JSW Infrastructure Set to Boost Port Capacity Utilization and Cargo Handling

JSW Infrastructure, the ports business under the leadership of Sajjan Jindal's JSW Group, is gearing up to substantially increase capacity utilization across all its ports, targeting a range of 80-85% in the near future. This expansion is predicated on the expected upswing in cargo movement throughout the country. The company's strategic vision also includes a significant boost in its total cargo handling capacity, aiming to nearly double it to 300 million tonnes per annum, as confirmed by a senior executive.

Currently, the utilization of existing port capacity stands at around 64%, influenced by a combination of terminal and greenfield ports. However, JSW Infrastructure believes this can be elevated to 80-85% without requiring additional investments due to the strategic locations of their assets. As cargo volumes continue to surge, utilization is anticipated to naturally increase. Moreover, the company is actively pursuing opportunities to acquire assets as part of the government's privatization initiatives, further bolstering their capacity.

Arun Maheshwari, Joint MD & CEO of JSW Infrastructure, in an interview with FE, mentioned, "The present capacity utilisation across our ports is at about 64%, due to the mix of terminal and greenfield ports. We can probably take this up to 80-85% with the existing investment as all these assets are strategically located. With cargo volumes increasing, utilisation would rise, and on top of that, we are looking to acquire under the government’s privatisation move."

As of the end of FY23, JSW Infrastructure, operational since 2004, possesses a total cargo handling capacity of 158.4 million tonnes across nine ports and terminals on the eastern and western coasts. However, the current capacity utilization is at 57%.

JSW Infrastructure has already submitted bids amounting to Rs 2,000 crore for the acquisition of three ports under the government's privatization initiative. If successful, this could lead to an additional 10-12% increase in capacity.

While the specific port and terminal names for which bids were submitted have not been disclosed by Maheshwari, he expressed optimism about securing some of these opportunities. The company is also charting a substantial expansion plan, aiming to nearly double its total cargo handling capacity to 300 million tonnes over the next 5-7 years.

Industry sources had previously estimated an investment requirement of about Rs 13,000 crore to achieve this capacity doubling. Maheshwari confirmed their readiness to make such investments, but did not specify the exact amount required.

In addition to these developments, JSW Infrastructure has ventured into liquid storage by entering into an agreement to acquire a liquid storage facility with a capacity of 465,000 cubic meters at the Fujairah port in the UAE, with a transaction value of $187 million. The company is open to exploring similar opportunities in the future.

JSW Infrastructure recently reported a robust 88.9% increase in consolidated net profit, amounting to ₹254 crore for the "subdued" quarter ending in September, largely attributed to the impact of monsoons. However, the company anticipates a much improved second half of the fiscal year.