Mediterranean Shipping Co. (MSC) has strengthened its competitive prowess in India with a €5.7 billion (US$6.3 billion) buy of Bollore Africa Logistics that includes a stake in one of the growing container terminals in the country’s east coast region.
Jointly with local partner Indian Ports & Logistics Pvt. Ltd., Bollore operates Dakshin Bharat Gateway Terminal (DBGT) in Tuticorin Port, also known as V.O. Chidambaranar Port.
Subject to necessary regulatory approvals, MSC concluded the African logistics business acquisition of French conglomerate Bolloré Group last month.
“The signing of this agreement follows a thorough and positive consultation process with representatives of employees of the Bolloré Group,” the Geneva-based group said. “The acquisition of Bolloré Africa Logistics reaffirms MSC Group’s longstanding commitment to invest in Africa and to strengthen supply chains across the continent, as well as connecting it to the rest of the world.”
DBGT, on a 30-year operating concession — is owned 49% by Bollore, with the remainder held by its Indian partner. The contract – costing US$40 million – had involved converting one of the general cargo berths in Tuticorin Port into a container-handling facility. DBGT began operations in 2014 with a designed capacity of 600,000 TEU a year.
DBGT has made significant inroads into the port traffic with shipping lines switching away from the other terminal, PSA Sical Terminals, eyeing greater productivity rates. PSA Sical Terminals, a joint venture between Singapore’s PSA International and Chennai-based Sical Logistics, has been mired in litigation with the port over scale of cargo-handling service rates.
As a result, DBGT has seen volumes trend up steadily, ending the fiscal year 2021-22 with some 600,000 TEU, versus some 180,000 TEU at PSA Sical.
That terminal ownership change comes as Tuticorin is making stronger efforts to induce more mainline and feeder calls with deep rebates on vessel-related charges, which go up to 85% for ships trading on the larger routes (US/Europe).
For MSC, the Indian east coast entry comes on top of its existing terminal partnership with Adani Group at Mundra Port, named Adani International Container Terminal (AICTPL).
AICTPL is the largest operator in Mundra, which is seeing strong growth in container volumes due in some part to transhipment cargo activity by MSC.
With terminal advantages on both coasts, MSC is likely to seek opportunities for operational synergies in order to provide additional value to its customers in India.
Jenny Daniel
India correspondent
Contact email: j.daniel@container-news.com
