Krishna B Kotak

Dear Friends and Colleagues, Here's wishing you and your family a happy, peaceful and prosperous 2019. Surely because of how 2018 went, we all do need the very best of wishes.

Looking back, 2018 has been an incredible year. The rise and the fall of crude oil prices, the tariff war between the US and China, the Brexit conundrum, the reimposition of sanctions on Iran, the absolute confirmation of the 2020 low sulphur emission guidelines for global shipping – to list a few of the global events. India too saw some major developments, such as the implementation of the GST and the resolutions on the non-performing assets, especially in the steel sector with Arcelor Mittal likely to get ESSAR Steel, Tata Steel getting Bhushan Steel, Jindal Steel getting Monnet Ispat, and Vedanta Group getting Electrosteel Steels Ltd (ESL).

The collapse of IL&FS and the subsequent financial issues added to the already strained circumstances of Indian banks. To top all this, in December 2018, there were riots in Paris and talks and rumours about impeaching the US president. Truly, 2018 must have been great for the media with such eye-grabbing headlines almost every day. However, since we are in the maritime, logistics and infrastructure space, such upheavals affect our principals and clients. Trade prefers stability and as the J M BAXI GROUP, we endeavour to provide stability as much as possible within our sphere. We have built our relationships on trust and confidence. We will continue down that path with a strong renewal of our commitment as our New Year resolution for 2019.

Amidst all this turmoil, India has remained relatively stable. Cargo volumes, across all classes of cargo, have grown. Almost all the ports across the west and east coasts of India have seen an upward trend. Some have fared better than others, with Kandla, Paradip and Vizag leading the growth charts. Our terminals at these ports – KICT, PICT and VCT – are correspondingly showing robust growth.

KICT has now begun to attract mainline services, as they have started to include Kandla in their rotations. This is happening mainly because KICT is the most cost-effective terminal in the region for the export–import traders. With the new services starting at Kandla, we will see a twofold jump in KICT volumes.

Regarding PICT at Paradip, friends, let us pause a minute. Give our team there a small pat on the back. PICT was commissioned in record time, became operational in record time and is now handling multiple commodities, which as we all know is probably the hardest type of terminal to run. The most gratifying aspect of PICT is that we can truly respond to the needs and demands of our customers. Steel, fertiliser, aluminium and reefer traffic amongst others are looking at PICT as part of their logistics and value chain. Well done, PICT! It won’t be too long before you should be a 10 million tonne facility.

VCT at Vizag continues to do what it does best. It is the most efficient, productive and cost-effective container terminal on the east coast of India. In 2019, we will start to expand VCT into its second phase and by 2020, it will be a million+ TEU terminal.

Also, 2019 will see Portall, the port community system, implemented at every port in India. It is indeed a matter of pride to the maritime citizens of India that the government of India has rolled out a digital port community system that is perhaps the most advanced in the maritime world. This will have a deep impact on the level of services that will be available and given to shipowners calling at Indian ports.

One of the silent but large developments has been the award of gas distribution network bids for 45 cities and areas across India. The winning bidders will set up the necessary infrastructure including pipelines for distributing gas to users. This development alone will result in major growth of gas consumption. As it has been stressed in the past on these pages, the transportation and handling of gas will certainly be an opportunity that we will continue to track.

The year 2018 saw several government initiatives which were aimed at enhancing the transportation of domestic cargo through the coastal route. 2019 will continue to surge in coastal transportation of containers. Furthermore, bulk and break-bulk products are also being switched to coastal transportation routes instead of rail and road. Undoubtedly this is an area of opportunity which our group companies will be actively pursuing.

Moreover, 2019 will also be the year when we as agents must ensure our capability and capacity are enhanced to address the needs of our principals. The imminent challenge is that ships will need to use low emission sulphur fuel or gas or be fitted with scrubbers. We believe that this will be one more opportunity for us to respond proactively to the needs of our principals.

Lastly, 2019 will see general elections in India around May or June. In the next issue of Tidings, specific dates will indeed be known.

Before I conclude, it is my pleasure to share with you the opening of Thirsty City 127, the best retro resto bar in Mumbai. Definitely worth a visit.

Till next time

Krishna B. Kotak
Chairman - J M BAXI GROUP