Drewry GTO Review: The only way is up for Adani

Indian player is highest placed new entry in latest terminal operator guide

India’s Adani is the highest-placed of the new entrants in Drewry’s latest Global Container Terminal Operators Annual Review and Forecast, while MSC Group recorded strongest growth, thanks to its earlier acquisition of Bolloré Africa Logistics.

The position of the largest global terminal operators (GTOs) at the top of the rankings has further strengthened, Drewry said, with the seven largest firms now handling over 40% of global port throughput on an equity-adjusted basis. PSA International retained the top spot in the equity-adjusted rankings, with an adjusted throughput of 62.6 million TEU in 2023, up 4.6% over 2022.

“The seven largest GTOs all reported equity-adjusted throughput of more than 40 million TEU in 2023,” said Eleanor Hadland, author of the report and Drewry’s senior analyst for ports and terminals. “While several of the smaller GTOs have clearly stated their intention to expand their portfolios, there are very limited opportunities to close the 30 million TEU wide gap that exists between this leading pack and the rest of the table.”

Looking ahead, Drewry expects AD Ports and Hapag-Lloyd to improve upon their rankings, once the full-year impact of their 2023 acquisitions will be seen. Last year, AD Ports Group acquired Noatum, a Spain-based logistics company, for approximately $720 million, boosting its presence in 26 countries. AD Ports has integrated Noatum’s maritime, ports and logistics businesses, which include operations in 16 ports across Spain and the UAE.

Hapag-Lloyd, meanwhile, acquired SAAM Ports and SAAM Logistics in a reported $1 billion deal, expanding its footprint across port operations in Latin America, including Chile, Ecuador and other key markets. It also finalized its acquisition of a 40% stake in the Italian logistics firm Spinelli Group, gaining access to logistics services and port terminals in northern Italy.

Adani’s Overseas Push

The highest placed of the new entrants, Adani secured 13th position in the Drewry rankings with equity-adjusted throughput of 6.5 million TEU – a position expected to improve next year with strong performance in the Indian market, bolstered by international developments.

In a recent webinar, Drewry provided more detail on Adani’s growth. “Adani Ports have emerged as the largest Indian port operator since it opened Mundra port in 2001,” said the independent maritime research consultancy. “It’s push into overseas markets is similar to the strategy it pursued in India, with a focus on securing concessions to develop and operate ports and terminals.

“It’s qualification as a GTO was achieved on the back of the winning bid made by the Adani-Gadot group JV for the Haifa port concession in Israel, which was awarded in 2022 and handed over in early 2023.”

This year, Adani secured concessions to operate Container Terminal 2 at Dar es Salaam Port, Tanzania, whilst it is also a 51% shareholder in the joint venture developing a container terminal in Colombo, Sri Lanka.

At the time of the Dar es Salaam deal, Karan Adani, managing director of Adani Ports and Special Economic Zone (APSEZ), said: “The signing of the concession for Container Terminal 2 at Dar es Salaam Port is in line with APSEZ’s ambition of becoming one of the largest port operators globally by 2030.

“We are confident that with our expertise and network in ports and logistics, we will be able to enhance trade volumes and economic cooperation between our ports and East Africa. We will strive to transform Dar es Salaam Port into a world-class port.”

Drewry said Adani’s capacity is forecast to increase by 40% or 5.5 million TEU to reach 19.2 million TEU by 2028, with almost 40% of this increase in overseas markets. This includes a $2 billion investment in Lien Chu port in Danang, Vietnam, alongside Vietnam Maritime Corporation.

“Adani has also talked about exploring opportunities elsewhere in the Middle East, Southeast Asia including Vietnam and Cambodia, East Africa, Bangladesh, Sri Lanka, the Maldives – basically across the Indian ocean with other regions trading with India,” Drewry said in the webinar.

Wealth Fund Exclusion

A setback emerged in May this year, when APSEZ was excluded from the Norwegian government’s pension fund over ethical concerns, along with two other firms. Norges Bank, which manages the sovereign wealth fund, said it was making the exclusion due to an “unacceptable risk that the company contributes to serious violations of individuals’ rights in situations of war or conflict.”

APSEZ had been on the central bank’s watch list for potential exclusion from investment since March 2022, owing to a reported business association with the armed forces in Myanmar. Adani’s investment in its neighbouring country has now been abandoned.

Nevertheless, Adani says its ports and logistics operation is seeing “continued growth across our operations.” Announcing half year results at the end of October, APSEZ director and CEO Ashwani Gupta said the company handled 220 million Metric Tons (MMT) of cargo volume in H1 FY25 (up 9% Year-on-Year). This growth, he said, was primarily driven by containers, which were up 19% YoY.

Operating revenue grew by 13% YoY to $1.76 billion. Ports revenue increased by 11% YoY to $1.55 billion, while logistics revenue rose by 17% YoY to $139.5 million. EBITDA (excluding forex) increased by 21% YoY to $1.11 billion.

Operational highlights saw Mundra Port in Gujarat handle more than 100 MMT in 181 days, while Vizhinjam port in Thiruvananthapuram docked the largest cargo ship ever to call South Asia, the MSC Claude Girardet.

“During the quarter, we also diversified our marine fleet, adding 26 offshore support vessels,” added Gupta. “Our logistics business too achieved robust growth, enhancing last-mile connectivity through expansions in rakes (couple trains), warehousing, Multi Modal Logistics Parks and agri-silos.

“Mundra Port’s milestone of crossing 100 MMT in 181 days and our cargo volume trajectory reaffirm our confidence in delivering our FY25 cargo guidance and hitting the upper end of our EBITDA guidance for the year.”