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Essar Ports plans Rs 3,200 crore investment in three terminals

The investment would be made at its Salaya and Hazira terminals in Gujarat and an overseas one in Mozambique

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Essar Ports is planning to invest Rs 3,200 crore to expand its terminals in Salaya and Hazira in Gujarat and set up a new coal terminal in Mozambique in the next 30 months.

The company is about to complete Rs 2,800 crore expansion of Salaya and Vizag terminals started six years back.

“The existing capacity of our terminals at Salaya and Hazira will be augmented. We have signed a memorandum of understanding for a new terminal at Salaya in Gujarat,” Rajiv Agarwal, chief executive officer, Essar Ports, said.

It plans to have a mix of dry bulk, liquefied natural gas (LNG) and liquid cargo terminal at Salaya.

The company is also looking at LNG terminals at locations including Hazira.

Currently, Essar Ports has presence at four locations – Salaya and Hazira, Paradip in Odisha and Vishakhapatnam in Andhra Pradesh. Now, it is looking at overseas presence with the Mozambique terminal.

Last year, Essar Ports through its subsidiary New Coal Terminal Beira SA had won a contract to to set up a 20 million tonne (mt) capacity coking coal terminal at Beira Port in Mozambique. This terminal will handle third-party cargo.

“The investment will be done over a period of 30 months. When done, the cargo handling capacity will be around 150 million tonne per annum,” said Agarwal.

The Mozambique government has developed a rail network of around 550 km, which also connects the Beira Port. “Our project is a greenfield terminal within a brownfield port. We will develop the terminal, main system, conveyor system, tippler, loading system, etc,” Agarwal said.

On financials, Agarwal said the company’s Ebitda to debt ratio is “healthy” as the ongoing fiscal is likely to end with Ebitda of Rs 900 crore and a debt of around Rs 2,600 crore. Essar Ports is looking at closing this fiscal with a net profit Rs 320 crore.

A substantial portion of Essar Ports’ business comes from its group companies. With Essar Steel undergoing insolvency proceeding from banks due to high debt of around Rs 45,000 crore, the port business may witness some headwinds. However, Agarwal dismissed the same and said, “Good days are ahead. Whosoever be the owner, business will only improve and we will continue to be competitive with our business and pricing.”

DROPPING ANCHOR

  • Essar Ports plans to have a mix of dry bulk, liquefied natural gas (LNG) and liquid cargo terminal at Salaya
     
  • The company is also looking at LNG terminals at locations including Hazira
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