presentation - business development port

8/6/2019 Presentation - Business Development Port

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� Introduction� Characteristics of a Port� SWOT Analysis� Market Analysis� Environment Analysis� Customer Analysis� Competitor Analysis

� Performance aspects of BusinessDevelopment� Financial aspects of Business Development� Port Promotion7/1/2011 2



P ort is a place for ships to load and unload freightand passengers.

Globally 8 0% of trade is done through sea route.

Sea route provides the cheapest mode of transportation.

In India we have 12 major and approx 200 plusminor ports. There is a very high competition andthe emergence of new port players is totallychanging the dynamics of the Indian port sector.

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Location of portType of Harbor GeographicalPosition

GeographicalPositionDraft /Capacity of the PortLand

NauticalCharacteristic

NauticalCharacteristic

Value Added LogisticsHinter Land

Connection

Hinter Land

ConnectionConcession agreementService, Tool or LandlordType of the Port

Type of the Port

Piloting, Mooring, Stevedoring, Warehousingetc.Services Provided

Services Provided

Labour Social Conditions

Social Conditions

MacroFiscal Environment

Fiscal Environment

Payment terms, Competition

Market competitionPrice

Price7/1/2011 4



Threats� International contenders.� Private Ports in Neighborhood.

Threats� International contenders.� Private Ports in Neighborhood.

Strengths� Strategic location.� High growth.� High market share.� Financial means available for

expansion.� Proximity of Power plants.

Strengths� Strategic location.� High growth.� High market share.� Financial means available for

expansion.� Proximity of Power plants.

Opportunities� Gateway port.

� Huge Indian market & landlockedstates.� Port reforms ± more autonomy.� Investment in port infrastructure,

lower cost for port users� Development of LNG terminal.

Opportunities� Gateway port.

� Huge Indian market & landlockedstates.� Port reforms ± more autonomy.� Investment in port infrastructure,

lower cost for port users� Development of LNG terminal.

Weaknesses� High tariffs.

� Away from liner route.� Lack of trained manpower.� Industrial region away from

port.

Weaknesses� High tariffs.

� Away from liner route.� Lack of trained manpower.� Industrial region away from

port.

5



The ultimate objective in this step is toidentify customers and their interests.

±P

ort owner contacts ship owners (ship owners arethe customers).

± P ort owner contacts freight forwarders whocharter ships on behalf of their customers ( freight

forwarders are the customers). ± P ort owner contacts cargo owners. (cargo owners

are the customers).

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BD manager of a port needs to understand thelegal and regulatory environment of a country. ± P ort Laws

Indian P orts Act 190 8Major P ort Trusts Act 1963

± Shipping LawsMerchant Shipping Act 19 5 8

± P ort Labor LawsD ock Workers (Regulation of Employment) Act 194 8D ock Labor B oards

± Environment-related lawsEnvironment P rotection Act 19 86 (CRZ)All other environment related laws (i.e. Wildlife P rotection

Act 1972 etc)7/1/2011 7



MP SEZ s hinterland consists of among the mostindustrialized states in India, with G DP having grownaround 10% consistently over past few years andaccounting for nearly 70% of India s container traffic.

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MP SEZ is indeed attractive to high potential industrieslike auto, chemicals, light and heavy industries andtextiles and apparels

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Long term contracts with the various customers /industries with high growth potential.

Single P oint Mooring Facility 1 has been contracted to IOC under a take orpay agreement. The company is developing a second single point mooringterminal (S P M2), which has a capacity to handle 25 mtpa of liquid cargo.

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Intrastate ± B ased on geographical location, ports in Gujarat can be

divided into two categories i.e. located on Mainland i.e.P ort of D ahej and Hazira and ports located in peninsularregion i.e. Kandla, P ipavav, and Mundra etc.

Source: India Equity Research Report, May 20117/1/2011 11



S. No Port Road Link Rail Link Draft Remarks

1. Bhavnagar Connected toStateHighway (SH)

Connected toBroad Gauge(BG) line.

Lighterageport with 4mdraft.

y Cargo handling iscarried out atanchorage point.

y Multiple handling of Cargo.

2 . Pipavav Connected to

NH.

Connected to

BG line.

12.5 m

3. Navlakhi Connected byroad to NH.

Connected toBG line.

Lighterageport.

Movement restricted tohigh tide and daylighthours only, causes delay.

4. Okha Connected byroad toJamnagar/Porbander and fromthere on toNH.


7.5-8mLighterage.

y Movement restrictedto daylight & hightide, only causesdelay.

y Beam (width) of vessel restriction of 30m. 12



S. No Port Road Link Rail Link Draft Remarks5. Porbandar Connected by

road to Rajkotand fromthere on toNH.


9.8 mDirectberthing for vessels upto50,000DWT.

y Beam (width) of vessel restriction of 30m.

y Pilotage duringdaylight hours only.

y Only medium sizeships can be handled.

6 . Bedi/Jamnagar

Connected toNationalHighway(NH).

NearestRailwayStation 7 kmaway .

Lighterageport.

y Cargo handling iscarried out atanchorage point11kms from port.

y Multiple handling of Cargo.

y Mainly handles POLat SBM for refineries.

y Movement restrictedto high tide, causesdelay.

7 . K andla Connected to

NH.

Connected to

BG line.

10.7-12m Large ships have to

unload part of cargo atanchorage.

13



An All-Weather P ort.

17 .5 m draft, which is deepest in India.

