Logistics

D P World, NIIF to buy logistics unit of Kribhco for close to Rs 1,000 cr

P Manoj Mumbai | Updated on April 03, 2019 Published on April 03, 2019

Strengthens hinterland presence to boost volumes at its port terminals

Global port operator D P World Ltd in partnership with India’s National Investment and Infrastructure Fund Ltd (NIIF) is set to buy a controlling stake for close to Rs 1,000 crore in Kribhco Infrastructure Ltd (KRIL) which has a license from the Indian Railways to run container trains pan India.

Kribhco Infrastructure Limited is a fully owned rail logistics unit of fertiliser making cooperative society Krishak Bharti Cooperative Limited (KRIBHCO). The deal intensifies consolidation in the container train logistics segment. It helps D P World boost volumes at its terminals.

KRIL offers multi-modal logistics services from its terminals/inland container depots at Hazira (near Surat in Gujarat), Hindaun City (Karauli) in Rajasthan, Pali (Rewari) in Haryana, Mohiuddinpur (Modinagar) in Uttar Pradesh and Timmapur near Hyderabad (a joint venture with CMTL). It runs 8 railway rakes and 1,350 containers.

KRIL terminals are full-fledged multimodal logistics hubs and are notified as Private Freight Terminals (PFT) by Indian Railways providing services to both export-import and domestic sectors with value added services so as to give the customer a single window for all logistic requirements.

The ICD at Pali (Rewari) facilitates double stack container train operations which reduces cost of transportation by about 25 per cent. It’s jetty at Hazira (Surat) with a draft of 4.5 meters can be used for both rail and road movement. “The deal has already been done after final bidding and negotiations in late January, but an official announcement will be made only after meeting some financial milestones which falls in the first week of May and approval from the Railway Ministry,” a person with knowledge of the deal said, asking not to be named.

Rizwan Soomar CEO and MD, DP World Subcontinent and Ranadhir Reddy, CEO of KRIL were not available for comments

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The D P World-NIIF team pipped Allcargo Logistics Ltd to emerge the top bidder for KRIL. Other contenders including state-owned Container Corporation of India Ltd (CONCOR) and Adani Logistics Ltd dropped out of the race citing the “very high asking price”.

For KRIBHCO, KRIL had become an “under-performing” unit which was not giving commensurate return on investments, forcing the fertiliser cooperative to look for a buyer. Last week, Adani Logistics bought eastern and northern India-focussed container train operator Innovative B2B Logistics Solutions Pvt Ltd from private equity firm True North for Rs 331.50 crore, making it the largest private rail and logistics park operator.

The KRIL acquisition will be the third by Hindustan Infralog Private Limited (HIPL), a joint venture set up by DP World and NIIF to invest as much as US$ 3 billion to acquire assets and develop projects in ports, terminals, logistics, transportation and related sectors.

The JV acquired multi-modal logistics firm Continental Warehousing Corporation (Nhava Seva) Ltd (CWCNSL) in March 2018 that helps the Dubai government-owned firm enter related logistics segments complementing its core business and boost volumes.

In October 2018, the D P World-NIIF JV won a tender to develop and operate a Free Trade Warehousing Zone (FTWZ) on 18 hectares at India’s largest container gateway – Jawaharlal Nehru Port Trust (JNPT)- for $78 million.

D P World, the largest listed global port operator, has invested $1.2 billion in India since 1997 and is currently the only foreign port operator running six terminals at Mundra, Jawaharlal Nehru Port Trust, Chennai, Cochin and Vizag with a combined capacity of over 6 million TEUs accounting for a market share of about 30 per cent of India’s annual container volumes shipped through its ports.

Published on April 03, 2019
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