Eyeing logistics business, Krishnapatnam Port joins hands with automakers like Volvo, Isuzu Motors

By Rajireddy Kesireddy
HYDERABAD: Krishnapatnam Port, the largest private port on India’s east coast, has tied up with automobile manufacturers such as Isuzu Motors and Volvo India besides initiating talks with the world’s largest twowheeler maker Hero MotoCorp as it eyes a large pie of automotive logistics business in the region.

The flagship concern of the CVR group, the seaport located in Nellore district of southern Andhra Pradesh, plans to attract major automakers operating in Bangalore such as Toyota, Scania General Motors, Honda and TVS.

It is also in the process of forging alliances with the Japanese automotive firms in the vicinity of Chennai-Bangalore Industrial Corridor, which is being funded by Japanese multilateral agencies, Krishnapatnam Port Company’s managing director Chinta Sasidhar told ET.

Bangalore-based automakers have not seriously addressed the export market out of India, Sasidhar said. "For OEMs (original equipment manufacturers) in Bangalore, Krishnapatnam Port represents an ideal gateway for export of their vehicles on ro-ro (roll-on roll-off) vessels," Sasidhar added.

In 2013-14, the port company reported revenue of Rs 1,200 crore, using just half of its cargo-handling capacity of 70 million tonne -built at a cost of Rs 4,800 crore.

The company is further looking at increasing the capacity of its container terminal to 6 million tonne from 1.2 million tonne in three years as it anticipates demand from automotive logistics and other businesses.

"We are hoping to report revenue of Rs 1,800 crore during the current fiscal and attain at least 10% of revenue from the auto logistics handled in three years from just 2% now," said Sasidhar. The port is also in talks with leading ro-ro vessel operators such as NYK and MOL to start roro shipment services soon, he added. Sasidhar said the berthing capability for ro-ro vessels at Krishnapatnam Port is fully ready with 200-acre site.

"The excellent road connectivity between Bangalore and Krishnapatnam makes for high-speed transportation and efficient turnaround of car carriers," he said. Volvo India is currently using the port's services for importing construction equipment and is looking at exporting trucks manufactured at its Pith ampur plant in Madhya Pradesh to Indonesia, he said.

Toyota is set to begin trial shipment this month, using the current container terminal, he added.

Automakers in south India, including Hyundai Motor, Ford, Nissan and Ashok Leyland, depend on the port of Chennai and Kamarajar Port for export of finished vehicles using large carcarrier trucks that consume time and are constrained by limited manoeuvrability.

Tamil Nadu Government has already objected to the proposal to include Krishnapatnam Port in the Chennai-Bangalore Industrial Corridor, claiming that some of its key seaports will lose out on cargo handling business, especially from the automobile sector.

Both global and Indian automobile and auto components manufacturers are increasingly looking at adopting innovative practices of supply chain and logistics to reduce costs and improve product delivery schedules. While logistics account for nearly 3% of automobile industry in India, its share is estimated at about 4% for automobile components.