Gujarat Ports

Gulf of Kachchh

Mundra Okha Bedi Positra Sikka

MUNDRA Kandla

Dholera Bhavnagar Porbandar Veraval Dahej

Mithivirdi

Minor/Intermediate Ports Major Port

Magdalla Hazira Pipavav Vansiborsi MulDwarka Jafrabad Simar

Gulf of Khambhat

Maroli

heart beat of Gujarat Export

PORT OFFICE:
P.O. Number1, Mundra 370 421, Kutch Tel:- +91- 2838-288201-8, Fax: +91-2838-288220/240

A FIRST CHOICE OF WHEAT EXPORTER

A lifetime logistic solution.

Port office: P.O.number 1,Mundra 370 421,kutch Tel: +91-2838-288201-8, Fax: +91-2838-288220 /240.

 HIGHEST LIQUIDITY STORAGE CLEANING AND SORTING FACILITY MOBILE HARBOUR CRANES HIGHEST DRAFTS

Acknowledgement

Ships are safer in harbor, but they are not meant for that purpose. This is a universal fact and derives home the importance of practical training essential in each and every facet of life. Summer training is also a part of practical training where we can put concepts into action.

We would like to take this opportunity to express our gratitude to M/S. Adani Port Ltd., whose unrivaled success in the field of Business is now by word.

Words are insufficient to express our gratitude towards Mr. Sudhir Nair, Mr. Anil Nair and Mr. Sumeet Agarwal for their immense help and invaluable guidance in conduction of this study from its conception to its completion.

We are also in great Debt of Mr. P.R. Jhala for his guidance and help. Special thanks to Mr.Ketan Doshi, Mr. Parag Chhaya,, Mr. Kinnar Dixit and the whole staff of adani port limited who have been very cooperative to us during our visit to the Mundra port.

PREFACE
INDIA is an agricultural country. Past records of the country shows an increasing trend in agricultural production. The agriculture and food-grain exports show a systematic increase in the yester years and the trend analysis shows a bright future for India in international food-grain market especially for wheat. The record rainfall continuing this year is really a great blessing over the nature to the wheat crops and the country is expecting a bumper harvesting in this year. At the same time wheat production in some other countries shows a decreasing tendency. This again strengthens the presence of India in international wheat market.

Transportation through sea is the cheapest among other modes. To add as a catalyst, India is blessed with 5560 km coastal boarder and 12 major and 180 intermediate and minor ports. India Sea Ports are playing a competent role in export of wheat. The contribution of these ports in wheat export is given in the report.

The project is an effect of bringing up Mundra Port- a new generation privately owned minor port of Gujarat as a facilitator for wheat exports with the help of four Ps of Marketing (Product {service}, Place, Price, Promotion) and to establish a Brand Image of Mundra Port as A Port of Choice for Wheat Exporters.

CONTENTS
1) WHEAT EXPORT STUDY a) Wheat - An Introduction b) World food grain scenario c) Indias food grain scenario d) Indias wheat production scenario e) Export scenario f) Indian ports g) Gujarat ports h) 4 Ps of Marketing Service Place Price Promotion 2) PORT COMPARISION STUDY a) Marine b) Civil c) Operations d) Distance e) Traffic study 3) CONCLUSION 81 83 85 88 35 52 61 71 01 02 09 12 18 25 28

85

4) SUGGESTIONS

EXECUTIVE SUMMARY
RATIONALE FOR THE STUDY INDIA is an agricultural country. Indias climatic condition and geographical position is suitable for agricultural. The main revenue earners in Indias exports are agricultural product India has attained a record cultivation of food grain especially wheat: this surplus quantity of wheat was exported to various country. The trend continues this year also. Wheat production is some other countries has shown decreasing trend. The production ratio shows an upward trend in India. This growth trend leads in to the front line of wheat exporting countries. Moreover the wheat consumption ratio is increasing in the world. This proves the increase in wheat export form India. The entire quantity of wheat export to other countries moves through sea. Considering the large volume and other logistical parameters the mode of transportation through sea is economical. Here comes the role of Indian ports. India is blessed with 5560 km coastal border and 12 major and 180 intermediate and minor ports. Comparing to other ports, major parts of wheat are being exported through ports of Gujarat. The hinterland approaches to the north central and western parts of India, which are the major wheat producing states, boost the wheat export through Gujarat ports. There are one major port and 11 intermediate and 29 minor ports along 1600 km of coastal belt of Gujarat. Mundra port is considered here for the case study.

