CHENNAI: Hyundai Motor India Ltd (HMIL) has renewed its agreement with Chennai Port Trust (ChPT) for the next 10 years on similar lines as the previous agreement signed in 2006.
Under the new agreement, HMIL will export a minimum of 50,000 cars (same as last time) annually through the port. ChPT will provide 20 days of free storage of cars at the port, priority berthing of vessels and exemption from double berthing charges.
(Double berthing charges usually come into play if the ship is moved to the outer anchorage due to non-availability of cargo, and returns once it is ready. This involves two moves, and hence, two charges.)
A press release from Hyundai said: “We decided to renew our contract with the Chennai Port Trust as the terms and conditions and facilities offered by them suit our requirements the best,” said YK Koo, MD & CEO, HMIL, who signed the agreement with ChPT Chairman P Raveendran.
“Our competitive pricing helps exporters keep their overheads low, which is a definite advantage in the global market. The port is committed to a clean environment free from any pollution, which is a huge advantage for lifestyle cargo like cars, as there is no fear of contamination,” Raveendran was quoted as saying in a release.
For Chennai Port, the agreement with Hyundai is important considering the South Korean major has been exporting its cars through the port for the past 17 years, and is its biggest revenue contributor. It has stayed with the port while other car manufacturers like Nissan and Toyota have moved to Kamarajar Port for exports.
HMIL exports its cars to various destinations including Europe. However, its volume has been falling over the last few years as key markets, including West Asia, have showed a steady decline. Further, the company’s Turkey plant has been catering to some of the markets that the Indian plant earlier used to export to.
ChPT Traffic Manager B Vimal commented: “We considered many factors that Hyundai is facing while deciding on the agreement.”
Under the agreement, for up to one lakh cars, the wharfage concession will be 50 per cent of the port’s scale of rates; for above one lakh units, it will be over 70 per cent. For up to 20 ship calls, the vessel-related charges will be 10 per cent; the charge increase as the calls go up, he said.