Insert Cover Image using Slide Master View Do not distort. Container Logistics (CFS & ICD) Market India

Insert Cover Image using Slide Master View Do not distort Container Logistics (CFS & ICD) Market India February 2015

Executive Summary Market Container cargo traffic is expected to grow substantially at a CAGR of a% over the next five years owing to revival in international trade scenario CFS contributes to the maximum percentage of revenue in the container logistics market Container logistics market comprises of Container Haulage, CFS and ICD and Multimodal Transport Operator Provides various services : Cargo consolidation, distribution as well as custom clearance activities Drivers & Challenges Government Initiatives Drivers Growth in International Trade Growth in Containerized Cargo Improvement in Custom Clearance Activities Higher Margins in Comparison with Other Logistics Activities Construction of Dedicated Freight Corridor FDI Regime Sectors Pertaining to the Logistics Industry Maritime Agenda Vision 2020 Capacity Expansion and Investment Opportunities along East Coast Ports Shipbuilding Subsidy and Investments Challenges Poor Infrastructure Rise in Freight Costs High Costs Entailed for the Development of a Facility Archaic Procedures for the Movement of Containerized Cargo Private Investment in Logistics Parks and FTWZs Container Terminal Privatization Investment Scenario at Major Ports Projects in Progress at JN Port Major Players Competition Player 1 Player 2 Player 3 Player 4 Player 5 Player 6 2

Macroeconomic Indicators Introduction Market Overview Development of the Port Sector Prerequisite and Regulations Government Initiative Drivers & Challenges Key Issues Trends Competitive Landscape Direct Investment Scenario Strategic Recommendation Appendix 3

Macroeconomic Indicators (1/3) GDP at Factor Cost: Quarterly SAMPLE INR tn d1 c1 b1 a1 c2 b2 a2 c3 b3 a3 c4 b4 a4 Q1 Q2 2011-12 2012-13 2013-14 Q3 2014-15 Q4 Inflation Rate: Monthly % p q r s t Jul 2013 - Aug 2013 Aug 2013 - Sep 2013 Sep 2013 - Oct 2013 Oct 2013 - Nov 2013 Nov 2013 - Dec 2013 4

Logistics market in India has witnessed an exponential growth rate over the past decade Logistics Market Overview India Logistic Market Size and Growth INR tn +15.2% x5 x4 x3 x2 x1 x6 2013 2014e 2015e 2016e 2017e Logistics Performance Indicator 2018e LPI score World Rank(proportion to highest ranking nations) m n o p w x y z 2007 2010 2012 2014 6

Rising containerization levels for handling break-bulk commodities have increased India s share in global markets Container Traffic Scenario in India Containerization Levels India vs. Global % growth b c d a India (2012-13) USA China Container Logistics Segments Europe Container Logistics Container Haulage CFS & ICD Multimodal Transport Operator (MTO) An Inland Container Depot (ICD) & Container Freight Station (CFS) may be defined as a common user facility with public authority status equipped with fixed installations and offering services for handling and temporary storage of import/export laden and empty containers carried under customs control Note: ICD Inland container depot, CFS Container freight station, LCL Less than container load, FCL Full container load 7

India s container trade is estimated to cross 16 mn TEUs by 2016, with an expected shift in volume to the newer ports Container Logistics Overview (1/2) CFS and ICD market is an integral component of the logistics sector infrastructure Growth in containerized cargo traffic has facilitated the development of container freight stations (CFS) and inland container depots (ICDs) CFS is largely unique to India and plays an important role in decongesting container traffic at ports, enhancing ports operating efficiency ICDs, also known as dry ports, cater to hinterland cargo traffic from various clusters owing to increased industrial activity The slowdown in India s trade volume mostly affected the CFS & ICD market in the overall logistics sector mainly due to: The large debt-funded infrastructure investment made in the sector Rising competition However, as predicted by recent economic and commerce scenario, the industry is expected to grow in the next five years displaying a high single-digit growth rate on account of revival in international trade scenario post 2014-15 CFS and ICD Market Size & Growth (Volume-wise) mn TEU Container trade has been severely affected in 2013-14 with a growth of only about b% X2% X1% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014e 2015e 2016e 2017e Note: Market size corresponds to container cargo traffic at 15 major ports 2018e 9