The case study is divided in to 3 phases. First phase includes the study of agricultural market and wheat export in particular. Second phase focuses on Mundra ports position Vis a Vis other ports of India for wheat exports. Third end concluding phase includes formulation of marketing strategy to develop Mundra port as first choice for wheat exporters by using marketing mix tools 4 Ps. i.e. PRODUCT, PLACE, PRICE PROMOTION.

PRODUCT:
Port is a service provider and hence product is the services offered by that port. We critically examine what benefits a customer accrues over its competing services. Also we look at satisfaction / delight co efficient that Mundra port offers to its customers and how factors like draft, present facilities, storage and back up facilities, and possibilities of expansion etc. contribute to the quality of services offered.

PLACE:
Place is the other important tool of marketing. Place plays a distinctive role in the 4P`s. hinterland connectivity is an important factor. Where the port is placed determines the cargo movement to and from the port. This ensures how the port is placed as an economical logistic solution for the exporter to export their wheat through the port. There are many other factors like geographical positioning etc. as discussed in this segment.

PRICE:

The segment price decides how the service provided to the user is priced. Which are the areas where the port can provide value addition to the services and what are the ways by which it can make its service priced competitively by providing appropriate end-to-end solutions at an attractive price thus ensuring value maximization to the customer.

PROMOTION:
Promotion is an important aspect of Marketing Mix. Without proper and accurate promotions the port cannot make awareness of its services among the exporters. The success of a port depends how the port is being promoted and projected in the market by focusing the target customers. In promotion, the study includes the selection of media for effective promotions. This section shows the effective promotional strategies and selection of medias.

BACKGROUND: MUNDRA PORT (GUAJRAT ADANI PORT LTD.)

Adani Port Ltd. representing Adani group and GPIDCL representing Government of Gujarat jointly promotes Mundra Port. Adani Group, an Indian conglomerate based at Ahmedabad having interest in international trading, infrastructure, FMCG, retail industry and other niche services. The group is worth Rs.3500 crores with Flagship Company Adani Export Ltd., which is a Golden Super Star Trading House and is a largest Forex earner in India in private sector. Mundra Port is located just 60 kms away form Kandla Port on west coast of India, Kutch region in the state of Gujarat. This is one of the private owned port in the

western coast of India. As this port is a new corner and is being backed by a cash rich company, there is vast scope of development in the infrastructure. Moreover the geographical positions and other natural blessing give the port a lot of scope for expansion. The port already handles multiple products, but on focusing the future scope of wheat export it requires an adequate strategy to project it as the First choice of an exporter for exporting his wheat.

OBJECTIVES OF THE STUDY The objectives of the study are as follows: The study will cover agri export scenario of India focusing on wheat. To find out Mundra Ports current status viz a viz other ports of India on wheat export. To position Mundra port as a facilitator for wheat exports by formulating a market strategy with the help of the marketing tools 4Ps i.e. Product, Place, price & Promotion.

RESEARCH METHODOLOGY Research will be more descriptive. The data will be collected to achieve abovementioned objective. The collected data will be the stepping-stone towards achieving the final objective of the study. This data will b collected as: 1) Primary Data:

 Personal interview with Head of Agri Product exporters especially of Adani Exports Ltd. as well as with Head of Adani port Ltd. at Mundra. Brain storming section. Discussions etc. 2) Secondary Data: Published materials Journals Company profiles Internet search

EXPECTED CONTRIBUTION FROM THE STUDY The implications of the study are as follows: Enhancement of a port using 4Ps of Marketing. Understanding of logistics and its relevance to exports of agri products. Future projection for Mundra Port.

WHEAT It is believed that wheat developed from a type of wild grass native to the arid lands of Asia Minor. Cultivation of wheat is thought to have originated in the Euphrates Valley as early as 10,000 B.C., making it one of the world's oldest cereal crops. In the Mediterranean region, centuries before recorded history, wheat was an important food. Wheat played such a dominant

role in the Roman Empire that at the time it often was referred to as a "Wheat Empire." Wheat, which can be produced in a wide range of climates and soil conditions, grows in areas as far north as the Arctic Circle and as far south as the equator. The production of wheat is so widespread that it is being harvested somewhere in the world in any given month. But wheat grows best in regions having temperate climates with rainfall between 12 and 36 inches per year. The United States ranks fourth in world wheat production, following: 1) China; 2) the Commonwealth of Independent States; and 3) the European Community (whose major producers are France, the United Kingdom and Germany). Wheat is the dominant grain of world commerce. It is easily transported and stored and it is used to produce a large variety of foods that include many kinds and types of breads, cakes, noodles, crackers, breakfast foods, biscuits, cookies, and confectionary items. Wheat is the staple food of millions of people. It is also an important part of the daily diet of many millions more. Only rice challenges wheat for the title of most important food grain in the world.

