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'This is the beginning of a big India story'

February 09, 2007 10:37 IST

Danish shipping giant Maersk Line is the largest container shipping company in the world with more than 500 container vessels and more than 1,400,000 containers. Maersk Line is the part of the A P Moller-Maersk Group, which has more than 110,000 employees in more than 125 countries around the world.

Besides shipping and logistics, the A P Moller-Maersk Group is engaged in the exploration and production of oil and gas, shipbuilding, industry and retail. Maersk carries the maximum containerised cargo in India.

The Chief Executive Officer of the container business of AP Moller-Maersk Group, Eivind Kolding was in India recently. Kolding, who is also partner of AP Moller and member of the executive board, spoke about his India plans with P R Sanjai. Excerpts:

How important is India for the AP Moller-Maersk Group?

India is a very important market for us. This market is very much vibrant and dynamic. More and more businesses from India bring me here. I personally met our Indian trade partners and got feedback from them. The overall business environment is improving with high growth in export-import trade.

Indian GDP grew by an average of 6.5 per cent and industry grew by 7 per cent in the past six years while containerisation logged a growth of 14 per cent. In short, during the last six years, for every one per cent growth in industrial output, containerisation has grown by 2.25 per cent. The government is also investing in creating infrastructure. The key beneficiaries of these initiatives will be sectors such as agriculture, auto and auto components, food processing, construction, paper, power and power utilities.

What is the growth plan for India? More shipping lines are starting services from India. Indian major ports' container terminals are flooded with requests for berths. How will you position yourself in the coming two years?

At present, Maersk Line offers the single largest service coverage among other shipping lines. We have 33 offices across all main ports and strategic locations including sub-agents and handling agents. We have a strong position in the country and we would maintain that.

Further growth would entail expanding our network, enhancing handling capacities at ports and putting in place a better organisational structure. The growth could also mean bigger vessels for existing services or more vessels or both. However, there are currently no plans to introduce new services from India.

At present, we have six direct services operating out of India with bigger vessels -- four from the Jawaharlal Nehru Port Trust (JNPT) in Maharashtra and two from the Pipavav port in Gujarat.

Shipping lines are increasingly getting into container terminal handling operations. Recently, Maersk has commissioned its third container terminal at JNPT. Which are the other sectors you would be targeting?

We will review each and every business prospect and take a suitable decision. We are here to grow. But there are no specific plans. Early January, we had commissioned the third container terminal at JNPT. Over 60 per cent of containerised cargo and 52 per cent of exports in value terms come from the north-west region. This terminal will have a capacity of 1.4 million twenty-foot containers.

Maersk also operates the Pipavav port in Gujarat, which handled

two per cent of western India's container throughput. Maersk is currently augmenting the capacity at the Pipavav port. The container terminal capacity is expected to be 1.3 million twenty-foot containers. To add, we had set up India's first container freight station (CFS) near JNPT with a combined total area of 123,806 sq m and warehouse space of 15,800 sq m. Besides, we operate the country's largest Inland Container Depot (ICD) at Dadri in Delhi.

The Maersk Group has tied up with India's railway PSU Container Corporation of India (CONCOR). Would you be opting for CONCOR in other upcoming projects as well?

Maersk has tied up with CONCOR for Gateway Terminals of India, the third terminal at JNPT. We are also running double stack container trains in conjunction with CONCOR between ICD Kanakpura (Jaipur) to the Pipavav port. It is also running a dedicated block train with CONCOR between Dadri and the Pipavav port. Private participation is the order of the day. We believe that is the way forward. But we will take a call on a case-to-case basis for emerging business opportunities.

What is Maersk's vision for India as a talent hub for the global shipping and container business? Maersk today employs over 5,000 people in India alone.

We have designed an International Shipping Education Programme. Under this, a trainee will undergo a two-year fast track management programme which combines on-the-job training with training at Maersk facilities in Copenhagen, Europe.

Maersk has been successful in recruiting, training and sending on overseas assignments over 200 management trainees from India through the Maersk International Shipping Education programme over the last decade. Every year, we select 35 to 40 trainees from India for this programme that will impart managerial capabilities also, apart from shipping expertise. India was always in our global talent pool programme.

India is witnessing a shortage of seafarers. What are the plans for cadets?

We want to tap the potential of young India. Towards this, A P Moller Singapore has entered into an agreement with the Academy of Maritime Education and Training (AMET) of Chennai for training cadets. The training facility at AMET will be responsible for imparting education to over 250 cadets each year for the AP Moller-Maersk Group. AMET will impart a cadet the experience of onboard as well as onshore training.

Maersk has already set up Global Service Centres in India. Can you explain the rationale behind this move? Is it just aimed at cutting down the cost?

We have set up Global Service Centres in Mumbai, Pune and Chennai. The core idea and objective of setting up these business process outsourcing operations is not just because of availability of cheap labour in this country, but the quality. I personally visited all these centres. It is amazing how Indian professionals are rendering the services. It is not a matter of cheap labour. We are driven by quality, not cost. We are planning to scale up these facilities in three centres.

At present, Mumbai has a seating capacity of 1,000 while Chennai and Pune of 800 seats each. These centres handle worldwide operations of documentation process, bill of lading functions, accounting and other helpdesk activities. The scaling of these operations is another efficient way of growth that brings quality at a lower cost.

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