Prem Kishan Gupta, Chairman and Managing Director, Gateway Distriparks, growth opportunities in the coming year 2022, concerns related to Omicron, plans related to cost hikes/reduction, benefits of the upcoming National Logistics Policy and National Logistics Policy as well as budget expectations, among others, during an exclusive interview with Zee Business' Swati Khandelwal. Edited Excerpts:

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Q: How 2022 is looking in terms of growth opportunities?

A: First of all, I would like to inform you and your audience that the merger scheme of Gateway Rail that includes rail transportation and ICD; Gateway Distriparks that has Container Freight Station and Gateway East, our company based in Vizag has been approved by NCLT and we have also received its written orders on Monday. The merger will be completed in some time now, i.e., by the end of this quarter. Then, these three companies will combine and emerge as a single entity, which will enable us to have a pan-India network although we had it but were not able to provide a pan-India solution to a customer as the companies were separate entities and related party transactions were present there, which has come to a close. As far as how the logistic business has been this year and will be at the end of the financial year closing in 2022 is concerned, there is a 25% growth in volumes compared to the last year and in the coming year, we foresee that a lot of business is shifting from road to rail because of certain reasons. So, we are expecting double-digit growth in 2022-23 and this will continue because India's export has increased a lot but container availability is not in tune with the kind of increase in export because there is a 20% shortage in availability of the containers from the normal between import and export, but the gap has gone up to 40% at present. However, the shipping lines are repositioning their containers from nearby Asia but export cargo is more while container availability is low. Soon or later this gap will be filled. This is why it seems that in the coming future export that used to happen from other countries is shifting now and exporters will be benefitted from it and imports will continue. So, I believe that we will get this double-digit growth next year as well.

Q: Are you really seeing any concerns related to Omicron and how cautious are you on it and what is the situation of COVID?

A: We have already seen two waves of which Wave-I came in 2020 and Wave-II in 2021. We came out strongly in both the waves and strengthened our delivery and services due to which there was an increase in both, revenue and volumes. This time as well, we are not ignoring the Omicron but the way we are getting updates that Omicron wave is not so fatal and does not require hospitalisation, even. So, I believe that the normal work will continue in the coming times as well but everyone has to be a bit cautious, i.e., the general public, the consumer, the industry and the service providers among others. If we all will remain cautious then we will overcome this problem as well. A lot of people have been vaccinated and this is a reason that even there is a disease then there will be less need for hospitalisation. So, I feel, the business should go on.

Q: What about the costs? Do you see any further escalation in costs leading to a price hike? 

A: As far as our input cost pressures are concerned then it is mainly about the revenue that we have to provide to the Indian Railways. Interestingly, the railways have not increased their freight prices. Moving forward, DFC is about to come and will be completed gradually and we are not seeing any cost pressure on the rail side. But the cost has increased in the rest of the equipment, power supply and trailers due to the rise in diesel prices. But, we have provisions related to diesel escalation and de-escalation in the big contracts that we have So this year there has been no difference in our cost. Other sections of the western rail corridor will be started next year and we expect that the railways will reduce its cost further. When full speed high weight category containers will start fleeting on the entire corridor then the railways will definitely give its advantage to us, which will be passed on to the customers

Q: We are awaiting developments on National Logistics Policy for some time now and there is also a plan for National Warehousing Policy. How the company will be benefitted from it?

A: National Logistics Policy aims at reducing the logistics cost, which is quite high in India compared to other nations. I feel that this National Logistics Policy will increase the infrastructure further in the coming years. The warehousing support reduce the wasteful movement from small warehouse to big warehouse as well as from one city to another city and this reduction in movement will also reduce the cost. So, these two policies will be quite beneficial for the logistic sector but it will take some time to have an impact.

Q: Budget is around the corner what are your expectations from it for your sector and the company in particular? Also, update us about the divestment of CONCOR?

A: As far as the budget is concerned, as I have said that the freight corridor will be ready and we expect it will lead to a slight decrease in prices. In addition, we expect that there is an allocation of funds for the railways so that the quadrilateral connectivity in which the western freight corridor and eastern freight corridor has to be connected with the South and East is completed sooner. After this, the diagonally, in which North to South and West to Ease corridors are presented should be completed at the earliest as it will increase and boost the rail movement of the domestic cargo. Currently, what we are doing is EXIM whether it container freight station or a gateway rail. We expect that post creation of this infrastructure in which railways will create its terminals or private sector terminals will come up and with it, we, as a company, want to emerge as rail freight operator not just as EXIM and that will be possible only if the turnaround time of the fast trains and long-route trains will be good. This will possibly lead to an increase in the domestic volume. As far as CONCOR is concerned, recently, it was announced that it will not be divested this year but its divestment is likely to take place next year. So, let's see when it comes to divestment but it is not possible this year.

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