 WORLD FOOD GRAIN SCENARIO: Food grain consumption is likely to keep pace with population growth and feed use is expected to show an increase of around 1.6%, mainly on expectation of a strong production rebound in several developed countries. Food grain production may also raise somewhat in Europe as a result of an increase in spring grain sowings in some Eastern Countries, to offset the winter crop losses. Elsewhere, in Asia, Africa and Central America the grain output was relatively unchanged in 2003. Wheat is

expected to account for the largest share of the overall decline during the current season, although inventories of rice will also decline significantly. World cereal utilization in 2003/04 is forecast to reach 1964 million tons, up 0.4 percent from the previous year, yet still nearly 1 percent below the medium-term trend. At this level, per caput food-use of cereals would remain steady at around 166 kilograms in the developing countries and 133 kilograms in the developed countries. The fastest growing grain import market in the world today is North Africa and the Middle East. According to the International Grains Council, smaller harvests are expected in China, the United States and Australia. Crop estimates were

lowered in parts of Europe and the CIS, with Ukraine set to become a net importer. EU markets remained quite steady. World Food Grain Supply & Demand: 02/03 945 1284 137 Qty. in Million Tons 03/04 est. 949 1215 133 1001 214 04/05 proj. 990 1205 128 1012 193

Food Grain Production Supply Trade

Consumption 1010 Stocks 274

World Food Grain Supply & Demand

Qty in Million Tonnes

1400 1200 1000 800 600 400 200 0 02/'03 03/'04 esti. 04/'05 proj. Year
Production Supply Trade Consumption

While production and use of grains in 2004 / 05 are expected to be closely balanced and supplies in the main exporters should be larger than last year. Import demand will be little changed. Production in 2004/05 is forecast at 990 Million Tons. World food grains consumption in 2004/ 05 is now put at 1012 Million Tons. Expected trade in 2004 / 05 is at 128 Million Tones. WHEAT SCENARIO: The recent years have seen major changes in the global wheat scenario. Major exporters like USA, Canada, the EU and Australia have cut down their exports while minor exporters like Russia, Ukraine and the Eastern Europe have increased theirs. In China, despite official efforts to stimulate grain production,

some farmers switched from wheat to cotton, and output may be down. Countries like India and Pakistan, which were major importers earlier, have turned around and are now making their presence felt in the export market. India has made a remarkable breakthrough in developing the highest yielding wheat variety in the world. Major Producers China European Union India United States Major Consumers China European Union India Russia Major Importers European Union Brazil Egypt Iran Japan Algeria Indonesia South Korea

Russian Federation Eastern Europe Eastern Europe Australia Canada PRODUCTION: Pakistan Turkey Iran

United States Department of Agriculture (USDA) in its report on World wheat situation and outlook forecast global wheat consumption up by 8 million tons (1.3 %) at 594.859 million

tons. Global wheat production in 2004 is forecast at 601 million tonnes. According to the International Grains Council, smaller harvests are expected in China, the United States and Australia. Compared with last year, output is expected to increase significantly in Europe and slightly in Asia, more than offsetting likely reductions in all other regions, the most noteworthy being in North America and in Oceania. World Wheat Supply & Demand: Qty. in Million Tons 00/01 582 102 01/02 582 107 587 194 02/03 566 103 603 156 03/04 550 109 588 129 04/05 estimated 589 102 594 123

Wheat Production Trade

Consumption 586 Stocks 200

World Wheat Supply & Demand

Qty in Million Tonnes

700 600 500 400 300 200 100 0 00/01 01/02 02/03 Year 03/'04 04/'05

Global production of wheat has been growing at a low 0.53 per cent per annum between 1991-92 and 2002-03. Recent years have seen a downswing, since a high 1997-98 level. This has been caused mainly by the decline in North Americas production. Of this, the US, which is the third highest producer in the world, has registered decreases since 1998-99, making its share in world total drop from 11.78 per cent in 1998-99 to 9.2 per cent in 2001-02. China, the highest producer in the world, has tended to produce gradually less every year since 1997-98, with its world share dropping from 20.24 per cent to 16.23 per cent between 1997-98 and 2001-02. Global wheat production in 2003 was a Half of the increase this year is in Europe where winter wheat areas increased in several countries and crops are in good condition.. However, production in the US could be down by 2 mts to 62 mts following smaller than expected winter wheat sowings and dry conditions in western plains.

