CONCOR looks to reduce dependence on railways

anil-k-guptaContainer Corporation of India Ltd (CONCOR), the state-owned rail rake provider, is looking to slowly reduce its dependence on railways as it focuses on becoming and end-to-end logistics provider. Anil K Gupta, CMD of CONCOR, spoke to RailNews on the company’s plans. Excerpts from the interview:

Is it a conscious decision of moving away from railways?
Earlier railways contributed 80% to the overall business. But now it is about 75%. Other divisions like warehouses and road transportation have started contributing more to the business. And with the Goods and Sales Tax and FDI in retail coming in, we expect share of railways to go down to 70% in the next few years. It is a conscious decision of getting into different segments as we want to be an end-to-end logistics provider. We need to expand as it helps in dividing the risk. Despite our focus on other segments, we are still a big player in rail logistics.

How is your joint venture with Transport Corporation of India shaping up?
This company has taken a good shape and is concentrating on providing comprehensive integrated logistics services to our customers. It will remain focused on providing total logistics solutions by integrating rail, road and maritime logistics. We expect the JV to be one of the key drivers for our growth in the coming years.

There were also plans of setting up logistics parks. How far has the plan reached?
We are well on the way. Our biggest logistics park is already under advanced stage of construction at Khatuwas (near Neemrana) in Rajasthan. Double stack rail services have already been started from there. Total project will be completed in another year-and-a-half.

Khodiyar in Gujarat is already operational for most of the business segments planned for it.

The industry slowed down expansion plan last year. Do you expect the similar situation this year, too?
Certainly, there would be caution exercised in view of adverse trends in previous fiscals.
For Concor, it would be ‘cautious optimism’ so far as investment in rolling stock is concerned. But in the area of terminal expansion, we are going ahead on full swing as sooner or later, we do expect to get back on the higher growth trajectories.

What is your capex plan?
Our Board has approved our proposals for spending over Rs 1,000 crore during this fiscal in pursuit of creation/consolidation of our network and facilities.

What are the targets and expectations from the domestic operations?

Our domestic volumes have declined during two previous fiscals, due to reasons already disclosed from time to time. For railways as a whole, the domestic containerised tonnages have gone down from 10.16 million tonne (mt) in 2010-11 to 9.41 mt in 2011-12 and 9.27 mt in 2012-13. This year we definitely expect an improvement, by around 8% for Concor.

What was the growth in export-import segment last year and what is the expectation this year?

In terms of aggregate throughput, the Exim segment did not grow last year with volumes almost stagnating. We expect a further growth of 10% in both volumes and tonnage this fiscal, primarily on the hope that Indian exports will grow as new markets develop. What we are afraid is of another repeat year of import-export imbalances, which will dash our hopes. Preliminary trends indicate strengthening on the export front, which is a good omen.