The Hindu Business Line : Coir Board seeks to rope in Commerce Ministry

Coir, the lifeline industry of Kerala, is located mainly in Alappuzha and generates an export business of Rs 400 crore. A CFS at Alappuzha would lead to time and cost savings for exporters.

Given the large volume of export cargoes such as coir and marine products emanating from Alappuzha, in Kerala, the Coir Board has approached the Commerce Ministry to sanction the setting up of a container freight station there. Alappuzha, known as the Venice of the East, exports large quantities of marine products and rubber, garnering nearly Rs 700 crore by way of foreign exchange. Coir, the lifeline industry of Kerala, is located mainly in the district and generates export business of Rs 400 crore thereby constituting 90 per cent of coir exports from this part of southern Kerala.

Though Alappuzha is connected by rail, most of the products meant for exports are moved by road, which is not only time consuming but also expensive. The cost of transporting a 40-ft container from Alappuzha to Kochi is Rs 4,500. If the same container could be despatched through rail, it would cost less than Rs 1,500 and the travel time is just two hours. Alappuzha accounts for 16,000 containers a year, the coir industry taking half of them.

To cut cost, save time

By setting up a container freight station at Alappuzha, exporters can reduce their transaction costs and save time. The Coir Board Chairman, Mr A. C. Jose, said that several studies have revealed that the industry would be able to gain 45-50 per cent of its transaction costs if the movement of container could be by rail. Setting up an ICD at Alappuzha would be an ideal way to slash transaction costs. Moreover, he pointed out that there are immense possibilities of conveying goods through waterways, as canals and rivers surround the area. The Coir Board, he said, has targeted a exports of Rs 1,000 crore from this centre by 2011 as part of its Eleventh Plan projections. By setting up a facility for the benefit of exporters, it would considerably reduce the cost thereby giving coir products thecompetitive price advantage in the world markets. He requested the Ministry to designate Alappuzha for a CFS so that the Board could set up an ICD by involving Concor in the special purpose vehicle, which would be created jointly with the various stakeholders.

Moreover, the setting up of a CFS would also help offer air cargo for international destinations from Alappuzha as 10 per cent of the cargo from the district is accounted by air shipment from the Kochi International Airport situated 100 km away.

Further, as all the cargoes are LCL (less than container load) bonded trucking to Kochi Port, there would be no queue or unnecessary wait for the cargo, as the cargo is transferred to C&F godown, where there is a cost factor for unloading, loading, and godown charges.

The changing trends in international business coupled with increase in volume have made cargo operations at gateways more cumbersome. Therefore, facilities and services closer to the business community would be a more logical alternative. According to him, the coir exporters jointly with the stakeholders would procure five acres adjacent to the railhead, for the CFS. The Coir Board would give all support to the export fraternity to set up the CFS. It would form an SPV with Concor, and maintain the CFS.

The services that would be offered at CFS include outbound ocean cargo through all gateway ports, air cargo to Mumbai via Kochi air cargo complex, air cargo bonded trucking, LCL bonded trucking to Kochi, FCL/LCL import transhipment from Kochi, etc.

The Coir Board had also requested the Ministry to sanction Rs 1 crore to set up the ICD and Rs 50 lakh to construct a jetty. The Board would approach the Central Board of Customs and Central Excise to get mandatory approval for designating Alappuzha for a CFS, he said.

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