Production

Trade

Consumption

Stocks

 Forecast yields in Canada, Australia and China are trimmed because of insufficient rain in same area. Ukraine and possibly also Russia will need to import wheat. With supplies from the CIS and India, aggregate shipment by the five major will raise considerably from last years unusually low level. The worlds second highest producer, India, has shown increases in its production between 1997-98 and 2000-01, its share in the world total also steadily increasing from 11.38 per cent to 13.09 per cent. GLOBAL OUTLOOK: Wheat Production 2002/03 2003/04

Trade Stocks Prices CONSUMPTION & IMPORT: World wheat consumption is expected to expand slowly in 2003-04, still, it's forecast to remain significantly larger than production, reducing global ending stocks by 17 million tons over the course of the year, to 111 million tons. When the production ratio taken in to consideration, India stands fourth in the position in 2001 2002. In 2002 2003 Indias stand was second in the world wheat production. As far as the consumption concerns, China is the largest consumer of wheat, and then comes European Union, FSU etc. As far as country wise imports concerns, European Union, US, Brazil, Iran, Indonesia etc shows an increase in imports. Import of India reduces very drastically. This indication shows the position of India in world wheat market. The decline in wheat use is expected to be most pronounced in Europe, especially in the EU and Ukraine. By contrast, global use of cereals for direct Stable up down - not available. These signs refer only to

the direction of change from the previous season

human consumption is likely to keep pace with population growth and reach 990 million tones. INDIA FOOD GRAIN SCENARIO: India is the second most populous country in the world and third largest economy in Asia. Since its independence 50 years ago, India has followed a policy of self-sufficiency in food production. This is likely to change in the future due to economic growth, population growth, and resource constraints. The adoption of market-oriented domestic and trade policies in 1997/98 has led India to an accelerated economic growth. If this growth becomes broad based, it is likely that there will be a significant change in dietary preference. Within cereals, the largest demand increase is for wheat, from 56 MMT in 1993 to 114 MMT in 2015 (a 76 percent increase). Food grain production in India: Quantity in MMT Year 1996 1997 1997 1998 Food-grains 199.40 192.30

1998 1999 1999 2000 2000 2001 2001 2002 2002 2003 2003 2004

203.60 209.80 195.90 212.00 193.70 220.00

Foodgrain production in India

230 220 210
Food-grains

Year

200 190 180 170 160 1997 1998 1998 - 1999 1999-2000 2000 2001 2001 2002 2002 2003 2003 --2004

India has made lot of progress in agriculture since independence in terms of growth in output, yields and area under many crops. It has gone through a green revolution, a white revolution, a yellow revolution and a blue revolution. This green revolution was followed by white, blue and yellow revolution, which changed the agricultural production scenario in India. These

Qty. in MMT

revolutions not only made India self-sufficient in food but also provided assured buffer stock, increased export of various agro products and substantial rise in agro based industries. Today, India is the largest producer of milk, fruits, cashew nuts, coconuts and tea in the world, the second largest producer of wheat, vegetables, sugar and fish and the third largest producer of tobacco and rice. The per capita availability of food-grains has risen in the country from 350 gm in 1951 to about 500 gm per day now despite the increase in population from 350 millions to 1000 millions. At present 40% of the national income of India is derived from agricultural sector. Food-grain Export Scenario: The commerce ministry has identified 10 agricultural products for sustainable export promotion. These are: rice, wheat & wheat products, coarse grains, spices, cashew, oil meals, sugar, horticultural products, floricultural products and processed foods. Food-grain exports: Figure in Lac MT. Commodity Year 2000 2001 2001 2002 2002 2003

Wheat Rice Food grains

14.69 0.18 14.87

27.36 19.49 46.85

53.25 69.35 122.60

WHEAT: Wheat is a staple food in India. Since late sixties, when the green revolution was most effective in raising wheat output, the output ratio of wheat to rice had steadily increased from 1:3 to 4:5. At present, U.P., Punjab, Haryana and M.P. account for the major output of wheat in the country. Improving irrigation facilities and developing seeds suitable for cultivation in these regions are also popularizing its output in non-traditional states. PRODUCTION:

 Wheat production scenario in India: Year 1996 1997 1997 1998 1998 1999 1999 2000 2000 2001 2001 2002 2002 2003 2003 2004 2004 2005
Wheat Production in India

Wheat 69.40 66.40 71.30 76.40 68.80 71.80 72.00 78.00 89.85

100 90 80 70 60 50 40 30 20 10 0 1996 1997 1997 1998 1998 1999 19992000 2000 2001 2001 2002 2002 2003

Wheat

Year

2003 -2004

2004 -2005

Qty in MMT.

