JSW Infrastructure, the privately held ports arm of Sajjan Jindal’s JSW group, plans to invest Rs8,800 crore over the next three years to expand cargo handling capacity from the current 75 million tonnes per annum (mtpa) to 200mtpa by 2020.
The expansion plan is in line with the company’s ambition to shift from handling only sister concern JSW Steel’s cargo to accepting third-party cargo as well.
Half of this investment would be funded through loans and the remaining through internal accruals, B.V.J.K. Sharma, joint managing director and chief executive of JSW Infrastructure said in an interview.
The company’s largest port by capacity at Jaigarh in Maharashtra’s Ratnagiri district will take the bulk of this investment as its capacity will be increased from 40mtpa at present to 80mtpa over the next three years. By the end of March 2018, the port had handled 14mtpa of cargo this year. “JSW Steel’s Dolvi plant expansion was deferred by two years but at the port, we had already invested to be ready to handle the additional cargo from the plant. Once Dolvi’s new capacity comes on stream in March 2020, we’ll see higher utilization here,” Sharma said, explaining the reason for the port’s low capacity utilization at 35%.
“We’ve already spent Rs2,700 crore on building road connectivity, coastal berths, rail connections for the Jaigarh port. The planned capex for the port will be Rs4,600 crore by 2020,” he added.
Capacity at the Dharamtar port will be increased from 15mtpa to 40mtpa, at Goa from 10mtpa to 15mtpa; the Paradip iron ore berth will be enhanced to handle 18mtpa and the coal berth will hit 32mtpa, while the port facilities in Tamil Nadu will increase to 15mtpa.
Sharma also said the company’s long-term plan is to increase the share of business in third-party cargo. Today, the cargo that JSW Infra handles is almost exclusively for the group’s businesses. “By FY21, we’re looking at a 60:40 mix of group to third party cargo,” he said. “We’re tying up with container players and want to build facilities in LPG, LNG, chemicals and bulk cargo.”
On Tuesday, JSW Infra and H-Energy Gateway Pvt. Ltd (the energy arm of the Hiranandani group) launched the country’s first floating storage re-gasification unit-based LNG terminal at Jaigarh. The terminal will offer LNG storage, re-gasification, re-loading, fuel bunkering and truck loading facilities. Once it becomes operational by the end of the year, the re-gasified LNG will be supplied to customers through a 60-km tie-in pipeline which shall be connected to national gas grids at Dabhol.
The terminal, at 4mtpa capacity, will be owned and operated by H-Energy, while JSW Infra is the sub-concessionaire which will provide infrastructure and cargo handling services. “If demand for LNG services from Jaigarh picks up, we can invest in shore-based storage units which will increase capacity to 10mtpa,” Sharma added.
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