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Concor place single largest order for 10,000 containers on Bhavnagar-based new entrant APPL Containers

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NEW DELHI : Container Corporation of India Ltd (Concor) has placed an order for 10,000 containers on APPL Containers Pvt Ltd for Rs 477 crore, the first contract for the newly opened Bhavnagar-based box manufacturer and the single largest order given to a local firm by the rail hauler, as India looks to make headway in a business dominated by China.

APPL Containers emerged the lowest bidder on a tender floated by Concor by placing a price quotation of Rs 4.77 lakh per container, multiple sources, including a Concor official, said.

Prime Minister Shri Narendra Modi is likely to inaugurate the container manufacturing unit of APPL Containers in September, a government source said.

Bhavnagar, the district headquarters for Alang-Sosiya, home to the world’s longest stretch of ship breaking beaches, has been picked as a hub for container manufacturing with another entity – S M Containers – also setting up a unit in the area.

A team from Concor headed by Chairman and Managing Director, V Kalyana Rama, visited the two container manufacturing units in Bhavnagar on Monday and pledged support to the container manufacturing industry.

The team also included Executive Director Mr. Santosh Singh, Executive Director Mr. G Ravikumar, Ahmedabad Cluster’s Mr. A K Singh, Bhavnagar Railway Divisional Manager Mr. Manoj Goyal and Mr. Rahul Modi, Member of the National Shipping Board.

Concor owns 23,510 containers. By acquiring new containers, the company is replacing old containers, which have either outlived their life or are beyond repair.

The estimated annual requirement of 20 feet/22 feet containers for 5 years till 2026 is on an average 8,000 containers per annum. The requirement is based on projected business growth, which will be suitably calibrated depending on the actual annual demand, according to Concor.

Under the ambit of Make-in-India and Atma Nirbhar Bharat initiatives, Concor has placed container orders for 1,000 containers each on Bharat Heavy Electricals Ltd and Braithwaite & Co Ltd, 2,500 containers on Mazagon Dock Shipbuilders Ltd and another 3,500 containers on four indigenous suppliers based in Southern India.

“There are certain geopolitical issues; we can’t procure our containers from China. So, we are developing the container industry in India. Concor is doing that and there are good headwinds in that,” Mr. Kalyana Rama told analysts during the earnings call on 5 August.

Concor, he said, is seeing huge demand from the trade for containers to export rice to Iran, Central Asian countries, and Bangladesh.

“We are rationing that (containers) because we have got our own equipment problem. We have got containers, but the domestic growth is very high at about 35 percent. We don’t want to waste our equipment in these two areas because containers can be quickly turned around in the domestic sector and are a better paying proposition for us. So, we are working on procuring more containers,” he stated.

Mr. Kalyana Ram, CMD, Concor said that procuring containers would be a challenge unless the container industry is developed in India.

“That process is on, and it will take some time. Once we get that (containers), we get into these segments. We will have more exports to Bangladesh, Iran, and Central Asian countries, and also from point-to-point destinations. So, wherever the opportunity comes, we will be doing those things,” he said.

Concor will start getting containers manufactured locally from October. It plans to utilise the containers for short sea transport in the export-import sector and on a point-to-point basis.

“We did it successfully last year by sending rice to Iran with good margins. And we could get all the containers back. So, it is a successful trade. We would like to go look at this in future and for that we need containers,” Kalyana Rama added.

India has been eyeing manufacturing of cargo containers, a segment dominated by China, as part of the Atmanirbhar Bharat initiative, to create an import substitute for new shipping containers and assist in the security of supply chains for exports.

China makes about 90% of global shipping containers. CIMC is the world’s largest container manufacturer with a market share of 40%. Other players include Singamas, COSCO and CXIC.

India will require approximately 60,000 new containers between now and 2026, an annual addition of about 10,000 TEUs per year, according to the government.

The global container fleet is handled by container leasing companies and shipping lines.

Triton is the world’s largest container leasing company with a market share of 14%, owning over 6 million twenty-foot equivalent units.

In 2020, the then Union Minister of Ports, Shipping and Waterways, Shri Mansukh Mandaviya had initiated plans to make shipping containers in India to facilitate easy availability of the steel boxes for export-import and domestic trade. Mandaviya, a Rajya Sabha member from Gujarat, hails from Bhavnagar.

The move was triggered by an acute shortage of boxes in 2020 following the pandemic induced supply chain disruptions that hurt India’s exporters, leading to demands for making the steel boxes locally.

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