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Gateway Distriparks plans expansion

Our Bureau

MUMBAI, Aug. 2

GATEWAY Distriparks Ltd (GDL), the Indo-Singapore joint venture currently operating a container freight station (CFS) near JNPT-NSICT, plans to expand its activity to encompass value-added logistics.

The company features 70 per cent equity holding by the Singapore-based Thackeral Group, Windmill Corporation and Parameshwara Holdings. The balance 30 per cent is vested with the Indian partner, Newsprint Trading and Sales Corporation (NTSC).

GDL, which began operations in February 1999 with a Phase 1 investment of Rs. 59 crores and 18,600 sq. m of warehousing space, currently does a monthly business of 4,000-4,500 TEUs (exports and imports) out of an estimated 30,000 TEUs seeking CFS facilit y in the Nhava Sheva port region.

Other CFS facilities in the region include those of Maersk-Sealand, Central Warehousing Corporation, Punjab State Warehousing Corporation and Balmer Lawrie and Co Ltd.

GDL's first phase customers include the shipping lines APL/NOL, CMA and P&O-Nedlloyd and leading freight forwarders such as Expeditus, Fritz and American Consolidating Services (ACS). `` Market reception was good, so we decided to go ahead with plans for Phase 2,'' Brig-Gen (Retd) Kirpa Ram Vij, Director and Chief Executive, GDL, said.

Accordingly, by November 2000, when fresh warehousing space of 10,000 sq. m is added through its Rs. 30-crore Phase 2 growth, monthly traffic at the CFS is projected to rise to 7,000-8,000 TEUs. For life beyond that, GDL would like to be more than a pure warehousing company and be instead a provider of value-added logistics.

For a start, GDL is close to finalising a new joint venture with a Singapore-based company for an India-specific portal addressing the gamut of needs associated with shipments to and from the country. The portal, while addressing the region at large, is hoped to attract business for GDL's own logistics channels as well.

The company's planned Phase 3 development, at a cost of Rs. 25-30 crores, is, therefore, unlike traditional CFS operations and more into third party logistics featuring services such as packing, consolidating and palletisation. To be executed in 15 month s from start of work, this phase is expected to gain impetus from other proposed projects in the Dronagiri region such as the special economic zone (SEZ), Capt. Kapil Anand, Chief Operating Officer, GDL, said.

NTSC's equity presence is also being leveraged, with one plan under consideration being the installation of ``right sizing equipment'' at GDL for adding value to bulk newsprint import. NTSC is one of the leading importers of newsprint into India.

Also under study for GDL's Phase 3 are chemical tank cleaning and reefer (refrigerated container) repair facilities.Since the Net venture will prompt GDL to have a presence in the interiors of the country, the company has plans to set up inland container depots (ICDs). Officials said, GDL would prefer to buy into a suitable upcoming project.

Additional CFS projects at port sites elsewhere in the country are also being looked into.

By Phase 3-end, GDL would have invested close to Rs. 120 crores. While medium term financing includes private placement of equity with institutions, eventually the company is slated to go public. ESOPs have been cleared by GDL's board, Brig Gen. Vij said .

The initial round of private placement will amount to 10-15 per cent of GDL's equity. Final dilution of promoters' equity in the company will be roughly 25 per cent of the post-IPO capital base, Capt. Anand said.