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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, 04 November 09
BINANI HOPES TO BUY INDONESIAN COAL MINE IN 2-3 MONTHS
"We are still negotiating, but hope to conclude the deal in the next two to three months," Binani Cement Managing Director Vinod Juneja to ...
Tuesday, 03 November 09
CHINA TO BE NET COAL IMPORTER IN 2009
China is accelerating its importation of coal to cope with fallen output caused by the consolidation of small coalmines, and is likely to become a n ...
Monday, 02 November 09
RIO TINTO WARNS ON CHEAP MONGOLIAN COAL
The Age reported that, Mining giant Rio Tinto has warned that cheap coal from Mongolia as well as congestion at the Port of Newcastle in NSW could u ...
Monday, 02 November 09
ESSAR SEEKS COAL ASSETS IN SOUTH AFRICA
Paguntaka reported that, Essar Group plans to acquire coal assets in South Africa to help boost its power business in India. A senior executive of E ...
Sunday, 01 November 09
MINES REGULATION AMENDMENT BILL TO BE TABLED IN PARLIAMENT
Thaindia News reported that, A bill seeking to amend the Mines and Minerals Development Regulation Act, 1957, will be introduced in the winter sessi ...
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- The University of Queensland
- Chamber of Mines of South Africa
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Gujarat Mineral Development Corp Ltd - India
- Carbofer General Trading SA - India
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- Vijayanagar Sugar Pvt Ltd - India
- Vedanta Resources Plc - India
- Mercuria Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Tata Chemicals Ltd - India
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ambuja Cements Ltd - India
- Ministry of Finance - Indonesia
- Edison Trading Spa - Italy
- Metalloyd Limited - United Kingdom
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
- Larsen & Toubro Limited - India
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Uttam Galva Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Thai Mozambique Logistica
- Mintek Dendrill Indonesia
- Barasentosa Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Directorate Of Revenue Intelligence - India
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- White Energy Company Limited
- Cement Manufacturers Association - India
- New Zealand Coal & Carbon
- Holcim Trading Pte Ltd - Singapore
- Independent Power Producers Association of India
- Jindal Steel & Power Ltd - India
- Malabar Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Bharathi Cement Corporation - India
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Directorate General of MIneral and Coal - Indonesia
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- Tamil Nadu electricity Board
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Kideco Jaya Agung - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rio Tinto Coal - Australia
- CIMB Investment Bank - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- Bhushan Steel Limited - India
- IEA Clean Coal Centre - UK
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- Madhucon Powers Ltd - India
- Petron Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Straits Asia Resources Limited - Singapore
- Orica Mining Services - Indonesia
- Sical Logistics Limited - India
- Coalindo Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Kobexindo Tractors - Indoneisa
- Altura Mining Limited, Indonesia
- Interocean Group of Companies - India
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Price Waterhouse Coopers - Russia
- Energy Link Ltd, New Zealand
- Xindia Steels Limited - India
- The State Trading Corporation of India Ltd
- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Toyota Tsusho Corporation, Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mjunction Services Limited - India
- Therma Luzon, Inc, Philippines
- Sojitz Corporation - Japan
- Karbindo Abesyapradhi - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- MS Steel International - UAE
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Iligan Light & Power Inc, Philippines
- ASAPP Information Group - India
- Grasim Industreis Ltd - India
- Commonwealth Bank - Australia
- Coal and Oil Company - UAE
- Orica Australia Pty. Ltd.
- Singapore Mercantile Exchange
- Central Electricity Authority - India
- Posco Energy - South Korea
- Makarim & Taira - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Deloitte Consulting - India
- Maheswari Brothers Coal Limited - India
- Trasteel International SA, Italy
- Global Green Power PLC Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- ICICI Bank Limited - India
- International Coal Ventures Pvt Ltd - India
- Africa Commodities Group - South Africa
- Indo Tambangraya Megah - Indonesia
- Bhatia International Limited - India
- Manunggal Multi Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Formosa Plastics Group - Taiwan
- Savvy Resources Ltd - HongKong
- Semirara Mining and Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kumho Petrochemical, South Korea
- Siam City Cement - Thailand
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- Energy Development Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Mercator Lines Limited - India
- Rashtriya Ispat Nigam Limited - India
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- GMR Energy Limited - India
- McConnell Dowell - Australia
- Kalimantan Lumbung Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Renaissance Capital - South Africa
- Sinarmas Energy and Mining - Indonesia
- Videocon Industries ltd - India
- Port Waratah Coal Services - Australia
- Power Finance Corporation Ltd., India
- Miang Besar Coal Terminal - Indonesia
- SMC Global Power, Philippines
- Lanco Infratech Ltd - India
- Australian Commodity Traders Exchange
- Aditya Birla Group - India
- Bulk Trading Sa - Switzerland
- South Luzon Thermal Energy Corporation
- Heidelberg Cement - Germany
- Meenaskhi Energy Private Limited - India
- Meralco Power Generation, Philippines
- Indika Energy - Indonesia
- Bangladesh Power Developement Board
- Planning Commission, India
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- PNOC Exploration Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Indian Energy Exchange, India
- Parry Sugars Refinery, India
- Semirara Mining Corp, Philippines
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Medco Energi Mining Internasional
- PTC India Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Central Java Power - Indonesia
- Aboitiz Power Corporation - Philippines
- Samtan Co., Ltd - South Korea
- VISA Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Ministry of Transport, Egypt
- Jaiprakash Power Ventures ltd
- San Jose City I Power Corp, Philippines
- Eastern Energy - Thailand
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- Parliament of New Zealand
- Coastal Gujarat Power Limited - India
- Sakthi Sugars Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Pendopo Energi Batubara - Indonesia
- Indogreen Group - Indonesia
- Merrill Lynch Commodities Europe
- Standard Chartered Bank - UAE
- The Treasury - Australian Government
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