Singapore’s PSA buys 50 per cent stake in Indian logistics hub for $93 million from CMA CGM

P Manoj Mumbai | Updated on November 26, 2019

Move to garner more revenue from land side logistics

PSA India Intermodal Pte Ltd, a unit of Singapore-based port operator PSA International Pte Ltd, has acquired a 50 per cent stake for $93 million in an Indian logistics hub from French shipping group CMA CCGM S A.

“PSA Intermodal Pte Ltd has signed an agreement to acquire CMA CGM’s stake in Ameya Logistics Pvt Ltd,” a spokesperson for PSA India told BusinessLine. The investment is subject to the fulfilment of conditions precedent, he added.

A CMA CGM official said it was selling the 50 per cent stake it held in the Indian logistics hub for $93 million (of which $85 million is at closing and $8 million of earn out) and the deal is expected to be closed in the first quarter of 2020.

Marseille-based CMA CGM, the world’s fourth largest container shipping company, held the 50 per cent stake in Ameya Logistics Pvt Ltd, the entity that runs a container freight station (CFS) near Jawaharlal Nehru Port Trust (JNPT), India's busiest container gateway.

Ameya Logistics, in turn, held a 51 per cent stake in CMA CGM Logistics Park Dadri, located in Greater Noida, Uttar Pradesh with Container Corporation of India Limited (Concor) holding the balance stake.

Ameya Logistics also held a 55 per cent stake in Honeycomb Logistics Pvt Ltd, which runs a CFS at Mundra in Gujarat.

The purchase of the 50 per cent stake in Ameya Logistics will help PSA get stakes in the other two facilities as well. This is part of a plan by the container terminal operator to diversify business and garner more revenue from inland logistics.

PSA International, the world’s biggest container port operator by volumes, is fully-owned by Temasek Holdings Pte Ltd, the sovereign wealth fund of Singapore.

It is one of the biggest investors in India’s port sector, running container handling facilities at JNPT, Chennai Port Trust, V O Chidambaranar Port Trust (all major ports owned by the centre) and at Kakinada port in Andhra Pradesh, on India’s eastern sea board.

'We are constantly exploring; India is not off the page'

In 2018, during a visit to India to open PSA’s biggest terminal in the country at JNPT, Tan Chong Meng, Group CEO, PSA International, told BusinessLine that the port operator was scouting India’s vast cargo hinterland for potential acquisitions.

“We are involved in inland container depots (ICDs) in a number of other countries. We are constantly exploring; India is not off the page. We are interested in the hinterland logistics,” Meng said.

“We have grown our presence in India organically. We didn’t buy over network from somebody else. We grew by knowing people. Short answer is that, if there is a good opportunity, we would add that on to the network we already have. Because, bear in mind that before BMCT (it’s terminal at JNPT), our market share in India was 13-14 per cent, with BMCT we have the potential, within a few years, to get to maybe 20% or even above that and that is a meaningful percentage. With today’s technology, presence in the hinterland side in the key hubs called ICD’s may also be meaningful so that we can serve customers at more points, all the way nearer to destinations,” he said.

“It will be interesting to look at the hinterland. I would love to have a good project. The train will be the key driver that says how fast we grow. With India as a consuming power-house, inland logistics is not a bad idea,” Meng added.

The acquisition of the 50 per cent stake in Ameya Logistics would add more value with the much awaited opening of the Dedicated Freight Corridor (DFC) which links PSA’s terminal at JNPT with the National Capital Region (NCR) .

Published on November 26, 2019

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