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TRANSFORMATION AGENDA FOR MAJOR PORTS

This report highlights the transformation agenda for major ports, focusing on increasing profits and enhancing productivity. It discusses the growth in volumes, revenues, and operating profits from FY14 to FY15, as well as the ongoing growth trend in FY16. The report also outlines the focus areas and key initiatives taken to achieve profitability and productivity improvement, such as draft enhancement, equipment upgradation, mechanization, coastal shipping, process efficiency, capacity enhancement, and cost reduction. Additionally, it highlights the major initiatives planned for the next 24 months.

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TRANSFORMATION AGENDA FOR MAJOR PORTS

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  1. TRANSFORMATION AGENDA FOR MAJOR PORTS

  2. Profits increasing after decline for 6 years Increase in Operating profit margin in 2014-15 Operating profit ratio (%) Projected Increase 43% 43% 38% 33% 33% 33% 32% 28% 23% FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 18

  3. Increase in Volumes, Revenues and Profits from FY14 - FY15 Cargo volumes increased by 5% Revenues increased by 8.7% Operating profits increase by 29.7% FY 15 FY 14 581 555 Volume (Million MT) h 9,962 9,162 Operating Income (Rs. Crs) h 3,268 2,518 Operating profit (Rs. Crs) h

  4. Strong performance in FY 15 : Operating profits increased in 8 out of twelve ports Significant jump in Margins in FY15 Margin increase in 8 out of 12 ports FY 14 FY 15 FY 14 FY 15 Operating Margin Mormugao -14% 14% h 3,268 Operating Profit (Rs. Crs) 2,518 -6% Cochin 5% 14% Mumbai 20% h 33% Operating Margin (%) 28% 1% Chennai 19% 18% Kolkata 22% 40% 40% Paradip h 1,483 Net Profit (Rs. Crs) 1,026 25% 30% Kandla 39% 51% Tuticorin h 13% Total Margin (%) 9% 35% 36% New Mangalore 55% 54% J.N.P.T. 70% 68% Ennore Source: IPA Book 2014 34% 29% Visakhapatnam

  5. Growth trend continues in FY16 Growth in cargo volumes in 10 out of 12 major ports (Apr – Aug 2016) Source: Inputs provided by ports

  6. Project launched: Focus on Profitability & Productivity improvement Focus areas for the program All twelve major ports covered in the program Increase Volume & Productivity Kandla Kolkata Paradip Mumbai JNPT Vizag Reduce Costs Mormugao New Mangalore Ennore Chennai Develop Capability Cochin VOC

  7. 100 initiatives identified across six focus areas 1 2 3 Draft Enhancement Equipment upgradation Mechanization Enabling ports to handle bigger vessels Mechanized handling for higher efficiency Drive higher berth & evacuation productivity 4 5 6 Coastal Shipping Process Efficiency Capacity Enhancement Cost reduction Modal shift from rail and road transport Increase productivity / reduce costs New berths development projects

  8. Large vessel handling initiatives Rs. 630 Cr spent on increasing depth in FY 15 Vizag deep draft berth with 18 m draft started Transloading operations started in Kandla and Kolkatta Equipment and Technology upgrade initiatives Modern best in class container Cranes in JNPT Modern best in class cranes ordered in Paradip, Vizag and Kandla Mechanization 2 mechanized coal berths started in Vizag (VGCB & Adani) Mechanized coal berth ready to commence in Ennore Efficiency improvement initiatives EDEN channel started in Kolkata – Rs. 200 cr per annum to be saved Berthing norms rolled out in Paradip and Kandla– 15% increase in productivity Key initiatives taken in last 16 months

  9. Major initiatives planned in next 24 months • Large vessel handling initiatives • 4 more ports to handle Cape size vessels in next 18 months • Tender to be awarded in Mormugao and Ennore in next 6 months • Draft to be increased in Tuna Tekra (Kandla) to 18 m • Equipment and Technology upgrade initiatives • 20 new HMCs to be commissioned and 16 new RTGCs to be commisioned • RFID & OCR technology across ports to automate and accelerate evacuation • Night navigation to be improved in Kandla,Haldia and 3D VTMS to be introduced in ports • Mechanization of bulk handling operations • Mechanization of 5 coal handling berths in Paradip • Mechanization of fertilizer handling in NMPT, Kandla, Cochin, Chennai • Mechanization of food handling berth in Cochin

  10. Eden channel opened by in Haldia – Rs. 200 Cr dredging cost saving Eden channel is an alternate self maintained channel Eden channel to bypass Auckland bar resulting in Rs. 200 crores cost savings • Existing route requires dredging through Auckland and Jellingham bars • Eden Channel is a self maintained channel that will eliminate the need to dredge Auckland bar • Potential to save Rs. 200 Cr in dredging costs per year Haldia HALDIA VIA Eden Channel Eden Channel Existing route

  11. Best in class productivity norms rolled out – Immediate impact seen in Paradip pilot New productivity norms in Paradip increase gross productivity by 12% Best in class productivity norms rolled out in Paradip Norms for individual vessels to demonstrate higher productivity Norms for Non working time and vessel turn around time defined Penalties to be imposed on vessels unable to match the set norms h

  12. Substantial performance change target FY 15 FY 18 Operating Profits 33% 38 – 40% Average TRT 4 days < 2 days # of ports with cape handling capability 1 port 5 ports % of mech. coal handling ~60% > 80%

  13. Thank You

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