Speech of Mr. Gautam Adani, Chairman
At the 10th Annual General Meeting of
Mundra Port and Special Economic Zone Limited
31st August, 2009
Mundra Port and Special Economic Zone Limited
It is with a great sense of pride and satisfaction that I welcome you to the 10TH
Annual General Meeting of your company. This is the second general meeting after
the company was listed.
I have great pleasure and take it as my privilege in sharing with you the highlights of
another year of achievements and various initiatives. While doing this, I am also
grateful for your unstinting support and confidence in us.
We have been continuously identifying new opportunities by taking calculated risks
to achieve fast growth, persevering to attain the vision, investing and believing in
people, and adapting to the changing business environment.
During the year 2008-09, there has been a dip in the growth rate of GDP from an
average of over 9 per cent in the previous fiscal years to 6.7 per cent. It has affected
the pace of job creation in certain sectors of the economy and the investment
sentiments of the business community. It has also resulted in considerably lower
revenue growth for the Government. Another feature of the year 2008-09 was a
sharp rise in the wholesale price index to nearly 13% in August, 2008 and an equally
sharp fall close to 0% in March, 2009. The principal growth driver in this period has
been private investment, which has been predominantly funded by domestic
The economic conditions in the advanced economies may continue to be
recessionary in the first half of 2009, but growth might re-surface in the third quarter
of the calendar year. The Indian economy is expected to show fairly strong recovery
in growth in the second half of the year. Growth rate projected around 7.5% in 2009-
That despite these adverse factors enveloping the business environment, India
continues to grow is a validation of the inherent fundamental strengths of our
economy. This augurs well for your Company as it has structured its businesses to
align with India’s focus on infrastructure sector
I shall now discuss about the growth and business prospects of each of these high
growth potential businesses of your company.
The company has grown over the years and achieved several milestones. One of the
prestigious awards your company was given this year was the “Private Port of the
Year” awarded at the Samudra Manthan Awards 2009, organized by India Trade
Promotion Organization an Govt. of India initiative.
Now let me share with you, the company’s performance
I had indicated last year that we are committed to creating consistent, sustainable
and long term value for all our stake holders and that we are driven by our strong
fundamental values viz., trust, courage and innovation. I am happy to inform you that
these values and your company’s strategic business initiatives and robust business
model have delivered a healthy performance.
The year 2008-09 has set new records for turnover, net profits, earnings per share
and in terms of cargo volumes and vessels handled. Our performance on every
parameter reflects significant improvement.
We have recorded the following growth:
Highest ever cargo volume handled 35.72 million tons an increase of 24% over the
Highest ever vessels handled 2171, an increase of 34% over the previous year.
Turnover of Rs. 1135.12 crores, an increase of 39% over the previous year.
Highest ever profit after tax of Rs. 461.09 crores an increase of 116% over the
Highest ever earnings per share of Rs. 11.51 an increase of 102% over the previous
Total number of rakes handled was about 4500.
Mundra port is the only port to have a 40 km waterfront in India. The master plan for
complete development of the entire waterfront has been drawn and the business
proposition for adding new capacities looked upon. The environmental clearances
have been received. Plans are on for expansion of bunker terminal, edible oil
terminal, warehouses, two berths for dry cargo, coal terminal at west port & doubling
the rail line between Adipur and Mundra which will enhance the carrying capacity
and resultant increased business.
The development of multi product SEZ over an area of 130 sq. km is on stream.
Your Company’s SEZ, which is largest notified multi-product SEZ would offer world-
class infrastructure for those who want to establish an industry in this SEZ. In fact
some units in the Textile Park have started production and exports
The logistics business set up last year is picking up. With the economic downturn,
the business is going through tough times. However the investments and the
facilities set up do augur well for the future with end-to-end cargo movement
solutions being offered.
We have continued to be among the top 10 ports in India, the ranking expected to
improve year on year.
Let me turn to the sector review and the economic scenario
India and for that matter the world has faced tough challenges in 2008-09. However,
the strategy laid down by your company has helped it in not only take big strides
forward but also set up the stage for the future to take care of any further such
turbulences in the markets and economies though due to the downturn, in some
areas like SEZ and logistics, the company also went through the same sentiments.
The total cargo handled in the Indian ports by both the 12 major ports and the non-
major ports, during the year increased from 720 million tonnes to 740 million tonnes,
an increase of 3%. Mundra port has on the other hand handled a total of 36 million
tonnes which has grown by 24% over the previous year. This is a significant
There is indeed a significant growth potential for the port sector with the government
estimates showing that the port capacity needs to be 1500 million tones by 2012,
which is double the capacity handled last year. The development of greenfield ports
and expansion of existing ports has its own challenges and hence the gap can be
bridged only over a period of time. Given this position, the business potential is huge
for many years to come. The private public partnership model being followed by the
government for development of various ports has started to yield results with more
and more competitive bidding being done. Your company also has won a bid for
Mormugao port which I shall refer to later.
The challenges of road and rail connectivity to major ports continue. However as you
are aware, Mundra port has its own 64 km railway line to Adipur. This line has been
extended to the west port too. The line is being doubled which would further increase
the cargo handling capacity.