 State wise Production: Major wheat producing states in India are Uttar Pradesh, Punjab, Haryana, Madhya Pradesh, Rajasthan, and Bihar. India: Major wheat producing states and regions:

 Future production & Trend Analysis: India has become the second largest producer of wheat in the world, though it is only seventh largest in land area. Wheat production has increased from about 6 million tonnes in the early 1950s to 70 million tonnes in the late 1990s. The increase is driven principally by yield growth but also by a shift in production from other crops to wheat and an increase in cropping intensity. The steady increase in the procurement price for wheat may also explain part of this growth. The area base is narrower compared to rice, and two-thirds of the wheat is produced in the northern states of U.P., Punjab and Haryana. The productivity of wheat in the country is expected to increase by at least 15 to 20 per cent due to the increase in variety of wheat. The analysis indicates that the wheat demand may grow fairly rapidly with population and income growth, and faster than for other cereals. All India wheat production- Trend Analysis: Year 1994 1995 1995 1996 1996 1997 Production in Million Tones 65.77 62.10 69.35

1997 1998 1998 1099 1999 2000 2000 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010

66.40 71.30 76.40 68.80 71.80 72.00 76.00 80.00 84.00 88.00 92.00 96.00 100.00

Wheat production trend analysis - INDIA

Production (Million Tonnes)

120

100

80 Qty. in MMT

60

40

20

0
1994 95 1995 96 1996 97 1997 98 1998 99 1999 - '00 2000 - '01 2001 - '02 2002 - '03 2003 - '04 2004 - '05 2005 - '06 2006 - '07 2007 - '08 2008 - '09 2009 - '10

Year

 Role of M/s. Food Corporation of India in wheat procurement, storage & Export: The Food Corporation of India was setup under the Food Corporations Act 1964. To provide an effective food security

system in the country, the FCI, through a series of operations, simultaneously provides market and price assurance for the surplus food-grains, giving impetus to sustain higher yields in a post-green revolution era. Mode of Procurement: The Govt. of India procures wheat from the farmers at minimum support prices, which is aimed at protecting the domestic growers in adverse conditions. The Food Corporation of India takes up the responsibility of distributing the wheat stocks from the Central Pool through State Owned Food Agencies. The wheat stocks distributed through the channels like Public Distribution system, Open Market Sale Schemes. According to the new policy State Trading Enterprises can directly procure the wheat from the farmers that is Mandee. Due to change in government the policy is still not clear. Wheat, paddy, and coarse grains are procured in Purchase Centers opened in Surplus States by FCI/State Agencies.

Quantities procured by the State Govts. Agencies are taken over by FCI on payment of incidental charges etc. Procurement of Wheat (Central Pool Account): Marketing Year 1994 1995 1995 1996 1996 1997 1997 1998 1998 1999 1999 2000 2000 2001 2001 2002 2002 2003 2003 2004 Figures in Lac Tones Quantity 119 123 82 93 126 141 163 206 190 158
Wheat procurement by FCI
1994 95

250 200
Qty in Lac MT.

1995 96 1996 97 1997 98 1998 99 1999 2000 2000 2001

150 100 50 0
Quantity

2001 2002

Marketing Year
2002 2003

2003 -- 2004

 State-wise Procurement of wheat for Central Pool: Marketing Season (April March) in lakh tones State Haryan a M.P. Punjab 96 97 20.22 0.04 56.42 97 98 22.90 1.07 59.61 98 99 31.58 5.30 61.46 99 00 38.70 5.42 78.32 00 01 44.98 3.50 94.24 01 02 64.07 2.94 105.60 02 03 72.80 Qty

2.20 111.1 0 8.40

Rajasth an U.P. Others All India

2.29 2.61 0.00 81.58

3.20 6.18 0.02 92.98

6.67 21.41 0.11 126.5 3

6.37 12.61 0.02

5.39 15.45 0.00

6.76 24.38 2.47

34.50 3.20 232.2 0

141.44 163.56 206.22

After fulfilling the domestic requirement of wheat through PDS (Public Distribution System) the surplus quantity of wheat, FCI

allows the wheat exporters to procure from their regional stock points nearer to the port of export.

