The Hindu Business Line : `Port services: Infrastructure, the key' — Mr S. C. Saxena, Managing Director, TM International Logistics Ltd

PROVIDING various logistics related services such a port operations, ship chartering and freight forwarding not only for Tata Steel and Tata group companies but also for others is TM International Logistics Ltd, a joint venture between Tata Steel and Martrade Holding GmbH of Germany. Operating from Haldia, Paradip and Vizag the company is planning expansion at these ports, besides taking up ship chartering and freight forwarding. Mr S. C. Saxena, Managing Director, spoke to Business Line about the company, its operations and future plans.

Excerpts from the interview:

How was your company's performance in 2003-04?

Financially good, but not so in terms of volume. During the year our turnover at Rs 115 crore (Rs 73 crore in 2002-03) showed a jump of 58 per cent and profit-after-tax at Rs 11.66 crore (Rs 5.75 crore) more than 100 per cent. However, in terms of volume there was in fact a drop of two per cent at 4.18 million tonnes (mt) compared to 4.29 mt in 2002-03. The drop should be attributed to the more than 20 per cent, decline in limestone imports.

What kinds of cargoes do you handle?

Mostly bulk items such as imported coking coal and limestone and exports of iron ore, manganese, charge chrome and charge concentrate. But we also handle non-bulk items finished steel products, logs and containerised cargo.

We handle containers only at Haldia and in 2003-04 the container throughput was 3,800 TEUs, all exports, compared to 2,400 TEUs last year. The growth of log traffic, also at Haldia, was impressive at 60 per cent — 10,500 tonnes in 2003-04 as compared to 6,500 tonnes in 2002-03.

In which other ports you operate?

Paradip and Visakhapatnam. In 2002-03, we handled some quantities of cargo at Mumbai but nothing in 2003-04. We also handled limited quantities of manganese, two shipments of 20,000 each for exports, at Chennai.

Why didn't you handle any cargo at Mumbai last year?

In 2002-03 we handled about 3.87 lakh tonnes of thermal coal imports for Tata Power. In 2003-04, we lost the business because we could not compete with the private stevedoring firms quoting rates we were unable to match.

But Tata Power, if the report doing the rounds is any indication, will be requiring more coal for the proposed capacity expansion. Isn't it? Wouldn't you participate in that business?

One thing has to be remembered. No Tata concern will give us business just because we are part of the same group. We do not get any special favour. We have to quote competitive rates. We, therefore, have to step up our volumes. This is possible through development of proper infrastructure.

We have proposed to Tata Power to build on BOT basis a captive jetty for them and take upon ourselves the entire port operation. But we are yet to receive any response. The proposed jetty will be located close to the plant to cut down on the road transportation cost. Right now the coal imported has to be transported by road covering a distance of over 100 km.

Any infrastructure development plan for other ports...

At Berth No. 12 of Haldia Dock, we have already installed a German-built harbour crane at a cost of over Rs 15 crore. Since we also operate at Berth No. 8 of the dock, we are mulling acquiring one more such crane to facilitate the operation at the berth.

We plan to acquire a third harbour crane for Paradip port. If we can install it at Paradip, which has a much deeper draft than Haldia, we will be able to handle gearless vessels with much larger average parcel load than at present.

It benefits all — the port, the trade and, of course, our company.

Will you go for the same German brand?

Not necessarily. We've an open mind about it.

You also handled traffic for companies not belonging to the Tata Group, haven't you?

Yes, but not in large volumes. In 2003-04 we handled 3.85 lakh tonnes of traffic for companies outside the Tata group, posting a growth of 20 per cent.

The growth was largely due to the jump in iron ore exports — 1.7 lakh tonnes during the year under review as compared to nil in the previous year.

What are your plans for the current fiscal (2004-05)?

We've set a target of five million tonnes of traffic for the current year to be divided into various ports in the following proportions: Haldia and Paradip 2.4 mt each and Vizag and Chennai together the balance 0.2 mt.

We are exploring the opportunities for new cargo such as metal scrap at Visakhapatnam port.

At Chennai, also we are looking into new opportunities. So far we've only handled exports for Sandur Manganese.

You're also engaged in ship chartering and freight forwarding...

Yes. We have taken over these operations from the TKM division of Tata Steel. We started chartering business in June last year and freight forwarding in November. In 2003-04, nearly 80 per cent of our turnover came from the port operations.

We estimate that in the current year, port operations and freight forwarding will account for 40 per cent each and ship chartering the balance 20 per cent of the targeted turnover of Rs 250 crore.

We hope to do bulk freighting of five million tonnes as compared to 4.22 mt in 2003-04.

What is a major headache...

We have set a target of Rs 1,000 crore of business by 2008-09 and my biggest headache is how to achieve it in a fiercely competitive situation where the margin is low.

The problem is all the more because, in true Tata tradition, we have no choice but to stick to ethical practices and the corporate governance norms.