The Special Economic Zones (SEZs) policy supported by SEZ Act 2005 and SEZ
Rules 2006 intends to make SEZs an engine for economic growth supported by
quality infrastructure complemented by an attractive fiscal package, both at the
centre and the state level, with the single window clearance mechanism. The SEZs
have become an important component in the export-led industrialisation strategy,
playing a crucial role in promoting the manufacturing sector, including enabling
investment climate for SMEs and offer platform for attracting export-oriented FDI.
In short span of about three years since SEZs Act and rules were notified in
February, 2006, formal approvals have been granted for setting up of 568 SEZs out
of which 315 have been notified. Special economic zones have provided
employment to 3.87 lakh persons on the whole. The real growth comes from the fact
that SEZs generate demand for complementary services and goods and thus impact
on other sectors through linkages and creation of ancillary industries and
infrastructure. Mundra port and SEZ is probably one of the best multi products SEZ,
which, with the investment opportunity available is best poised for a quantum leap as
soon as the economy improves.
I am glad to mention that your company has the wherewithal to withstand the rigors
of economy and competition due to the strengths it has.
The company’s mechanization drive has indeed allowed it to increase the throughput
in fertilizer and coal cargo. These terminals were not only fully operational this year
but also have helped in enhancing the cargo handled.
The Ro-Ro pontoon terminal with linking bridge commenced operations for export of
cars and your company is the only one having a fully dedicated car terminal in South
Asia. This would enable the export of cars to increase even further
The LNG terminal facility for which we had signed the memorandum of
understanding is in an advanced stage of final documentation and preliminary work
for soil testing and engineering has started.
Without making it look like a futuristic statement, I would like to mention that your
company is optimistic about sustaining the pace.
Your company has moved further on the goal of having a Pan -India presence by
winning the bid for developing the coal terminal at Mormugao Port. This will enhance
the cargo handling capacity by 6.5 million tones per annum.
The Dahej port is progressing as envisaged and will be operational in the next year.
With this, our presence across the western coasts will be significant.
The mega power plants of Tata’s and Adani’s are making good progress. The
development of the west port is as per schedule. It is the world’s largest coal
handling terminal, and would handle 50 million tonnes of coal for these two power
units as well as for others. It is expected to be fully operational in less than a year’s
time. All this would help us to handle 100 tonnes by 2012-13. We have plans to ramp
it up to 200 million tonnes by 2020 and become the largest port in India
Your company has sustained its growth while accelerating its businesses in various
areas. Investments in technology and creation of additional state-of-the-art facilities
have acted as growth engines.
We believe that growth is possible only with the best practices and hence we stress
on good Corporate Governance
Good governance practices stem from the culture and mindset of the organization.
Your Company’s commitment to strong values and business ethics, coupled with its
article of faith to augment the overall interest of the shareholder, is at the core of our
Corporate Governance Policy. The Company believes that good governance is not
just rule-driven, but involves voluntary adoption of best practices. This is ensured
through compliance of all statutory and regulatory requirements, transparency in
corporate disclosures, high quality of accounting practices and adhering to the best
level of business ethics.
We wish to make a small contribution to the overall development of the society
through our Corporate Social Responsibility tasks
Your company is driven by the core belief that the pursuit of shareholder value
creation and contribution to enhancing social capital can be achieved
simultaneously. Your company believes that there is no inherent contradiction
between improving competitive ability and making a sincere commitment to bettering
society, that the uniqueness of strategy lies in conceiving such integrated business
models, that, linking business purpose with a larger societal purpose serves to
create a multi-dimensional organization.
Through Adani Foundation, which works on the core sectors of Education, health
and rural development, we had set up “Adani Vidya Mandir” last year. Our initiatives
stretched to setting up of Gujarat Adani Institute of Medical Sciences (GAIMS) a
public private partnership project which has received the approval of the Central
Govt. for setting up a Medical College affiliated with the Kachh University in
association with state owned G. K. General Hospital, Bhuj. The medical college has
started functioning and will be taking about 150 students, the very first year. We
have also set up Adani Institute of Infrastructure Management for imparting one year
full time residential post graduation programme in Infrastructure Management from
academic year 2009-10.
We also continue to minimize any impact on the environment and are working with
our colleagues to create a greener organisation and community. Our initiative
towards making this impact was rewarded when Mundra Port was ranked 16th Green
Port among the World’s greenest Ports at the C-40 World Port meet and the
Company now looks forward to be in the First Five Green Ports in the World in the
coming 5 years.
In the end, as I sit to list who all need to be thanked for making this organization
what it is today and what it would be tomorrow, I feel that I need to thank one and all:
the employees who have untiringly worked to achieve every milestone, in whom the
company has invested money and who have returned the trust and confidence
reposed in them through their hard work and dedication; the esteemed board
members who have helped me in shaping the strategies; the customers, the
vendors, the business associates who have supported the company; the various
financial institutions and bankers, the Government of India, the Government of
Gujarat, the Gujarat Maritime Board, the regulatory authorities for their continued
support and last but not the least you, the shareholders, investors and partners in the
growth of the company for your continued confidence and trust in the management.
Thank you again,
Gautam S.Adani August 31, 2009