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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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Sunday, 01 November 09
THE COAL MOVEMENT TO INDIA FROM SOUTH AFRICA AND INDONESIA WOULD BE CONTINUE INCREASE - VISTAAR SINGAPORE
COALspot.com (Singapore): The BDI continued to be firm with an increase of 60 points and closed at 3,103 points.
The cape index also was firm an ...
Sunday, 01 November 09
INDONESIA ADARO Q3 NET PROFIT JUMPS ON COAL DEMAND
* Q3 net profit up 131.6 percent to 1.27 trillion rupiah
* Q3 revenue up 56.8 percent to 7.12 trillion rupiah
Reuters reported that, Indonesia' ...
Sunday, 01 November 09
PT INDIKA MAY BUY STAKES IN BHPB INDONESIA OPERATIONS
Dow Jones reported that Indonesian coal producer PT Indika Energy may buy stakes in BHP Billiton Limited's Indonesian coal operations and in local ...
Sunday, 01 November 09
ADAVALE RESOURCES MAKES COAL ACQUISITIONS IN INDONESIA
Adavale Resources Limited has entered into an agreement to acquire the rights to two thermal coal projects Tapan and Jambi in Sumatra Indonesia, hel ...
Saturday, 31 October 09
PRODUCERS BENEFIT FROM COAL'S TIGHT SUPPLY AND STRONG DEMAND
The Jakarta Post reported that, The outlook for Indonesian coal producers appears promising with strong volume growth coming from both the domestic ...
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- Sojitz Corporation - Japan
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- European Bulk Services B.V. - Netherlands
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- Africa Commodities Group - South Africa
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- The Treasury - Australian Government
- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Kapuas Tunggal Persada - Indonesia
- Energy Link Ltd, New Zealand
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- Bank of Tokyo Mitsubishi UFJ Ltd
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- Rashtriya Ispat Nigam Limited - India
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- Agrawal Coal Company - India
- Eastern Coal Council - USA
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- Minerals Council of Australia
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- IEA Clean Coal Centre - UK
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- Goldman Sachs - Singapore
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- Alfred C Toepfer International GmbH - Germany
- Ceylon Electricity Board - Sri Lanka
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- Chamber of Mines of South Africa
- Australian Coal Association
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- Interocean Group of Companies - India
- Ministry of Finance - Indonesia
- Ind-Barath Power Infra Limited - India
- Oldendorff Carriers - Singapore
- Billiton Holdings Pty Ltd - Australia
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- Globalindo Alam Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
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- Leighton Contractors Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meenaskhi Energy Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Sical Logistics Limited - India
- Posco Energy - South Korea
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Bhoruka Overseas - Indonesia
- Antam Resourcindo - Indonesia
- Anglo American - United Kingdom
- Global Business Power Corporation, Philippines
- Romanian Commodities Exchange
- Miang Besar Coal Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Wilmar Investment Holdings
- Deloitte Consulting - India
- SMC Global Power, Philippines
- OPG Power Generation Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Straits Asia Resources Limited - Singapore
- Bharathi Cement Corporation - India
- Economic Council, Georgia
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- Pipit Mutiara Jaya. PT, Indonesia
- Renaissance Capital - South Africa
- Grasim Industreis Ltd - India
- Georgia Ports Authority, United States
- Sree Jayajothi Cements Limited - India
- Directorate Of Revenue Intelligence - India
- Siam City Cement PLC, Thailand
- Kalimantan Lumbung Energi - Indonesia
- Independent Power Producers Association of India
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Transport, Egypt
- Wood Mackenzie - Singapore
- Parliament of New Zealand
- Merrill Lynch Commodities Europe
- Dalmia Cement Bharat India
- Malabar Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Thai Mozambique Logistica
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Uttam Galva Steels Limited - India
- Coal and Oil Company - UAE
- Bangladesh Power Developement Board
- Vizag Seaport Private Limited - India
- CIMB Investment Bank - Malaysia
- Central Java Power - Indonesia
- TeaM Sual Corporation - Philippines
- Indogreen Group - Indonesia
- GMR Energy Limited - India
- Bulk Trading Sa - Switzerland
- Salva Resources Pvt Ltd - India
- Sakthi Sugars Limited - India
- McConnell Dowell - Australia
- Toyota Tsusho Corporation, Japan
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Kumho Petrochemical, South Korea
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Indian Energy Exchange, India
- PowerSource Philippines DevCo
- Planning Commission, India
- Electricity Authority, New Zealand
- Aditya Birla Group - India
- Madhucon Powers Ltd - India
- Coastal Gujarat Power Limited - India
- White Energy Company Limited
- San Jose City I Power Corp, Philippines
- Eastern Energy - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Xindia Steels Limited - India
- Trasteel International SA, Italy
- ASAPP Information Group - India
- Vedanta Resources Plc - India
- LBH Netherlands Bv - Netherlands
- Maheswari Brothers Coal Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Aboitiz Power Corporation - Philippines
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- ICICI Bank Limited - India
- International Coal Ventures Pvt Ltd - India
- Videocon Industries ltd - India
- Essar Steel Hazira Ltd - India
- Mercuria Energy - Indonesia
- Cement Manufacturers Association - India
- VISA Power Limited - India
- Coalindo Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Jindal Steel & Power Ltd - India
- Mintek Dendrill Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- South Luzon Thermal Energy Corporation
- MS Steel International - UAE
- Australian Commodity Traders Exchange
- Binh Thuan Hamico - Vietnam
- Star Paper Mills Limited - India
- Therma Luzon, Inc, Philippines
- Thiess Contractors Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- The University of Queensland
- Indian Oil Corporation Limited
- Karaikal Port Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- GN Power Mariveles Coal Plant, Philippines
- New Zealand Coal & Carbon
- Bhatia International Limited - India
- Carbofer General Trading SA - India
- Meralco Power Generation, Philippines
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- Metalloyd Limited - United Kingdom
- Kobexindo Tractors - Indoneisa
- Standard Chartered Bank - UAE
- Ministry of Mines - Canada
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- Kartika Selabumi Mining - Indonesia
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