Why India should emulate Antwerp port’s value-added model

Inside many of the huge warehouses at Europe’s second-largest port located on the river Scheldt, some 80 km inland of the North Sea, workers are busy, continuously adding value to the cargo arriving from as far as South, North and Central America, Africa, West Asia and Far East.

Even cargo terminals have massive warehousing spaces at the Antwerp port in Belgium — some 6.3 million sq metres — where goods are not just stored, but cargo owners are also provided value-added services.

After the value addition — such as packaging of fuel additives, automobile additives and lubricants coming in bulk loads, into smaller parcel sizes for sales in highway stores; packing and sterilising bananas and other fruits to conform to regulatory standards in consumption areas; bagging and packing of plastic polymers coming from West Asia — the cargo is sent to distribution centres/consumers located all over Europe.

There is a factory inside one of the warehouses attached to the terminal run by Euroports Holdings S.à r.l., one of the biggest port operators in continental Europe, where paper reels coming from Scandinavia are cut into photocopying papers. Some of the logistics firms that do warehousing at Antwerp invest in their customers by “doing special things for them”.

For instance, Antwerp-based logistics service provider and port operator Katoen Natie has erected special machines at one of its warehouses that can detect odd plastic granules with spots. If left undetected, such imperfect granules can spoil the finished products. As the granules fall over a conveyor belt, lasers detect the spotted granules and reject them, while only pure white granules are collected at the bottom.

This is a machine which even the plastic granule maker doesn’t have, but the logistics service provider has designed, created and installed it.

“We try to grow with our customers by investing in equipment and automation and providing value-added services. Those kind of things makes them stay,” says An D’Hondt, Head of Healthcare business at Katoen Natie.

Likewise, at one of the seven steel service centres in the port, huge steel coils coming from India or other regions are cut to the lengths required by the customer for easier handling, and despatched.

Value addition is the strength of Antwerp, which handled over 214 million tonnes of cargo, including 10 million-plus twenty-foot equivalent units (TEUs), in 2016.

The total value-add in the port is about €20 billion a year.

Antwerp handles more containers than all of India’s major ports do together.

Nowhere is the port-led development model pursued by Prime Minister Narendra Modi more palpable than in Antwerp.

The port is home to a huge petrochemical complex where biggies such as German chemical giant BASF and speciality chemicals company LANXESS have been operating for many years. Oil companies such as Total and ExxonMobil run facilities in the port’s backyard, supported by logistics firms such as Katoen Natie providing value-add services. For some years, the port even had a plant of carmaker General Motors, which is now shut.

The SEZ policy at Antwerp is so liberal that anyone can make their own self declarations and make an area bonded or non-bonded. “If you are bringing goods in, and are going to offer value additions, there is no duty or VAT,” said a port official.

“Being an inland port is not a problem; it’s more a strength for Antwerp because you are closer to your consumers — distribution centres of Europe,” says CEO Jacques Vandermeiren, who took over the role in January, making him the first new CEO in 25 years. “While ships have to come up over the Scheldt, spending an extra hour or two, coming from India, China, etc, those two extra hours are not an issue because you are landed more inwards and what you lose in time, you win in the second part of the journey — be it on barges, trains or trucks.”

Effectively, cargo can reach the entire Europe in 24 hours either by barge, truck or rail. But most of it is by truck because Antwerp is at the cross-roads of all the European highways.

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