Supply logistics of all companies will change after GST: V Kalyana Rama

Business Standard By Shine Jacob October 15, 2016. 21:50 IST

Container Corporation of India (Concor), the only listed company of Indian Railways, is expanding rapidly to double its turnover to Rs 12,000 crore in the next five years. Concor's new chairman and managing director V Kalyana Rama tells Shine Jacob about the company's plans, including diversification and acquisitions. Edited Excerpts:

After taking over as chairman of Concor, how would you leverage your experience in the company for further growth?

I have been here for the past 14 years. As chairman, my priority will be to look at opportunities for expanding business. Both export and import sectors are under pressure. Now, we are looking at various options to have better multi-model solutions to meet the needs of trade. We also target to increase our market share. For this, capacity augmentation and creation of new facilities will be among my priorities.

Our capex investment for the last five-year plan was around Rs 6,000 crore. We will be achieving around Rs 5,500 crore. For the coming year, it will be in the same range of Rs 1,000-1,200 crore. We are aiming at doubling our turnover to Rs 12,000 crore in the next five years.

We have plans to expand overseas. As of now, these plans are on the drawing board. Now, we are operating in Nepal and our focus will be immediate neighbourhood countries and then we will look at other countries. We are open to acquisitions both of Indian as well as foreign companies.

How do you plan to improve your multi-model transport operations?

Though we offer multi-model transport, a large percentage of our traffic moves by rail. We are trying to look more at road transport. Recently, the railways has started running timetable cargo trains. We are already running them on Delhi-Chennai, Delhi-Bangalore and Delhi-Hyderabad routes. They are running very well and are getting good feedback from the market. Now, we are looking at extending this model further, wherever required. I am discussing it with concerned railway officers. We are looking to use these timetable trains as a tool to attract more traffic from road to rail.

How do you plan to double your turnover?

It will be through various development projects. We are developing 15 multi-model logistic parks (MMLP), mainly near industrial hubs. Out of this, six are along western dedicated freight corridor. We are readying ourselves in advance for the traffic to be moved on western DFC. For the entire project, we expect an investment of about Rs 4,000 crore. Of these, few facilities will be starting phase-I of 12 MMLPs by this financial year.

Another focus area is service-level improvement, where we will be looking at customer service as a high priority area. We are already investing in these systems. We are looking at a new concept of customer value creation, which requires service-level guarantees.

Will you be focusing more on domestic market? What will be the changes Concor will undergo in post-GST scenario?

The containerisation in domestic market is very low. We specialise in containerisation and as the domestic share of containers goes up, our share will also go up. In the present circumstances, the share of EXIM traffic will be more than domestic. The infrastructure in many small towns needs to improve for the containers to go. Post GST, there is a chance for more containerisation as large quantities of goods will start moving. The supply-distribution logistics of all major companies will change in post GST scenario. Large containers will start moving into warehouses.

Will you get more rakes as part of your expansion drive?

We have around 300 rakes now. Of this, about 265 are of high-speed, ranging about 100 km. I cannot give you exact figures of how many more rakes we will be adding. But once DFC comes, each rake of same size will carry 180 containers, compared with 90 now, because it will be double stacking. Moreover, the time taken will be one third. So, even if we continue with the same number of rakes, capacity will increase. My rake requirement may also come down. We got our capex programme for procurement of rakes also. But that will be as per demand.

With road infrastructure improving, traffic is shifting from rail. Do you see it as a challenge for Concor?

It is a challenge as well as an opportunity. We don't say no to road traffic and we have presence in road traffic too. But our main emphasis is on rail. Of our total traffic, around 90 per cent goes by rail and 10 per cent by road. Our aim will to utilise both these modes to garner more market share, by clubbing and improving road transport with rail.

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