Shreyas Shipping & Logistics Ltd Management Discussions.


The acceleration in global activity that started in 2016 gathered steam in 2017, reflecting firmer domestic demand growth in advanced economies and improved performance in other large emerging market economies. Global growth is set to be just over 3.5% in this calendar year 2018, the fastest for seven years, with improved outcomes in both advanced economies and the EMEs. Confidence measures and levels of new orders for businesses remain strong. This long awaited lift to global growth, supported by policy stimulus, is being accompanied by solid employment gains, a moderate upturn in investment and a pick-up in trade growth. The continued expansion depends on robust global growth and governments support for right trade policies. However, there are signs that escalating trade tensions may already be affecting business confidence and investment decisions, which could compromise the current outlook. Also, during the year crude oil witnessed a 30% increase in the price and hovered around USD 50 for most part of the year.

(Source: IMF and OECD)


Indian economic growth is giving a positive signal for the current and future scenario. It is projected to strengthen to above 7%, gradually recovering from the transitory adverse impact of rolling out the Goods and Services Tax (GST) and measures to choke off the black economy, including demonetisation. Indias GDP grew 7.2% in the third quarter of 2018, surpassing expectations and wresting back the mantle of fastest growing economy from China on the back of a rebound in industrial activity, especially manufacturing and construction, and an expansion in agriculture. Reserve Bank of India has estimated GDP growth in a range from 7.4% to 7.9% for the Financial Year 20192020. (Source: OECD and Economic Times)

Fiscal deficit for 2017-18 is revised to INR 5.95 lakh Cr at 3.5% of the GDP which is approximately the same as 2016-17 in spite of transformation in the economy. In addition to initiatives like "Make in India", "Housing for All" and "Digital India" government has also introduced "SagarMala" and "Bharat Mala" initiatives which are expected to boost the domestic growth of the country.


The maritime sector plays an important role in Indias foreign trade, accounting for about 95 per cent of the countrys trade by volume and 70 per cent by value. The sector has been under pressure for years, due to a weak global environment, falling freight rates, contraction in imports and exports, along with issues on the domestic front. Having said that, freight transport is expected to grow at a CAGR of 13.35% by 2020 and this can be attributed to increased demand and supply factors associated with industries like manufacturing, FMCG, E-commerce and Retail.

While the sector will remain dependent on global trade cycles, increased government support in terms of announcements of new policy measures is expected to provide a more conducive environment for stakeholders, going forward. In recent years, the government has launched various policy measures across the maritime chain - ports, coastal shipping, inland water transport (IWT), and ship building, repair and breaking - to promote sector growth. The past two years have also been marked by the launch of Sagarmala, the most ambitious programme for the maritime sector to date. Its implementation aims to cut logistics costs, create new infrastructure, aid in employment generation, etc. While the roadmap for the programme is still evolving, that progress has been made towards project implementation is quite evident.

In a push to developing an integrated logistics framework in the country including industrial parks, cold chains and warehousing facilities- the government has granted infrastructure status to the logistics sector, enabling the industry access to cheaper finances. The size of the logistics sector in India is estimated to be USD 260 Bn; the government expects the Indian logistics sector to grow to USD 360 Bn by 2032. It is estimated that the Indian logistics industry will continue to show robust growth of 10-15% annually, leading the pace of growth of the economy at large.

Road has become the dominant mode of transport for Indias freight traffic. However, to meet the demands of growing freight traffic, a shift to more economical as well as environmentally suitable modes i.e., waterway is vital. In addition to a greater emphasis on waterways, the right mode of transport has to be used. Rail and waterways should be prioritised for long distances, rail for medium distances and roads including expressways, for shorter stretches. Such a balanced modal approach would lower transportation costs, achieve greater efficiency and be more environment-friendly.

(Sources: OECD Economic Outlook, World Trade Organization Report; Building India - Transforming the Nations Logistics Infrastructure McKinsey & Company and other news articles)


In terms of value, global seaborne container trade is believed to account for approximately 60 percent of all world seaborne trade, which was valued at around 12 trillion U.S. dollars in 2017. While the quantity of goods carried by containers has risen from around 100 million metric tons in 1980 to about 1.7 billion metric tons in 2015, vessels have likewise increased their capacity. Between 1980 and 2016, the deadweight tonnage of container ships has grown from about 11 million metric tons to around 244 million metric tons. As of July 2016, the global cellular container ship fleet had the capacity to carry some 20 million standard containers.


