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Thursday, 05 November 09
MERCATOR LINES AIMS TO BECOME A $5 BILLION COMPANY
 Mercator Lines, India’s second largest private sector shipping line, plans to invest and expand, riding India’s next wave of growth, the theme of the World Economic Forum’s India Economic Summit, to be held in New Delhi on 8-10 November
It all started with an idea floated by a co-passenger in a flight.
Harish K. Mittal, owner of India’s second largest private shipping line, does not remember the passenger’s name, but his suggestion on starting a shipping firm way back in the early 1980s stuck in his mind.
Mittal, then running a chemical factory in Muzaffarnagar in Uttar Pradesh, mentioned this idea to Atul Agarwal, who is married to his wife’s sister. Agarwal was at the time auditing some companies that included a few shipping firms.
In 1988, Agarwal mentioned that Mumbai-based Mercator Lines Ltd was on the block. Mittal, then also into the business of buying ship scrap, did not hesitate. He bought the firm for Rs1.2 crore from the Ramchandani family.
From Rs65 lakh in 1988, the firm’s revenue increased to Rs2,200 crore in the year ended 31 March. Mercator Lines today runs a fleet of 28 vessels, up from three barges in the year Mittal bought the firm.
The shipping line, riding high on the wave of India’s economic liberalization since the 1990s, listed on the Bombay Stock Exchange in 1993 and has never missed paying a a yearly dividend to shareholders, Mittal says.
The 59-year-old entrepreneur now wants to make his firm a $5 billion (around Rs23,550 crore) company, an “ambitious dream,” but not impossible for a shipping line that reported a revenue of just Rs60 crore just five years ago.
From a traditional tanker company, Mercator today has a presence in bulk shipping, tanker shipping, dredging, offshore oil exploration and coal mines.
“We have already acquired four coal mines in Indonesia and one in Mozambique. We are now looking for acquiring one more in Indonesia. This will enable us to offer a complete logistics package including coal, ship and local logistics,” says Mittal, who holds a 1973 postgraduate degree in technology from the Indian Institute of Technology, Roorkee, then known as the University of Roorkee.
A majority of new Indian power projects are eyeing imported coal, mainly from Indonesia, to run their plants.
Mittal attributes his success to his management team.
An analyst agrees. “Mercator Lines management was always aggressive to grab every opportunity that came before them, be it dredging, coal mines, offshore or dry bulk ships,” says Kapil Yadav, an analyst with domestic brokerage Dolat Capital Market Pvt. Ltd. Yadav tracks the firm’s scrip.
“The business model of Mercator Lines is to diversify to several segments to derisk, while locking in its vessels for long-term contracts to mitigate the volatility of freight rates,” he says.
Mercator Lines has acquired four dredgers and plans to add six more to its portfolio. Indian ports continuously require dredging to keep their shipping channels deep. State-run Dredging Corp. of India Ltd is unable to meet the entire requirements of the country’s ports. Some international dredging companies have set up shop in India to tap the market potential.
“We are very serious about dredging,” says Mittal. “Apart from dredging, we are also upbeat about the offshore sector.”
Mercator Lines, as part of a strategy to derisk the cyclical nature of its core shipping business, entered the offshore drilling business with the delivery of a Rs1,000 crore jack-up rig. The rig was immediately deployed on a three-year contract with state-owned Oil and Natural Gas Corp. Ltd through Great Eastern Shipping Co. Ltd.
“We are constantly looking for other areas of offshore business, exclusive offshore support vessels. This could be anything, high specification rigs or other areas,” Mittal says. “Mercator was contracted two oil blocks under the seventh round of the new exploration licensing policy,” Mittal said.
In December 2007, Mercator Lines listed its Singapore-based subsidiary on the Singapore Stock Exchange and raised over Rs500 crore.
Last year, shipping firms were hit by the global economic downturn that led to a steep decline in world trade and caused freight rates to fall. “Though there are some signs of revival, I think the next two years are going to be tough for the shipping sector,” Mittal says. “Our diversification model is going to save us during this crisis.”
“Though Mercator has done everything to de-risk by diversifying, as a shipping company it will be exposed to volatility since it is a cyclical industry,” Dolat’s Yadav says.
Mittal, however, remains optimistic. He says all the business segments of his firm are growing and he would continue to invest in these. “Nothing stops us from aiming at being a $5 billion company.”
Source: Live Mint
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Wednesday, 11 November 09
INDIAN COAL IMPORT FROM SA IN OCTOBER
Reuters reported that India imported 2.4 million tonnes of coal from South Africa's Richards Bay Coal Terminal in October 2009, 35% of the total of ...
Wednesday, 11 November 09
INDONESIA ASKS DOMESTIC COAL FIRMS TO SET ASIDE 30PCT OF OUTPUT
Indonesian government said that it had asked domestic coal producers to set aside 30% of their output next year to meet demand from new coal fired p ...