Export import activities are the major revenue contributors to the container logistics market Container Logistics Overview (2/2) The CFS and ICD market was valued at INR c bn in 2012-13 CFS and ICD generate about their maximum revenue from import operations followed by ground handling and transportation The industry is however expected to grow in the next five years with the revival of trade scenario post 2013-14 CFS and ICD Revenue based Segmentation (2012-13) Sources of Revenue CFS and ICD Sources of Revenue Operations ICD CFS Handling Rent Import Export B1% C4% C1% C3% B2% C2% Note: 100% = INR c bn 10

Inland Container Clusters Indian Cities SAMPLE Major Container Hubs in India Hinterland Legend % contribution to Exim Cities a Text b Text c Text d Text Note: The list is not exhaustive 11

Tapping opportunities in the Indian CFS and ICD market Exim Container Supply Chain in India Growth Opportunity % Profitability Market Size a5 b5 a1 b1 a2 b2 a4 b4 a3 b3 Primary Transport CFS and ICD Secondary Transport Ports Ocean Transport 12

Container Logistics Infrastructure Current Scenario Opportunity for Investors in Container Logistics across the Exim Supply Chain Rail/road movement for containers Customers text text text Shipping Lines Estimated Investment Future Scenario Scope of business for investors Type of Infrastructure ICD/FTWZ Air Cargo Centres Agro Warehouses Estimated nos./ demand in next 5-10 years INR bn ~ INR z bn investment is needed for container logistics infrastructure by 2020 Integrated Transport Centres ICD/FTWZ Air Cargo Centres Agro Warehouses Integrated Transport Centres 13

India is witnessing a transition from bulk cargo to containerization of traditionally non containerized cargo Current Container Scenario in India Containerization Penetration in India Vessel Traffic, Major Ports (2012-13) Containerization Levels Others Container Dry Bulk B5% B4% B1% Liquid Bulk Break Bulk Others B3% B2% 2009 2010 2011 2012 2013 14

Existence of IRS in container shipping industry enforces competition in upstream and downstream industries Growing Demand for Container Transport Reasons contributing to growing CFS and ICD Share of Container Traffic in Total Trade (2013-14) The Container Shipping Market Government Initiatives Schemes to develop new airports in Tier I and Tier II cities will be launched for implementation through the Airport Authority of India or the PPP mode Note: IRS Increasing Returns to Scale Container P.O.L Iron Ore Coal Others B5% B4% B3% B2% Note: Percentage share in tonnage for major ports only B1% 16

Rapid growth of sea freight volumes are a major boost to the development of CFS and ICD facilities Development of Sea Freight Sea Freight Market Size and Growth Major Ports Minor Ports MMT X% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 SAMPLE Note: MMT: million metric ton 17

Investment in Logistics Infrastructure (1/3) FDI Regime Sectors Pertaining to the Logistics Industry FDI Equity Inflows over the Years FDI in Logistics Sector INR mn INR mn 2008-09 2009-10 2010-11 2011-12 2012-13 2009-10 2010-11 2011-12 2012-13 Railway Related Components Air Transport FDI in Transport and Infrastructure, INR mn Air Freight Shipbuilding Sea Transport Construction of Roads and Highways Jan - Sep, 2013 100% FDI is allowed In maritime infrastructure such as ports, terminals, jetties, harbors and merchant shipbuilding Support infrastructure like warehousing, CFS and ICD, roads, inland water transport (IWT) and other logistics components 19

Rail and road connectivity projects to ports will provide a rapid boost to container freight handling Shipbuilding Subsidy and Investments SAMPLE Ports Phase I (2010-12) Phase II (2012-17e) Phase III (2017-20e) Total Investment (INR bn) Chennai Kolkata V.O. Chidambaranar Ennore Cochin Vishakapatnam JNPT Paradip Mumbai Kandla New Mangalore Mormugao Total (INR bn) 20