 EXPORT SCENARIO: Wheat exports from India registered a remarkable growth in the current year. Quantum-wise exports of wheat from India have been impressive as compared with the quantum shipped during the previous year. Concerned over surging wheat exports from India, United States Department of Agriculture (USDA) in the month of June 2002 came out with a report saying India is pushing its wheat into US markets. In the current year, Indian wheat found itself the markets in many South East Asian and Middle Eastern markets. In wheat, new estimates for 2003-04 show an increased shortfall in world production compared with use, but much of the fall in stocks will be in China. Supplies in major exporters should be adequate to meet a subdued level of world import demand, even though exports from the CIS and India will be much less than in 2002-03. Exports of wheat taken place to as many as 20 countries including Russia, Egypt, Taiwan, Thailand, Malaysia,

Philippines, Singapore, Korea, Indonesia, Bangladesh, Sri Lanka, Sudan, Vietnam, Yemen, UAE, Kuwait, Oman and Qatar.

Year 1990 91 1991 92 1992 93 1993 94 1994 95 1995 96 1996 97 1997 98 1998 99 1999 2000 2000 2001 2001 2002 2002 2003 from India

Quantity in Lakh Tones 1.40 6.60 0.038 0.004 0.092 10.92 18.48 0.002 0.00 0.20 14.69 27.36 53.25

Y ea r wi se wh eat ex po rt

Year-wise export of wheat from India Qty. in Lakh Tonnes

60 50 40 30 20 10 0
1990 91 1991 92 1992 93 1993 94 1994 95 1995 96 1996 97 1997 98 1998 99 1999 2000 2000 2001 2001 2002 2002 2003

Year

Quantity in Lakh Tonnes

 Process of Wheat Exports p Arrival by road or by Railway Rake Ship Loader Export Conveyor Storage Vibrating Screen Vessel being Loaded Vibro Feeder Bleeding system Cleansing System

Aspiration

 Contribution of Major Wheat Exporters: Below chart shows the contribution of major wheat exporters. Shipper Cargill Toepfer 0.29 Kandl Mundr Kakinad a a 0.56 0.90 a Vizag 5.94 1.37 Quantity in Lakh MT. Tuticori n Total 6.50 2.56

Adani Sara Intl. Concordia Louis Dreyfus Vaas Exports MMTC PEC Allana Starcom Viknivas Agrocrop Kotak Emmsons NFM KBRL 0.27 0.26 0.25 0.11 0.53 0.47 0.30 2.12 1.59 1.47

1.91

1.91 2.12 0.42 2.01 1.82

0.35

1.07 0.13 0.46 0.22

1.07 0.81 0.53 0.47

0.14 0.31 0.29

0.44 0.31 0.29 0.27 0.26 0.25 0.11

 Scope of India In International wheat market: Wheat Trade forecasts of major exporters - USDA Report highlights; Global wheat production in 2004 is forecast at 601 million tonnes. According to the International Grains Council, smaller harvests are expected in China, the United States and Australia. Areas in the EU-25 are up from last year, and soil moisture is generally adequate for crop development. Sowings in Ukraine were below target, but weather conditions there, and in Russia, have been favourable, according to the IGC. Parts of the US winter wheat area remain unfavourably dry, and spring wheat plantings may be reduced because of the high returns from oilseeds. In Canada soils are rather dry but the crop should approach last years with adequate rains. In China, despite official efforts to stimulate grain production, some farmers switched from wheat to cotton, and output may be down. Meanwhile, IGC forecasts consumption in 2004-05 at a record 601mn tons, 13 million more than this season. Demand for wheat-based foods continues to grow in many countries in Far East Asia due to population increases, economic growth, and the effects of urbanisation. In China, however, demand will contract as diets become more varied. Better supplies of rice and coarse grains in India may