Wednesday, 11 November 09
MINING ACQUISITIONS BECOMING MORE STRATEGIC - E&Y
Mining Weekly reported that, Although miners around the world are looking to position themselves for growth, companies are being more selective when ...
Tuesday, 10 November 09
THAI COAL MINER BANPU Q3 NET UP, BEATS FORECAST
Reuters reported that, Thailand's top coal miner, Banpu, said on Tuesday its third-quarter net earnings rose a higher-than-expected 22 percent, hel ...
Monday, 09 November 09
NAPOCOR DEFERS 50,000 T COAL TENDER
Top Philippine electricity producer National Power Corp. (Napocor) has indefinitely postponed a tender for supply of 50,000 tons of steam coal sched ...
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- Maharashtra Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- TeaM Sual Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Sindya Power Generating Company Private Ltd
- Bangladesh Power Developement Board
- Ministry of Finance - Indonesia
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- MS Steel International - UAE
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- GAC Shipping (India) Pvt Ltd
- Posco Energy - South Korea
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- White Energy Company Limited
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- Minerals Council of Australia
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
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- Attock Cement Pakistan Limited
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- PowerSource Philippines DevCo
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- Directorate General of MIneral and Coal - Indonesia
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- Manunggal Multi Energi - Indonesia
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- Sree Jayajothi Cements Limited - India
- Bharathi Cement Corporation - India
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- Bulk Trading Sa - Switzerland
- Gujarat Mineral Development Corp Ltd - India
- Chettinad Cement Corporation Ltd - India
- Straits Asia Resources Limited - Singapore
- Sojitz Corporation - Japan
- Kaltim Prima Coal - Indonesia
- Mercuria Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sakthi Sugars Limited - India
- Metalloyd Limited - United Kingdom
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- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- Orica Mining Services - Indonesia
- San Jose City I Power Corp, Philippines
- Tamil Nadu electricity Board
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- Planning Commission, India
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- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
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- Binh Thuan Hamico - Vietnam
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- European Bulk Services B.V. - Netherlands
- Ind-Barath Power Infra Limited - India
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- Salva Resources Pvt Ltd - India
- Independent Power Producers Association of India
- Indogreen Group - Indonesia
- Petron Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Indika Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Eastern Energy - Thailand
- Siam City Cement PLC, Thailand
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Australian Commodity Traders Exchange
- Georgia Ports Authority, United States
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- Jaiprakash Power Ventures ltd
- New Zealand Coal & Carbon
- Carbofer General Trading SA - India
- Rio Tinto Coal - Australia
- Cement Manufacturers Association - India
- Wood Mackenzie - Singapore
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- Ambuja Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- London Commodity Brokers - England
- Agrawal Coal Company - India
- Central Java Power - Indonesia
- Therma Luzon, Inc, Philippines
- Standard Chartered Bank - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Power Finance Corporation Ltd., India
- Bayan Resources Tbk. - Indonesia
- Indian Energy Exchange, India
- Latin American Coal - Colombia
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- Offshore Bulk Terminal Pte Ltd, Singapore
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Mintek Dendrill Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- CNBM International Corporation - China
- Coalindo Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Madhucon Powers Ltd - India
- Deloitte Consulting - India
- VISA Power Limited - India
- PTC India Limited - India
- Makarim & Taira - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Bahari Cakrawala Sebuku - Indonesia
- Maheswari Brothers Coal Limited - India
- Meralco Power Generation, Philippines
- IEA Clean Coal Centre - UK
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- Timah Investasi Mineral - Indoneisa
- IHS Mccloskey Coal Group - USA
- Edison Trading Spa - Italy
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- Energy Development Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Karaikal Port Pvt Ltd - India
- Indian Oil Corporation Limited
- Petrochimia International Co. Ltd.- Taiwan
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- Parliament of New Zealand
- Star Paper Mills Limited - India
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- The State Trading Corporation of India Ltd
- Holcim Trading Pte Ltd - Singapore
- Aditya Birla Group - India
- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Semirara Mining Corp, Philippines
- Thiess Contractors Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Goldman Sachs - Singapore
- Tata Chemicals Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Chamber of Mines of South Africa
- Global Green Power PLC Corporation, Philippines
- The Treasury - Australian Government
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Australian Coal Association
- Kartika Selabumi Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- Pendopo Energi Batubara - Indonesia
- South Luzon Thermal Energy Corporation
- AsiaOL BioFuels Corp., Philippines
- Krishnapatnam Port Company Ltd. - India
- Coastal Gujarat Power Limited - India
- Price Waterhouse Coopers - Russia
- Grasim Industreis Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Thai Mozambique Logistica
- Commonwealth Bank - Australia
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- Central Electricity Authority - India
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
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