India is important for our business, customers throughout the world: CEO of APM Terminals

      05/10/2019

A P M Terminals, one of the world’s top port operators and a unit of Denmark’s A P Moller-Maersk Group, will look at opportunities on the inland side to grow its business in India and is keen to get the concession for Pipapav port extended beyond 2028, chief executive officer (CEO) Morten Engelstoft, said in an interview. Excerpts.

Q: How will the Government’s move to convert major port trusts into port authorities benefit private firms investing in these ports?

Ans: It does seem like the Government intends to do away with the Tariff Authority for Major Ports (TAMP) and that is definitely something we welcome. It is an important step towards a more market-driven pricing for the (major) ports. The legislation is yet to be passed by Parliament. So, I think we should wait for that to happen first.

Q: APMT-run Gateway Terminals at JNPT has been one of the worst hit by the rate setting guidelines of 2005 which was recently updated by the Government. Do the new norms give you the confidence to withdraw from the court cases?

Ans: It's a course, an ongoing case, and therefore, I think it is somewhat improper for me to comment until the current legal process has run its course.

Q: So, are you still not convinced of the new rate norms to pull out from the court case that was filed against the rate cut of 2012 ordered by TAMP?

Ans: We do see it as a step in the right direction. It does seem like a good way to find a solution and we consider that to be positive.

Q: …. but not to the extent of retracting from the litigation?

Ans: As long as there's no firm outcome, then we would actually wish to see the conclusion before we can comment on it. So, for now, we see it as a good step. We see it as a positive indication and we also know that there's still some developments that needs to happen.

Q: Your two existing facilities are located on India’s western coast. Are you looking at expanding your terminal presence in India, particularly on India’s eastern coast?

Ans: Not at this stage. We are pleased with the two facilities that we have and right now the focus is to stay on with those two facilities. As a company, we are now more focused on investments into other parts of the supply chain on the inland side, in logistics, and facilitating a better customer experience throughout the supply chain. So, at this stage, we are not working on any projects on the eastern coast.

Q: To boost your hinterland presence, are you looking at acquisitions?

Ans: Overall, India is an important country for APM Terminals with good growth potential. It’s a country where we would like to continue to invest and serve our customers better. We actually have quite an extensive set-up on the inland side. We have seven different facilities that we are running here today. Last year, we opened our new cold chain facility in Chennai. We have had other additions to the product catalog to draw customers. We will continue to look at opportunities on the inland side.

Q: Have you given up on exiting from Pipavav port with the concession set to end in 2028?

Ans: In general, we are pleased with the activities at Pipavav. The nature of our businesses is such that the concession eventually will run out. But certainly, it is our expectation and our intention to also have the concession extended when time comes.

Q: So, you are keen to continue beyond 2028?

Ans: We are definitely keen to get the concession extended. We are happy with our activities. It's good business. As I said, India is not only an important part for our business, but for many of our customers throughout the world. So, absolutely, we will be keen to continue our activities and the concession at Pipavav.

Q: PSA International had recently hauled you to India’s anti-trust regulator alleging unfair practices at JNPT.

Ans: We believe that we have a competitive terminal at JNPT which our customers prefer. We have the most productive terminal in the market which handled more than two million TEUs in FY19. That is what we focus on. I'm not going to comment on an ongoing case. All I can say is that we are focusing on serving our customers at our facility and we do that quite well.