industry

Gateway Distriparks plans to expand rail business


is planning to expand its rail business and will stall investments on its container freight business, its chairman said

The company also plans to double its cold chain logistics handling capacity in 2 years, said a person in the know.

“In Gateway Rail, we were doing very well before Covid and at Covid time, the volumes dropped significantly. But from Q3 onwards, in December we did the highest in the history of the company in the rail business. The trend is continuing in the month of January and will continue to look up going forward,” Prem Kishan Dass Gupta told ET in an interview.

The company spent Rs 1,200 crore on the rail business in the last decade. Its business is aligned to the western dedicated freight corridor (DFC) and will expand considerably as additional phases of the DFC are completed.

Gateway Rail provides inter-modal logistics and operates its own rail-linked Inland Container Depots (ICD) at Gurugram, Faridabad, Ludhiana and Viramgam. It also operates a domestic terminal at Mumbai. The company operates a fleet of 31 trains and 335 road trailers at its terminals. Gateway Rail operates regular container train services from these ICDs to the Nhava Sheva, Mundra and Pipavav ports, transporting EXIM as well as domestic containers. All major shipping lines operate from these terminals.

“When the DFC is ready, we can have a turnaround of less than 24 hours,” Gupta added. “We see a big jump of this heavyweight cargo. A lot of light weight cargo will also shift from road to rail.”

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Gupta said the company was currently handling 250,000 TEUs at all its locations, but its handling capacity with all its land bank is 1.5 million TEUs. The land bank and the fact that all further trains will be leased will make the expansion less capital intensive, he added.

The DFC link to Pipavav and Mundra will be extended in a few months, while the one to Nava Sheva it will take a year.

Gupta said there is a throughput increase in containers, but the company will not make any further investments in the segment as “volumes are less, and competition is intense”.

GDL operates two Container Freight Stations at Navi Mumbai and one each at Chennai, Krishnapatnam, Kochi and Visakhapatanam with a total capacity of over 600,000 TEUs. These CFSs offer transportation & storage, general and bonded warehousing, empty handling and several value-added services.

In the cold chain segment, the company is planning to double capacity to 200,000 pallets in 2 years, said a person close to the know. Its subsidiary

is in the process of raising close to Rs 250 crore via a QIP.

The person also told ET that Adani Logistics, which now owns less than 1.5% in Snowman, may exit soon.

Last December, Adani Logistics, a unit of Adani Ports, agreed to acquire 40.25% stake in Snowman Logistics from promoter Gateway Distriparks at Rs 44 per share along with an open offer to take another 26% from public shareholders. However, the price crashed to Rs 24.60 in the month of March.

In May, Gateway Distriparks called off the deal and said the condition for completion of transaction by March 31, 2020, was not met by the acquirer, and the agreement is not in force due to repudiation by the acquirer.

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However, in July, Adani Logistics and Gateway Distriparks announced the settlement of a dispute over sale of controlling stake in Snowman Logistics. Adani Logistics then agreed to continue as a minority shareholder with 26% stake without having any right to nominate any director on the board nor to involve in the day-to-day management of the cold chain company.

Adani Logistics which held 26% stake in the cold-storage operator as on 30 September sold 14.79% or 2.47 crore shares between 27 November and 24 December. It subsequently sold further.

Snowman Logistics has 31 warehouses in India.





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