India has 12 major ports, 6 on the Eastern coast and 6 on the Western coast. Under the National Perspective Plan for Sagarmala, six new mega ports will be developed in the country. Indias 200 non-major ports are strategically located on the worlds shipping routes.

*up to Feb 2018(Source: - the statistics portal)

In FY18 (up to Feb 2018) major ports have handled 616.62 million tonnes of traffic, showing a year-on-year growth rate of 4.97 per cent.

Capacity at major ports grew to 1,065 MMT in FY17, implying a CAGR of 7.75 per cent since FY07. Utilisation rates of major ports in India such as JNPT port, Kandla port, Ennore port, etc., are much above the worlds average. As of February 2018, 21 dry port projects in India are under implementation. Indian Port Rail Corporation Ltd. (IPRCL), plans to conduct rail infrastructure expansion and modernisation work for JNPT, Kandla Port and Haldia Dock Complex in April 2017. Similar works have already started for Kolkata, Vishakhapatnam, Tuticorin, Mangalore and Chennai ports. Germanys Deutsche Bahn Engineering and Consulting plans to form a JV with Indian Port Rail Corp Ltd (IPRCL) with an aim to connect Indian ports with railways. Germany and India are working on projects worth US$14.87 billion being implemented by IPRCL.

Ports handle almost 95 per cent of trade volumes; thus rising trade has contributed significantly to cargo traffic. Increasing trade is translating into higher demand for containerisation due to their efficiency. During FY07-17, container traffic rose to 124.58 MMT, implying a CAGR of 5.9 per cent.








2018* 2017 YEAR TRAFFIC
Kolkata Dock System 17,390 16,810 3.45
Haldia Dock Complex 40,496 34,141 18.61
TOTAL: KOLKATA 57,886 50,951 13.61
PARADIP 1,02,013 88,955 14.68
VISAKHAPATNAM 63,537 61,020 4.12
KAMARAJAR (ENNORE) 30,446 30,020 1.42
CHENNAI 51,881 50,214 3.32
V.O. CHIDAMBARANAR 36,575 38,463 -4.91
COCHIN 29,138 25,007 16.52
NEW MANGALORE 42,055 39,945 5.28
MORMUGAO 26,897 33,181 -18.94
MUMBAI 62,828 63,049 -0.35
JNPT 66,004 62,151 6.20
KANDLA 1,10,099 1,05,442 4.42
TOTAL: 6,79,359 6,48,398 4.77


To harness Indias 7,500 km long coastline, 14,500 km of potentially navigable waterways and strategic location on key international maritime trade routes, the Government of India has embarked on the ambitious Sagarmala Programme to promote Port-led development in the country. Envisaged by the former Prime Minister Shri Atal Bihari Vajpayee, the concept of Sagarmala was approved by the Union Cabinet on 25th March, 2015. Union Minister of Road Transport and Highways and Shipping Nitin Gadkari said that the ministry expects INR 15 lakh crore investments under the ambitious Sagarmala infrastructure development programme. "About INR four lakh crore investment we are expecting to be made in road connectivity, port- rail connectivity, modernisation and mechanisation of ports. Already, work worth INR 2.80 lakh crore" has commenced, he said. Under this programme, the ministry planned to develop Special Economic Zones, coastal development zones, industrial, petroleum and automobile clusters

For promoting port-led industrialization, 14 Coastal Economic Zones (CEZs) covering all the Maritime States and Union Territories have been identified as part of the National Perspective Plan under the Sagarmala Programme. The Perspective Plans for all 14 CEZs have been prepared in consultation with relevant State Governments and Central Ministries.

Port-led industrialization through the proposed development of CEZ under Sagarmala Programme are expected to provide impetus to the "Make in India" initiative of the Government of India, that will aid in creation of jobs in India. Finalization of institutional framework and roadmap for the development of CEZ based on the recommendations of Inter-Ministerial Committee has been taken up.

(Source: Ministry of shipping)


Ports act as an economic catalyst and help in integrating smaller economies with the global economic system and waterways are the most economical means of bulk transport. For industries to grow and develop in an economy, a well-developed logistics is required. India is striving to improve its manufacturing competitiveness with the "Make in India" initiative. Ports are the drivers of socio- economic change and aid long term growth trajectory of the economy. The Government is making effort towards developing ports into manufacturing ecosystems which attract trade as well as investments. Ports also aid in creating employment and economic and industrial growth of an entire region. The next leg of growth in cargo capacity handled is expected to be led by the containers segment. Major ports in India are already ramping up container handling capacity. With the Sagarmala Programme aiming to increase depth of major ports, Indian ports would be able to handle new-generation mega vessels in the next 2-3 years. We expect cargo container handling to reach 25 million TEU by 2020-21 across major and non-major ports from the current 13 million TEU. Non-major ports are expected to add higher capacity in the segment.