Planned Investment on Projects JN Port (2010-2020) Projects till 2020 Deepening of Channel / berths Construction/ Reconstruction of Berths / Jetties Procurement of Equipment Rail / Road Connectivity Works Other Works Total No. of Project Ongoing Projects Estimated Cost. (INR bn) No. of Project Phase I (2010-2012) Estimated Cost. (INR bn) No. of Project Phase I (2012-2017) Estimated Cost. (INR bn) No. of Project Phase I (2017-2020) Estimated Cost. (INR bn) No. of Project Total Projects (Ongoing + New) Estimated Cost. (INR bn) Note : Estimated Cost is for the projects proposed to be taken up /under execution during that period 21

Investment Scenario at Major Ports (1/4) Ports Recent and Emerging Opportunities Estimated Cost (INR mn) Capacity (MTPA) Investments Undertaken Estimated Cost (INR mn) Capacity (MTPA) JNPT Mumbai Port Mormugao Port Cochin Port Note : Estimated Cost is for the projects proposed to be taken up /under execution during that period 22

Growth in international trade is the most vital driving factor for the container logistics market Growth in International Trade (1/2) Impact SAMPLE India s Total Export India s Total Import INR tn X1% Government of India plans to double India s exports of goods and services by 2014-15 INR tn X2% Imports into India are also expected to grow further, particularly of oil and capital good 2009-10 2010-11 2011-12 2012-13 2013-14 2009-10 2010-11 2011-12 2012-13 2013-14 24

The rise in containerized cargo traffic has led to the growth in CFSs and ICDs Growth in Containerized Cargo (1/2) Impact SAMPLE Container Traffic Projection for All Indian Ports mn tons a1 a2 X% a3 a4 2016-17e 2021-22e 2026-27e 2031-32e 25

Cargo handling capacity should be 30% more than projected traffic to minimize pre berthing detention of ships Growth in Containerized Cargo (2/2) SAMPLE Cargo Capacity Creation Projection for All Indian Ports mn tons POL Iron Ore Coal Containers Other Cargo a4 a3 a1 a2 2016-17e 2021-22e 2026-27e 2031-32e 26

Large set up costs and cumbersome procedures for transporting containerized cargo are the major barriers High Costs Entailed for the Development of a Facility Impact SAMPLE Commodity-wise Capital Cost Incurred for Capacity Addition INR mn per ton a1 a2 a3 a4 a5 a6 POL Iron Ore Fertilizers Coal Containers Other General Cargo 27

Porter s Five Forces Analysis SAMPLE Impact Low Threat of New Entrants Impact Medium Impact Medium to High Impact Medium to High Bargaining Power of Suppliers Competitive Rivalry Bargaining Power of Buyers Impact Low Threat of Substitutes 29

Competitive Benchmarking (2/5) SAMPLE Key Ratios of Top 3 Companies Operational Basis (FY 2014) (1/3) % Gross Margin Operating Margin Net Margin a1 b1 c1 a2 b2 c2 a3 b3 c3 Player 1 Player 2 Player 3 30

Public: Domestic Company Player 1 (1/5) SAMPLE Company Information Offices and Centres India Corporate Address Tel No. Fax No. Website Year of Incorporation Ticker Symbol Stock Exchange Products and Services Category Products/Services Key People Name Head Office Designation Sectors (EPC) 31

Public: Domestic Company Player 1 (2/5) Financial Snapshot INR mn Financial Summary The company earned a net profit of INR - mn in FY 2014, as compared to net profit of INR - mn in FY 2013 The company reported total income of INR - mn in FY 2014, registering an increase of -% over FY 2013 The company earned an operating margin of -% in FY 2014, a decrease of m percentage points over FY 2013 The company reported debt to equity ratio of - in FY 2014, registering an increase of -% over FY 2013 Key Financial Performance Indicators Indicators Value (11/27/2014) Market Capitalization (INR mn) Total Enterprise Value (INR mn) EPS (INR) p1 r1 2011 PE Ratio (Absolute) Total Income p2 2012 Net Profit/Loss 2013 Note : This company has had a fiscal year change on Dec-31, 2011 r2 p3 r3 p4 r4 2014 INR mn SAMPLE Key Ratios Particulars Profitability Ratios Operating Margin Net Margin Profit Before Tax Margin Return on Equity Return on Capital Employed Return on Working Capital Return on Assets Return on Fixed Assets Cost Ratios Operating costs (% of Sales) Administration costs (% of Sales) Interest costs (% of Sales) Liquidity Ratios Current Ratio Cash Ratio Leverage Ratios Debt to Equity Ratio Debt to Capital Ratio Interest Coverage Ratio Efficiency Ratios Fixed Asset Turnover Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed Turnover y-o-y change (2014-13) 2014 2013 2012 2011 Improved Decline 32

