The Adani group is planning to invest up to Rs 20,000 crore in expanding its cargo capacity at ports four times to 1 billion tonnes by 2030 to emerge as the world’s largest company in this field.
In this regard, the group may look at acquisition globally if it gets a good local partner in a country with economic and political stability, Karan Adani, scion of the Adani group and chief executive officer of Adani Ports & SEZ (AP&SEZ), said in an interaction on Sunday.
The group, which acquired Haifa Port in Israel early this year for $1.2 billion, is looking to acquire ports in East Africa (Kenya and Tanzania), Vietnam, and some in the Mediterranean Sea.
“The port overseas must have good trade ties with India and a strong domestic economy for us to invest,” Adani said. “Many ports across the world are run by the governments and they are looking to privatise them. We are looking at a few of them.”
Adani said the fight between Israel and Hamas had had no impact on operations at Haifa Port so far.
“We are confident of our investment in Haifa Port. When we had done our due diligence, we had expected some disruption. The port operations are going on and we do not expect any problem,” Adani said. Only 3 per cent of the AP&SEZ volumes currently comes from Haifa Port. “We do a lot of due diligence and take a lot of calculations when we are entering a country, but obviously, political stability is the most important factor,” he said.
Adani said the company (AP&SEZ) would invest Rs 5,000-6,000 crore each year in expanding its capacity. “The company is earning Rs 7,000-8,000 crore of free cash flow each year, which will be used to fund the expansion,” Adani said, as the group inaugurated its Vizhinjam trans-shipment terminal here. The company will buy back its entire foreign exchange bonds of $650 million by January, he said.
The estimated project cost for the first phase of the Vizhinjam project is Rs 7,700 crore, comprising a private-public partnership (PPP) component, funded work, external support infrastructure, the cost of land, rehabilitation, etc.
“We are confident of the business case in this site because there is a lot of interest from shipping lines from customers to use this port, and because of that encouragement we will be expanding as soon as this phase is over,” Adani said.
“With Vizhinjam Port and also our position in Colombo, we will be able to give a solution to the shipping lines connecting all our ports in India,” Adani said.
Vizhinjam Port will play a critical role from supply chain surety to shipping lines in terms of not just container but also from bulk, from bunkering and other commodities point of view, Adani said.
The PPP component, costing Rs 4,089 crore, consists of the berth, dredging and reclamation, project equipment, the container yard, and allied facilities.
The construction of a breakwater and a fishing harbour (funded work) will be constructed by the private partner, for which the Kerala government will pay Rs 1,463 crore.
Airport IPO after Navi Mumbai commissioning
The Adani group is looking to commission its Navi Mumbai airport project by next year and may come up with fundraising plans, including an initial public offering (IPO) for the airport vertical by 2026, Adani said.
The cement capacity of Ambuja Cements and its subsidiary ACC will increase to 140 million tonnes per annum (mtpa) by 2030 in accordance with the plans announced earlier, and the company is looking at acquisition in the sector if a good opportunity arises, said Adani, who is chairman of ACC. Of this, 30 mtpa of cement capacity will be announced before March.