Movement of cargo through coastal shipping has inherent advantages over land modes of transport such as road and rail as it is more cost effective, causes much less pollution, reduces congestion on land and can cater to huge parcel sizes. In view of this, Government of India has initiated several measures for promoting coastal movement. Globally countries such as China and Netherlands have achieved a modal share of 24% for coastal shipping and inland water navigation. In India, coastal shipping accounts for only 6 per cent of the countrys total domestic freight (on a tonne-km basis) and is poised to grow to 12% by 2025 with the initiative of Sagarmala project.

The long-term outlook for the sector remains positive, backed by a series of government initiatives being taken. The goods and services tax, rolled out from July 1, 2017, is likely to have a positive impact on reducing logistics costs in the country. The launch of Sagarmala with its focus on "port-led development" instead of only "port development" has brought optimism among stakeholders with the plethora of opportunities that it offers. As part of the programme, the focus is not only on capacity creation. Equal emphasis is being laid on mechanising port operations, developing smart and sustainable ports, providing adequate connectivity and deeper draught levels, developing coastal and IWT, and promoting the ease of doing business. Overall, 415 projects worth INR 8 trillion are planned to be undertaken as part of Sagarmala.

The Sagarmala project is one of the strategic and customer-oriented initiatives to modernize Indias ports to augment coastal movement so that ports become drivers of economic growth. Increasing the share of coastal shipping and inland navigation in the transport modal mix is one of the key objectives of the Sagarmala Project.

Pro-active policy initiatives have resulted in the installed capacity of the Major Ports going up from 1,065.83 MTPA during 2016-17 to 1,359 MTPA. Capacity constraints and lack to modern facilities at Indian Ports tremendously elongates the time taken to ship goods in and out of the country and has held back Indias share in world trade. Sagarmala could boost Indias merchandise exports to $110 bn by 2025 and create an estimated of 10mn new jobs.



Incorporated in 1988, Shreyas Shipping and Logistics Ltd (Shreyas), is a part of the 40-year old global conglomerate Transworld Group, and is headquartered in Mumbai, India. The company is a pioneer and market leader in domestic coastal container shipping services and coastal transhipment services covering most major ports and container terminals on the Indian coast. Shreyas also pioneered domestic multimodal transportation in India and it continues to command its premier position till date. It is a preferred partner of most Main Line Operators for EXIM transhipment services at various Indian ports. The company owns and operates a fleet of 13 vessels with a total capacity of 23,143 TEUs, 248,392 GRT & 3,15,722 deadweight tonnage and operates across most Indian container ports.

Along with the container cargo business, we have entered into the break bulk cargo business as well. We see great potential in the break bulk business and aim to be leaders in the same. For the first time in the history of the company, we bought 4 vessels in one financial year. This included 2 container vessels and 2 multi-purpose vessels. With all the thrust by the government given to the shipping industry, we expect both our verticals to outperform.

Achievements during the year

1. SSLLs domestic cargo trade of 109,766 containers in the year 2017-18 as against 59,521 containers in 2015-16 achieving a growth of 84%. This corresponds to carriage of 3.3 million tons containerised cargo in the year 2017-18 as against 1.8 million tons two years earlier.

2. Shreyas handled total volume of 448,200 Teus in 2017-18 as against 331,000 Teus in the last year with a growth of 35%

3. Besides handling containerised cargo, SSLL commenced handling coastal break bulk cargo in the 2nd half of year 2017 and handled 107,324 MT cargo during the year, mainly steel products of RINL and JSW, besides some project cargo. RINL commenced coastal movement of steel products for the first time venturing into modal shift from land to sea mode.

4. Total coastal throughput at Indian ports was 1.5 million Teus in the year 2017 as against .85 million Teus in the year 2015 while SSLLs throughput at Indian ports was 0.8 million Teus in the calendar year 2017 as against 0.45 million in 2015, achieving a growth of 78% in the two years. Growth of 90% in domestic throughput at Indian ports is indication of modal

shift of cargo from land to sea mode while 55% growth in throughput of Exim volume is indication of shift of volume from foreign transshipment ports to Indian ports. Shreyas has contributed for the growth in coastal shipping on both fronts as envisaged by MOS.

