• Capacity utilisation grows to 94% • Share of captive cargo increases to over 80% • Company doubles coastal movement volume
MUMBAI: Essar Shipping Ltd (ESL) reported strong operational performance with a 22% growth in cargo handling in FY2016-17. During this period, the company’s 14-vessel fleet also grew its capacity utilisation to 94% from 80% in the previous fiscal. The Baltic Dry Index, a key indicator of freight rates, has also gone up by four times during FY16-17 from an all-time low of 290 (in February 2016) to a high of 1,300 (in March 2017).
In FY17, ESL carried dry bulk cargo of almost 11.5 million tonnes, as against 9.4 million tonnes in the previous financial year. More than 80% of its fleet carries dry bulk cargo, which includes products like iron ore, coal, bauxite and limestone.
ESL’s two VLCCs—MT Smiti and MT Ashna—are used for crude oil transportation and are employed on spot contracts to take advantage of volatility in the crude oil prices.
A highlight of the FY17 fiscal was the doubling in coastal cargo movement triggered by the increased capacity utilisation at Essar Steel, which is among ESL’s key customers. The company also benefitted from a considerable growth in backhaul cargo both on the East and West Coasts of India because of the all-round growth in Essar Steel.
Speaking on ESL’s performance, Mr Ranjit Singh, Executive Director & CEO, said: “Our strategy to have an ideal mix of captive and market cargo has ensured better utilisation of vessels in FY17. The stronger Baltic Dry Index, coupled with increased activity and capacity utilisation at Essar Steel, has also made a positive impact on our toplines. I am happy that we have been able to demonstrate our commitment to promoting the Government’s initiative by growing our coastal cargo movement significantly. Almost half of our fleet is currently engaged in coastal movement.”