Job offersmore »

Tweeting Growers

Top 5 - yesterday

Top 5 - last week

Top 5 - last month

Exchange ratesmore »

Soren Skou:

Maersk to build network of inland container depots in India

Soren Skou, the 52-year-old CEO of the Copenhagen-based AP Moller-Maersk, says the company considers India to be an investment destination. 

In an interview with ET’s Anirban Chowdhury and Satish John, Skou said the $35-billion shipping conglomerate could invest more in port facilities. 

How important is India to Maersk? 
India has got demographics that the rest of the world will envy for many, many years to come; not least in terms of the large young population that will be coming into the workforce. One of the keys to fulfilling this potential of long-term growth is to deliver on logistics and infrastructure. The focus that the current administration has on infrastructure is very important and makes a lot of sense. That is something that we can only support. 

We are as a company, a very significant global player in container shipping, in logistics, in ports. We are in the process of acquiring a German company called Hamburg Sud and with that acquisition, we will get very close to 20% market share. Apart from that; we own stakes in 76 ports around the world. That includes two in India. We believe infrastructure is key to economic growth and we will do what we can to develop infrastructure in India, by investing in ports, in inland ports; and inland container depots (ICD) to facilitate the development of logistics infrastructure. 

What are your investment plans in India? 
As a company, we own eight ICDs in India. This week; I will be inaugurating another one that we have been building together with a partner in Pune. The partner is building that facility but we are underwriting that with a $42-million commitment. We are in the process of building a cold storage in Chennai which is another area in which we see plenty of opportunity for expansion and growth. Our long-term plans clearly involve investing in more ICDs and we would like to build a solid network in India of ICDs alone. 

When it comes to ICDs, the investment is typically in tens of millions of dollars and when it comes to ports it's in the hundreds of millions. We invest every year, globally between $2.5 billion-$3.5 billion in our shipping; ports and logistics business and I am sure that part of that investment will be spent in India in the future. 

Over the last 10 years, we have on average invested $500 million to $1 billion on APM Terminals, our ports business. If we see good opportunities in India in the coming years, this would be high on our list of priorities for investment. 

Would you be interested in investing in building and owning ports in India? 
A couple of years ago, we tried very hard to get a port on the east coast. We were outbid. We look at port investments thus: We will invest if there is growth potential, and if there is a good regulatory framework. And if our customers believe there is a demand. I would certainly not rule out future port investments in India. 

But there has been also news of your plans to divest a stake in both your port investments in India... 
We own 76 ports around the world. This is a large portfolio of holdings. And we look to both invest and divest if such decisions make financial sense and if they fit into our strategy. So, we look at the whole portfolio including Gujarat Pipavay. On the whole, we have invested in a number of ports over the years. Our portfolio is growing. We are constructing ports in four different places in the world. And all these projects are billion dollar projects, some of them with partners. Our investment in ports has gone up from $5 billion five years ago to $8 billion of invested capital this year. It will increase more next year. 

Would you look at a partnership with the Adani Group which has been aggressively expanding its ports business? 
We use a number of the Adani facilities, including the one at Mundra. Investing in ports with partners is a very common model for us. Port investments entail a lot of money and having a partner who can share the risk makes a lot of sense. Often it makes sense to have a local partner. 

How do you feel about the government's initiatives in the ports, shipping, and logistics sector? 
We have confidence that the government is taking the initiatives that they need to take to attract the investment to build infrastructure with the speed that everybody would like. The 'ease of doing business' has improved significantly and quite a few things are in place. It is quite clear from conversations with the government that they want to see investments in this sector. They see logistics as a key component of the economy. 

About your trade finance start-up to help small businesses ... ?
We started the project with India. We are now active in 5-6 markets around the world. It's still in pilot stages. But we will offer our customers not only transport of goods but also finance during transit and arrange payments between shippers and consignees. 

Why did you choose India as the first market for this initiative? 
We thought there was a market opportunity here for small and medium-sized exporters. It's quite complicated for them to get banking services. I think we also have the talent to try and build the business from the ground up. Of course, we know the shippers and the consignees and their credit history. So we tend to provide finance to people that we actually know. We are the ones that issue documents. We have physical control of the containers. We believe we have a relatively good model for managing the risk. 

Publication date: 11/27/2017



Other news in this sector:

1/18/2018 US: Agrinomix is no longer a dealer of Martin Stolze
1/18/2018 Inverca and Deforche Construct sign business collaboration agreement
1/18/2018 Shakti Cocos continues as an independent company
1/18/2018 US: Rescued produce delivered farm to door
1/18/2018 ICL expands technical sales team
1/17/2018 AU: "Getting more from your system, straight from the commissioning stage"
1/17/2018 NL: Vyverberg first consultancy firm to receive HortiQ certificate
1/17/2018 CAN (ON): John Sebele joins A.M.A. as warehouse supervisor
1/17/2018 US: Kemin expands Crop Technologies sales force
1/16/2018 US (GA): Green-Tek announces new location in Baldwin
1/16/2018 UK: ICL expands technical sales team
1/16/2018 Syngenta appoints Chief Sustainability Officer
1/15/2018 Regulators stall Bayer-Monsanto megamerger
1/15/2018 US: RainSoil adds Danny Brooks as sales rep
1/15/2018 Belgian tomato producer Stoffels to expand with private equity funding
1/15/2018 Poland gets first agrifood cluster
1/15/2018 The euro: all signals on green
1/12/2018 Ukraine: Agrarian associations merge into Ukrainian Agrarian Forum
1/12/2018 Frustrated Australian growers threaten a boycott
1/12/2018 Biobest acquires equity stake in IVOG