The Hindu Business Line : Mitsui keen on expanding presence in India

Mitsui OSK Lines Ltd (MOL), the $10.9-billion shipping and logistics major, is eyeing the possibility of developing the container and domestic logistics business in India.

The Japanese company is keen on equity participation in some of the Indian private port and infrastructure projects.

The company senior management, who were here to announce the setting up of a back office disaster recovery centre in Hyderabad, told Business Line that the company wants to expand its presence in India but is constrained by the infrastructure bottlenecks, which have hindered their plans.

The Managing Director of MOL (Asia) Ltd, Mr. Michael P.Y. Goh, and the Executive Officer of MOL, Mr Noburu Kitazawa, said that the company had drawn up major global expansion plans that would run into billions of dollars, and expect to double their overall handling capability by the year 2009 and possibly triple it by 2014.

"In this move, Brazil, Russia, India, and China form a formidable part of this growth. However, when it comes to India, we are extremely pained to note that the expansion is hit by limitations of infrastructure both at the ports and inland. And we expect this will take at least 5-10 years for real critical mass coming in," Mr Goh said.

Mitsui has already begun addressing sectors such as automotive and power (constituting LPG transport) in India.

Given the plans for new airports and port projects, MOL seeks to significantly expand its presence.

As opposed to India's overall container handling capability of five TU, Shanghai alone handles 18 TU, and China 60 TU. This is because China invested in infrastructure upfront and they are reaping its advantages. India needs to speed this up to get a larger share, they said.

The diversified 120-year-old company, which currently accounts for about four per cent of overall global market share, has targeted seven per cent share by 2009.

Mitsui manages more than 600 ships, handling about 24 million DWT, and has ordered for more than 20 ships in the range of 5,000 TU, 6,000 TU, and 8,000 TU.

"We have opened up the market for South Africa from Nhava Sheva. This channel transports Tata Motors cars and Mitsui also has a presence through Chennai port. However, there is huge untapped potential for the automotive sector. As Japanese and Korean carmakers seek to tap the export market, we expect to significantly grow this. LPG forms a big market," Mr Kitazawa said.

Sets up facility in Hyderabad

Mitsui OSK Lines Ltd (MOL) has set up its second business processing centre in India at Hyderabad, which would also serve as an alternative site or a disaster recovery centre.

MOL Information Processing Services (MOLIP) has grown rapidly in the last 11 months since setting up a centre in Mumbai.

The choice of a shipping company locating their centre in a place other than a port city came in as a surprise but the management said that the decision was made precisely to be away from a port centre.

The Managing Director of MOL (Asia) Ltd, Mr Michael P.Y. Goh, said the company has two overseas business processing centres, one in China and the other in Mumbai. While the Chinese centre provides services to China, Japan, Hong Kong and other countries in the region, the Mumbai centre supports the requirements of US and European countries principally.

The Hyderabad centre would be the company's third outside the US and apart from serving as an alternative site, it would handle some of the back office functions.

The Mumbai centre provides critical online support, right from handling issues related to bill of laden, tariffs, maintenance, financial and auditing related services.

Catering globally

Speaking to Business Line, Mr Goh said centres in India have turned out to be strategic and provide critical process work for the company's global operations.

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