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AllCargo Logistics to invest Rs 250 cr to ramp up capacity, buy coastal ships - 2012-03-05

AllCargo Global Logistics, which is in the process of de-merging its global and Indian businesses into two separate entities, is investing Rs 250 crore this year to increase the capacity of its CFSs (container freight stations) and buy two coastal ships, as it looks to consolidate its presence in the domestic coastal shipping market.The company had invested similar amounts in the last two years, primarily to ramp up its CFS and ICD (inland container depot) capacities in JNPT, Chennai and Mundra ports. It has recently increased its capacity at Chennai and Mundra ports to 1,20,000 TEUs and 77,000 TEUs respectively.

“We are investing Rs 120 crore on our second CFS at Nava Sheva that will scale up the capacity from 1,50,000 TEUs to 3,50,000 TEUs.“The work is on in full swing and we hope to complete it by June this year,” Mr Shashi Kiran Shetty, the company's Chairman and Managing Director, told Business Line.

The logistics firm will be sharpening focus on its coastal shipping business, with plans to bring in two vessels for Rs 50 crore from overseas.It will be looking at iron ore, coal and steel cargoes, as the coastal shipping industry expects a sizeable scoop of these cargoes to get diverted from road. “Of course, there are some challenges in terms of port infrastructure, but we still see a healthy growth in this business,” Mr Shetty said.

The remaining about Rs 70 crore of the proposed capex will go to its project and engineering solutions business, involving transportation and leasing of project equipment, which contributed Rs 300 crore to its turnover of Rs 3,400 crore. “We are seriously looking at taking this business to overseas market such as Africa and Sri Lanka in 2013, where new projects are in the pipeline,” he said.

Source : Hindu Business Line