Public: Domestic Company Player 1 (3/5) SAMPLE Key Business Segments Key Geographic Segments Container Freight Stations Project & Engineering Solutions Multimodal Transport Operations Others Australia & New Zealand Africa Mediterranean America Far East India Europe % % 2010 2012 2013 2014 2010 2012 2013 2014 Business Highlights (1/2) Description News Overview 33

Public: Domestic Company Player 1 (4/5) Business Highlights (2/2) SAMPLE Description News Extensive Product Portfolio Awards and Recognitions Acquisitions 34

SAMPLE Public: Domestic Company Player 1 SWOT Analysis (5/5) S O W T 35

Private: Foreign Company Player 2 SAMPLE (1/5) Company Information Offices and Centres India Corporate Headquarter Tel No. Fax No. Website Year of Incorporation Products and Services Head Office Category Products/Services Key People Sectors (EPC) Name Designation 36

Private: Foreign Company Player 2 (2/5) Shareholders of the Company SAMPLE Ownership Structure Name No. of Shares held Foreign Holdings Total 100.0% 100% Ownership structure corresponds to Date of AGM: 31/03/2012 37

Private: Foreign Company Player 2 (3/5) Financial Snapshot INR mn p1 r1 2010 Total Income Financial Summary p2 r2 2011 Net Profit/Loss The company earned a net profit of INR - mn in FY 2013, as compared to net profit of INR - mn in FY 2012 The company reported total income of INR - mn in FY 2013, registering an increase of -% over FY 2012 The company earned an operating margin of -% in FY 2013, an increase of k percentage points over FY 2012 The company reported debt to equity ratio of q in FY 2013, an increase of - % over FY 2012 p3 r3 2012 p4 r4 2013 INR mn SAMPLE Key Ratios Particulars Profitability Ratios Operating Margin Net Margin Profit Before Tax Margin Return on Equity Return on Capital Employed Return on Working Capital Return on Assets Return on Fixed Assets Cost Ratios Operating costs (% of Sales) Administration costs (% of Sales) Interest costs (% of Sales) Liquidity Ratios Current Ratio Cash Ratio Leverage Ratios Debt to Equity Ratio Debt to Capital Ratio Interest Coverage Ratio Efficiency Ratios Fixed Asset Turnover Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed Turnover y-o-y change (2013-12) 2013 2012 2011 2010 Improved Decline 38

Private: Foreign Company Player 2 (4/5) Business Highlights SAMPLE Description News Overview Awards and Recognitions Industries Served 39

SAMPLE Private: Foreign Company Player 2 SWOT Analysis (5/5) S O W T 40

Direct Investments Player 5 Total Investments Sector-wise SAMPLE Overall Investments Geography-wise B1% C1% Industrials Financials B2% Asia Pacific Emerging Markets C2% Asia Pacific Developed Markets Industrial Investments Segment-wise Investment Snapshot A1% A2% A3% 100% Capital Goods Commercial and Proffessional Services Transportation 42

Strategic Recommendation (3/3) SAMPLE Improving Efficiency of Container Ports Text Text Text Text Port Throughput (TEU) Efficiency Specific Variables for Ports Resultant Output of Container Traffic Text Text Text Text Text Port Throughput (TEU) Efficiency Specific Variables for Terminals Resultant Output of Container Traffic 44

Thank you for the attention Container Logistics (CFS & ICD) Market India 2015 report is part of Netscribes Automotive and Logistics Series. For any queries or customized research requirements please contact: Phone: +91 33 4064 6214 E-Mail: sales@netscribes.com About Netscribes Netscribes is a knowledge-consulting and solutions firm with clientele across the globe. The company s expertise spans areas of investment & business research, business & corporate intelligence, content-management services, and knowledge-software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes is a one-stop shop designed to fulfil clients profitability and growth objectives. Disclaimer: This report is published for general information only. Although high standards have been used in the preparation, Netscribes is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes and prior permission is required for guidelines on reproduction. 45