5. To achieve the growth mentioned above, SSLL acquired 4 vessels including two multipurpose vessels of capacity totaling to 99,567 DWT and 7,603 TEUS in the year 2017-2018 , achieving a growth of 56% while there has been 17% CAGR increase in Indian flag container fleet from 2014 until 2017. SSLL is the largest container ship owning & operating company in India.

6.18 major ports and container terminals in India were serviced during year 2017 by SSLL containers and break bulk coastal services on regular frequency, making 1060 port calls during the year.

Financial highlights of the year

Standalone revenues for the year 2017-18 stood at INR --544 cr as against INR 376 cr for FY17 which grew by 45%. EBITDA for FY18 is at INR 115 cr as against INR 55 cr during FY17 which grew by 109% and PAT stood at INR 81 cr as against INR 4 cr in FY17 which grew by 1925%. Considering share of profit of an associate and joint venture of INR 11 cr (net of tax adjustment), consolidated PAT stood at INR 92 cr for FY 18.

Our Strategy

Shreyas Shipping wants to work with similar vision of Government to develop coastal shipping and integrate inland waterways network. We want to develop transhipment over Indian terminals. The plan is to continue to grow in container as well as break bulk business. We over the period of last 5 years, have started acquiring economic and fuel-efficient vessels. This has helped in reducing the cost per TEU and eventually has led to increase in the margins. We have bought four vessels in the last financial year and we will continue to add capacity going forward. With more and more companies across industries starting to use waterways as the mode of transport instead of roadways and railways, we are prepared to capture this growth. Earlier, the composition of cargo was dominated by heavy construction material but now the cargo is diversified and it includes food grains, fertilizers and other industrial products. At the same time, we constantly look at new markets/routes which we can serve and add to our existing routes. Along with the container business, we are looking forward to strengthen the coastal breakbulk business as well using the multi-purpose vessels.


At SSL, we have a comprehensive risk management structure with benchmarks and reporting framework. Our objective is to identify, evaluate and counter potential risks through an institutionalised approach. As such, we have divided our risk categories as external and internal and identified the key risks that may impact the regular operations of the company.


Global Trade/Demand Prospects: The demand for shipping and containerisation largely depends on factors such as Global GDP growth, Global trade patterns. i.e. movement of goods from production to consumption centres and major political and economic developments across economies.

Bunker Cost: Bunker cost, also known as the oil prices, impacts the profitability of the business. Higher oil price turn into high operating cost which, if not accompanied by a proportionate rise in freight rates, will affect the margins of shipping companies.

Unfavourable Trade Regulations: Regulations exist at several different tiers, imposed by national, regional and local authorities. Regulations often differ from city to city, which may hinder the creation of national networks, thus impacting the shipping operations.

Poor infrastructure: Improper facilities at the terminal, insufficient integration of transport networks, weak information technology (IT) support, warehousing and distribution facilities can prove to be another hindrance in smooth operations.

human resources

The Company considers its human capital as an invaluable asset. The Company continued to have cordial relationships with all its employees. The Company ensures safeguarding, training, development and growth of its workforce. The total workforce of Your Company stood at 35 shore stuff and 250 floating stuff on 31st March, 2017.

internal control systems and their adequacy

The Companys philosophy with regard to internal control systems and their adequacy has been the basis behind the formulation of effective systems. It is their strict implementation that ensures The Companys assets and interest are safeguarded; checks and balances are in place to determine the accuracy and reliability of accounting data.

cautionary statements

Statements in this report describing The Companys objectives, projections, estimates and expectations may be forward looking statements, within the meaning of applicable laws and regulations, based on beliefs of Shreyass managements. The Companys current views with respect to the future events and are subject to risks and uncertainties. Many factors could cause the actual result to be materially different from those projected in this report, including amongst others, changes in the general economic and business conditions, changes in the currency exchange rates and interest rates, introduction of competing services, lack of acceptance of new services, and changes in business strategy. Shreyas does not intend to assume any obligation to update any forward-looking statements or information, which speak as of their respective dates reflecting circumstances arising after this date or to reflect the occurrence of underlining events, even if the underlining assumptions do not come to fruition.

for and on behalf of the Board of Directors
Place: Mumbai S. Ramakrishnan
Date: 25th May, 2018 Executive chairman