Significant Achievement: Fourth cement terminal at Cochin port starts operations

Fourth cement terminal at Cochin port starts operations

In line with the objectives laid down under Sagarmala, there is a need to promote coastal shipping as a cost-effective and an environment-friendly means of transportation vis-à-vis road and rail. This shift is also expected to transform the country’s logistics landscape. Commissioning of the fourth cement terminal at Cochin port is a step in this direction, as a modal shift in the transportation of cement, a high-volume, low-value commodity, is the need of the hour.

In a move to facilitate the installation of automated cement bagging units, Cochin port has operationalised its fourth cement terminal, developed by Penna Cement Limited. The commencement of operations was marked by the arrival of the vessel Penna Suraksha from Krishnapatnam port.

The agreement

In August 2014, Cochin port signed an agreement with Penna Cement for the allotment of 1.14 hectares  of land for setting up a bulk cement and bagging plant near Ernakulam Wharf on Willingdon Island for a period of 30 years on an annual lease rent basis. The terminal has an annual throughput of 0.3 million tonnes (mt) and comprises four silos with a total capacity of 20,000 tonnes and a design capacity of 0.5 million tonnes per annum (mtpa). It was designed to connect the Q6 berth at Ernakulam Wharf, where the ships carrying cement will be berthed, for transferring the cargo to the silos through pneumatic suction.

For Penna Cement, the new terminal will help in catering to the requirements of central and south Kerala. The current annual sales volume of the company for the entire country is about 5.8 mt, of which about 0.3 mt comes from north Kerala. Meanwhile, it will also help in meeting the increased requirement for cement for rebuilding the state in a cost-effective manner in light of the recent floods that have caused widespread destruction in Kerala.

Strategic importance

The development of the terminal is in line with the strategic plan of the Ministry of Shipping to promote coastal shipping as a cost-effective and an environment-friendly means of transportation. The coastal movement of cement has been highlighted as an important segment of the country’s coastal shipping potential, since coastal shipping of building materials is financially and commercially economical especially as cement is a high-volume, low-value product.

Cochin port as a cement handling hub

Over the years, Cochin port has emerged as a major cement handling hub in the country. This is due to the rising demand for the commodity across south India, especially Kerala. As per estimates, cement throughput at the port has grown substantially during the five-year period 2012-13 to 2016-17, from about 311,000 tonnes of cement handled in 2012-13 to 816,000 tonnes in 2016-17, a significant increase of over 162 per cent. This rise in the cement handling traffic has not only increased revenues, but has also generated employment opportunities for locals, involving the evacuation of cargo from Kochi to other parts of Kerala.

Besides the new terminal, Cochin port has three operational cement terminals – a 0.3 mtpa terminal operated by Ambuja Cement Limited, a 0.2 mtpa terminal operated by UltraTech Cement Limited, and a 0.36 mtpa terminal developed and operated by Zuari Cement Limited. The terminals handle approximately 783,000 tonnes of cement annually with each terminal having a minimum guaranteed throughput of 0.3 mtpa, as per the agreement with the Cochin Port Trust.

Regarding future plans in the cement handling segment, Cochin port is planning to expand its capacity to handle a total of 1.5 mt of cement annually by 2020. Besides, the port trust has also allotted about seven acres of land to Malabar Cements Limited near the waterfront for a period of 30 years to establish another cement terminal at the port. Work on the terminal, which will have a capacity of about 0.6 mtpa, is currently in progress and is likely to be completed by March 2019. Meanwhile, Sanghi Cement has also submitted a proposal to the port for setting up a floating facility for handling cement.

The port has recently implemented a new berthing policy scheme, wherein a performance-based incentive/penalty has been made applicable to ships carrying petroleum, oil and lubricants, and cement. This initiative is expected to improve port productivity and turnaround time of the POL and cement ships.

Towards the future

Overall, going by previous estimates and the increasing demand for cement in south India, the cement segment at Cochin port is expected to register a growth from approximately 0.8 mt to about 1.1 mt with the commencement of operations at the new cement terminal and further by about 0.3 mt after the commissioning of the fifth cement terminal by Malabar Cements. Hence, the port is making good progress towards its goal of emerging as the largest cement hub in the future, and this would further contribute to the financial as well as overall performance of the port.