keep wheat consumption below recent exceptional levels. In Sub-Saharan Africa, higher import prices and increased freight costs will slow consumption of wheat products. If global supplies of maize remain tight, wheat use by the feed industries of Europe, the CIS and Far East Asia will increase significantly. World trade in 2004-05 is forecast at 99mn tonnes, unchanged from 2003-04. In China, local market prices suggest tightening supplies, and with another large crop shortfall expected, imports are forecast to rise to 7mn tonnes compared with 2.5mnt. in 2003-04. Brazil is likely to import more wheat, and purchases by Near East Asia and North Africa are forecast above this years very low levels. Imports into Europe and Ukraine will fall after better crops. Export availabilities should be more than sufficient to meet import demand in 2004-05. Carryover stocks in the main exporters at the end of 2004-05 are projected to increase by 10mn. tons to 52mn., the highest since 2002, according to IGC. Stocks should also recover in India and Russia, but China s will fall once again, keeping the world total steady at 128m.tons Significantly lower production among last years top four global exporters is expected to cause their shipments to fall by 10 million tons, which is equivalent to nearly 10% of global trade. However, the EU and non-traditional exporters will partially

mitigate the impact. Meanwhile, exportable supplies from the former Soviet Union, India and Turkey are expected to remain high with forecasts of net exports at 10 million tons greater than that just 2 years ago. USDA Report highlight itself indicates the scope for Indian Wheat in the World Food Grain Market. India has a great exporting scope due to the bumper crop of these years. Export Strategy to strengthen wheat export from India: India has become a major force in the global wheat export markets, and new strategies are designed to expand their position. Though India has stepped up its export pace, it

continues to be plagued by mounting stocks due to rising production and attractive procurement prices that encourages farmers to sell their crops to the government. However, as a part of a new strategy to continue export expansion and surmount some of the problems faced with marketing low quality product, the government plans to implement export promotion policies, supplemental to selling stocks at reduced prices. In addition to counter-trade, long-term credit, and food aid, the government plans to remove export restrictions, establish Agri Export Zones (AEZ) scheme, which seeks to provide end to end development for the export of

products form a geographically contiguous area. The emphasis of the AEZ Scheme is on the market orientation, and to provide proper remunerative returns to farmers on a sustained basis by improved access to exports. With these policies, India has the potential to export even more and gain market share from competitors. In order to comply the increasing demands of wheat in the international market India has to re look to its infrastructure of transportation of the cargo to various destinations. The entire quantity of wheat export to other countries moves through sea. Considering the large volume and other logistical parameters the mode of transportation through sea is economical. Here comes the role of Indian ports.

INDIAN PORTS India, abundant with rich natural resources, has a significant presence in the production of agricultural and industrial goods. Enough care has been taken on the production front; next in the value chain is the movement of the produce from the point of production to various points of consumption. This involves a big journey in the form of

transportation. Making goods available to the consumer at right place, right time and right quality and quantity calls for greater role of logistics roadways, railways, shipping and airways.

Sea route is the most popular and cheaper mode of transport for export / imports of commodities followed by surface and air transportation. India is dependent on its national ports system to ensure sustainable economic growth through expanding export trade and timely availability of imports. India is blessed with 5,560 Kms coastal border and 12 major and 180 intermediate and minor ports.

Port sector Development Transition from fragmented transportation facility to integrated logistics system Better accessibility to hinterland Modernization of port infrastructure Increasing applications of Information technology

Enabling Privatization Operational flexibility Tariff freedom Land allotment for port development Concession on port charges to captive and private jetty Concession on waterfront royalty to private port Permission to sub contract port services Support to develop back up infrastructure

Emphasis on Marketing & Promotion of ports

ROLE OF INDIAN PORTS IN WHEAT EXPORT: Geographically, most of the ports are located in West Coast, mostly in the State of Gujarat and Maharashtra. Rest are scattered over the States of Goa, Karnataka, Kerala, Tamil Nadu, Pondicherry, Andhra Pradesh, Orissa and West Bengal.

Wheat export through Major Ports of India for the period 2000 2003: Port Year Qty in 000 Tonnes 2000 2001 Kolkata Visakhapatnam Tuticorin Mumbai Kandla Total --141 130 126 496 893 2001 2002 1 552 285 43 1035 1916 2002 2003 ----856 4 -----

Port-wise wheat export from India during April 2002 September 2002): Quantity in Lakh MT. Port Kandla (Gujarat) Major Port. Mundra (Gujarat) Minor & Private Port Kakinada (Andra Pradesh) Major Port Vizag (Andra Pradesh) Major Port Tuticorin (Chennai) Major Port TOTAL: Quantity 7.70 2.90 Contribution 35% 13%

