Concor may sell 51% in logistics parks

State-run logistics and rail freight firm Container Corporation of India (Concor) may hive off its upcoming logistics parks and offload up to 51 percent equity in each of them to a partner from among customers, landowners or logistics players, a senior executive said.

"Somewhere if I feel the logistics parks would be better off as SPV or JV with a customer or a strategic partner, then I may hive it off as a separate company," P. Alli Rani, director (finance), told Reuters.

"There are some people who have approached us. We could get into JV with any one of them," Rani said, adding a deal could go through in 2011/12.

Container Corp plans to invest about US$66.44 million in the first phase to set up three logistics parks in Punjab, Gujarat and Rajasthan by March 2012.

Setting up these parks is part of Container Corp's plan to shift from "being merely a rail operator into a multimodal logistics provider".

At present, its 60 inland container depots provide warehousing facility for goods that Container Corp transports, but with logistics parks, the company is gearing up to offer warehousing and distribution facilities to all manufacturers.

"I can be a single window access for them (manufacturers)," Rani said, adding logistics parks would boost the company's margin, which in the transporartion business is squeezed by fixed railway haulage and heavy competition from the road sector.

Rani said recent policy changes by Indian Railways – allowing players like Concor to operate trains to carry select bulk goods and permitting private players to build freight terminals that would have rail access – have opened up a huge opportunity in bulk business.

"(The Railway's policy) opens up the sky for me. Goods train are 90 percent, container trains are only 10 percent," said Rani.

Container Corp plans to run some bulk trains in FY12 and is seeking licences to operate private freight terminals in five to six locations, Rani said.

Rani expects a 17-18 percent growth in both sales and profit in 2010/11 and a 12-13 percent growth in volume.

"Things are looking up and so we are very gung-ho about our future projects," said Rani.

This is an improvement on the outlook managing director Anil Gupta had given in March, where he expected a five to six percent rise in profit and an eight to nine percent growth in sales in 2010/11.

Concor is also looking for a partner to make a foray into coastal shipping.

"If dedicated freight corridor is going to be delayed, that could bring a lot of pressure on the movement of trains and trucks. So coastal movement could relieve a lot of this," Rani said.

Container Corp may take a decision on its entry in coastal shipping in 2011/12, she said.
(Source:www.cargonewsasia.com)