shipping Ports saw a 4.5 percent increase in its revenue. The group reported a revenue of USD 517.9 million in H1 2019, against USD 495.5 million posted in the corresponding period a year earlier.What is more, total comprehensive income for the period surged to USD 162.5 million in H1 2019 from USD 94.9 million seen in H1 2018.

 

Future Prospects

Looking ahead, despite the fact that challenges do remain in the second half of 2019 with various uncertainties, global economic growth is supported to an extent by the market expectation that the low-interest rate policy will be sustained, according to the group.

COSCO Shipping Ports said it would continue to leverage on the synergies with the Ocean Alliance and its parent company, seize opportunities to cooperate with major shipping companies and ports companies to keep boosting throughput.

Port of Amsterdam Transhipment increases in the first half-year by more than 12%

MSTERDAM: Transhipment in the North Sea Canal Area of the seaports of Amsterdam, IJmuiden, Beverwijk and Zaanstad rose in the first half of 2019 to 54.1 million tonnes, an increase of 7%. This was the result of an increase in transhipment in the first six months of this year in the port of Amsterdam by 12.3% to 45.4 million tonnes – another record.

In IJmuiden, transhipment fell by 12.3% to 8.5 million tonnes, Beverwijk recorded a 23% increase to 349,000 tonnes and in Zaanstad transhipment fell by 13.2% to 72,000 tonnes.

 

Records

The increase in Amsterdam in the first half of the year was caused by both liquid and dry bulk and containers. Liquid bulk transhipment rose by 10.6% to 25.9 million tonnes. The 13.8% increase in dry bulk was caused by an increase in the transhipment of coal (23%) and grains (21%) to 17.8 million tonnes. The increase in coal transhipment can be attributed to exports to non-traditional markets. This is not expected to be structural. The increase should also be seen in the context of the sharp fall in recent years. Transhipment in the number of containers also increased by 35%, partly due to Samskip's short sea liner service that the port of Amsterdam focuses on.

 

Decreases

 

These records were also offset by decreases, including in breakbulk (down 20%). There was also a fall in the number of seagoing cruise ships visiting Amsterdam in the first half of the year. In 2019 this was 51, compared to last year’s 74. The introduction of the tourist tax for transit calls on 1 January 2019 led to a number of vessel owners moving to IJmuiden or Rotterdam. The number of river cruise ships that put into Amsterdam in the first half of the year was 1,189, compared to 1,272 a year earlier. This decrease was also caused by the tourist tax. The difference of 83 relates to transit calls. These are cruise ships which, like sea cruises,  are subject to tourist tax.

 

Remainder of 2019

Koen Overtoom, CEO of Port of Amsterdam: ‘After record transhipments in 2018, 2019 has also got off to a very good start. We expect the situation to stabilise in the second half of the year. The increase in coal transhipment has to do with favourable coal pricing conditions. The seasonal build-up of coal stocks later in the year is usually reflected in the transhipment figures. Last year also saw a significant decline in coal transhipment for the German hinterland due to the low water level. Growth in liquid bulk is expected to continue under the current favourable market conditions. We also expect to see further growth in general cargo.’

FIEO feels 15% growth in exports possible in this fiscal

KOLKATA: India needs to move fast when it comes to decision-making. Moreover, issues like refund of embedded taxes and legal complexities on land purchase need to be resolved in order to boost exporters’ confidence. According to Sharad Kumar Saraf, President, Federation of Indian Export Organisations (FIEO), despite trade headwinds there is scope for a 15 per cent growth in exports this fiscal.

But, such a growth is possible only when the Centre can ease regulations and increased capacities can be built for increased exports to US, China and the UK.

 

 With a trade war between the US and China, Indian exporters have been receiving a number of business queries. These are expected to materialise over a period of time. Similarly, Brexit will offer greater opportunities for Indian exporters. The Union Commerce Ministry recently identified over 200 products where India’s exports could be increased to the US, replacing Chinese goods, and 150-odd items where exports to China could rise.

 

 Be it the trade-war between US and China, or Brexit, there is opportunities that Indian exporters should take. 

A 15 per cent growth in exports this fiscal is possible. But for that the Centre must step in by easing regulations and other confidence boosting measures, he said.

 According to Saraf, the Centre has to come up with schemes that will help in allocation of land for setting up units. Regulations and legal issues relating to allocation or purchase of land should be taken care of, he said.

No impact of US-China trade war on India: Chief Economic Advisor August 28 , 2019

HYDERABAD: The ongoing trade war between United States of America and China will not have any impact on Indian export which is just below 2 per cent of the global trade, Chief Economic Advisor Krishnamurthy Subramanian said recently. 

Speaking to reporters on the sidelines of a programme here, he said the slew of measures announced by the Centre for the revival of muted growth in the economy were in the right direction, though it was necessary to focus on the 'structural reforms.' 

"Our exports share is still very small. Our share of global export trade itself is about 2%. Therefore, we still have enormous opportunity to grow. Even if there is actually some shrinkage in the pie of the global trade, still we can grow our pie. Exports cannot grow unless actually we emphasise on productivity, he said when asked about the impact of the tariff war between US and China on India.