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One of the fastest growing ports in India withcargo volumes growing across all segments.Cargo handing YOY growth of 12 .79% .

Mundra P ort accounted for 78% of allcontainer traffic handled by all the minorports in the country ( 1 .23 million TEUs).

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Well connected (within state & with upcomingdedicated freight corridor).

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Mundra is also India s largest port for carexports - Maruti Suzuki exported a total1 ,25 ,15 7 cars exported in the financial year2009 -10 .Availability of experienced master marinersand powerful tugboats to navigate andmaneuver large vessels in shipping channel.Availability of adequate storage space (openand closed) in backyard for temporary storage.

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Mundra P ort has following storage facilities : ± 26 ,000 sq. m of open storage alongside rail siding. ± Wheat cleaning facility with a capacity of 1 ,200 MT /

day. ± 8,8 0 ,000 sq. m. of well demarcated open storage

space for steel sheets, plate, coils, scrap, clinker, salt,coal and coke etc.

± 21 closed sheds,( 70 ,000 sq.m.) for storage of wheat,rice, sugar, de-oiled cakes ( D OC), fertilizer, fertilizerraw materials (FRM), etc.

± 38 hectares for the container yard rail operation. ± One of the largest liquid tank farm inside any port and

only port on west coast handling coaltar.7/1/2011 1 8



Key parameters on which a BD manager can pitcha port s services are ± Ship turnaround time

± grade of waiting.

These parameters have direct implications on theopportunity costs of a ship. The more theturnaround time and the grade of waiting, thehigher the standing costs (fixed costs that a shipincurs when it is not sailing) and staff expenseswill be that a ship has to bear.

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Frequently used financial performance metricsto evaluate various aspects of ports are: ± Activity

Operating ratio = Operating expenses / OperatingRevenues

± Capital StructureGearing ratio = D ebt / Equity

± Solvency / LiquidityCurrent ratio = Current Assets / Current Liabilities

± P rofitabilityReturn on Equity = Net P rofit / EquityReturn on Assets = Net Income / Total Value of assets

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While analyzing the social costs and benefits, the impactof ports should be considered from three aspects ± D irect Impact: Includes impacts on organizations and activities

that are directly linked to port project.

± Indirect Impact: Includes the impact on industries andinstitutions that have decided to locate their activities near oraround the port because of their dependence on port. Someof the examples could be trade industries and financeinstitutes serving ports.

± Induced Impact: The aggregation of the direct and indirectimpacts on other sectors of economy is referred as inducedimpact. One such example could be the increased real estateactivity.

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A BD manager must also bear in mind the risksinvolved with the investments. P rimarily, therisks can be classified in :

± Cost Risk: Risks associated with cost overruns. Thismay emanate from technical, economical andfinancial changes.

± Revenue Risk: Risks associated with fluctuations inforecasts of volume or price.

± Country Risk: Risks such as political, social, legal

and currency risks.7/1/2011 22



D ifferent types of promotion tools for ports in order tocommunicate to various target groups, inform themand influence their perception towards the port.

Advertising Advertising Direct mailingDirect mailingInternational

shippingexhibitions

Internationalshipping

exhibitions

Organizingport days

Organizingport days

PersonalSelling/Direct

business trips

PersonalSelling/Direct

business trips

RepresentativesRepresentatives DomesticnetworkingDomestic

networking Domestic fairsDomestic fairs

School visitsSchool visits OrganizingconferencesOrganizing

conferencesSpeaker at aconference

Speaker at aconference

Internationalpress day

Internationalpress day

Source: UN manual on port business7/1/2011 23



When a direct mailing is used as a tool, veryimportant to verify following points:- ± Name of person being written to.

± His/ her function.

± Gender.

± References .

± Faultless and carefully drawn up letter. ± Enclosures are enclosed.

± Names of the people available for further information.

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� Objectives of advertising are :- ± Enlarging the general renown of the port.

± Paving the way for sales. ± Improving port¶s image. ± Increasing port¶s recognition. ± Highlighting the port¶s quality elements.

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� Presence of the port at a professional shippingexhibition shows that the port is a recognizedplayer in the market.

� Two types of professional fairs which can be of interest to a seaport as shown in the below:- ± Shipping fairs: Focus on meeting the shipping

industry, such as ship owners, agents and brokers

etc. ± Commodity fairs: Focus on meeting the owners of

the commodities, who will anyway also haveinterest in the best manner to transport their commodities to the final destination.

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� One of the most effective communication toolsin the port marketing� Advantages of organizing the port days:

± People come only to meet the delegation, i.e. a

serious business affair. ± Mere presence of the business people shows that

they have an interest at the first instant. ± Every possibility for the port authority to give a

broader view about their port when compared to theexhibition. ± By organizing a port day in certain region means

that the port wants to do the business with thepeople of that region.

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There are three different types of directselling, and they are listed below ± D irect Selling: Through delegations or

representatives.

± Indirect Selling: Through chambers of commerce,embassies or banks.

± For International market: Understand the Social,Cultural & Economic context.

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Above shown boat is the security boat,which shows the world class securitysystem, On the right are the pictures of various specialized cargo handling docksthat speaks about the service that would beprovided. (Source: LA port promotionbrochure)

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This is because Mundra port is better placed (than itspeers) to capitalize on the strong cargo growth that Indiais likely to witness in the mid-term.

Mundra port is undergoing a huge capacity expansion,which would place it ahead of some of the major ports.Moreover, Mundra port would continue to attractincremental cargo on the west coast due to its strategicadvantages and operational efficiencies.

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