1.11

5%

9.00

41%

1.30 22.01

6% 100%

Out of the total export of 38.18MT wheat from India during the period of April to September 02, 19.11MT were handled through the major ports of India. Remaining 2.90MT handled through Mundra port a minor and privately owned port in Gujarat. The above chart shows the

individual contribution of ports during the recent 5 months. Here port of Gujarat Kandla & Mundra stands second and third in their contribution. exports. This shows the importance of Gujarat Ports in wheat

GUJARAT PORTS: Gujarat holds special distinction as the state with a strategic maritime location. Gujarat is having one major port Kandla, 11 intermediate ports, 29 minor ports Vansi Borsi, Magdalla, Bharuch, Bhavnagar, Jafrabad, Veraval, Porbandar, Okha, Bedi, Navlakhi, Mandvi, Jakhau etc and eight Private ports Pipavav Port, Dholera, Maroli, Sikka, Positra, Hazira, GCPTCL (Dahej), & Mundra Port. Comparing to other ports of India, major part of the wheat is being exported through Ports of Gujarat. The hinterland approaches to the north central and western parts of India, which are the major wheat producing states, boost the wheat export through Gujarat Ports. Year-wise wheat export through various ports of Gujarat:

Qty in Lakh MT. Port 2000 2001 Kandla Mundra Bedi 5.00 0.80 1.40 2001 2002 10.30 5.36 1.20 2002 2003 16.20 6.00 3.00

Yearwise wheat export through Gujarat Ports

2002 2003
Bedi

2001 2002

2000 2001

Ports

Mundra

Kandla

10

12

14

16

18

Qty. in Lac Mt.

Kandla is the major port in Gujarat and has a major share in the export, import of Gujarat. Beyond that the emergence of minor and private owned ports in Gujarat have given a large contribution the export / import trade of Gujarat. Mundra Port stands second in handling wheat.

MINOR PORTS AND ITS EMERGANCE:

The Private Port Policy and the developments in the infrastructure facilities have boosted the entry of new ports. Privatization of ports brought new technologies and infrastructure facilities. These increased competition among these new ports in infrastructure facilities, technologies, performance etc. A share of cargo being handled through Kandla port has shifted and distributed among these minor ports. In the case of wheat, minor ports like Magdalla, Bhavnagar, Bedi and Mundra gets a good volume for export. Recent developments in Port of Pivavav will enable them to handle wheat export. In the present scenario out of the total volume of wheat exported from Gujarat, Mundra stands next to Kandla. Presently the main competitor for Mundra in wheat handling is Kandla. In the coming years Mundra will have to compete with other minor ports like Bedi, Pipavav and Bhavnagar. To enable Mundra to compete with other ports in wheat export, a Master Plan using 4Ps of marketing are to be formulated and implemented.

Positioning Mundra Port as a facilitator for wheat exports using 4Ps of Marketing:

Ports are operating in a more and more competitive environment and the importance of marketing in port management and the port communities almost all over the world are recognizing development. The increasing interest concerning port marketing is closely related to the more competitive environment in which ports are operating nowadays. This increasing competition between the various ports is related to the globalization of the commerce of transport and of communications. The commercial service constantly has to study new possibilities in the maritime transport, and the attention of the interested parties (the suppliers of services, exporters) has to be drawn towards the potential commodities flows. Marketing is the process of planning the conceptions, pricing, promotion and distribution of goods and services to create exchanges that satisfy individual and organizational objectives. Marketing in ports, as in many other economic sectors, is composed of activities related to market research and marketing implementation. The research activities will allow the port to have its market analyzed, objectives fixed, strategy built and targets identified. Then in the implementation stage marketing tools should be deployed to achieve those objectives.

A successful seaport, either government controlled or privately owned is the one that is market-oriented and that develops a commercial strategy in order to obtain its market share. This commercial strategy should be supported by the implementation of an overall quality service management. The major concern of each port management is how it can attract more traffic in order to expand the port. Marketing means a lot more than the art of selling a good location, the well kept infra and superstructures, the perfect hinterland connections and the ultimate social climate, which characterizes the unique port.

Port Marketing concerns an overall concept where the whole port community is constantly acting in an awareness of total customer satisfaction. Customer satisfaction is related to the fact that the clients will judge the services in terms of their fundamental value to them. Clients are searching for those ports where they are offered the best price / quality ratio for the service they need. They like to buy benefits not products. Customer satisfaction requires all members of the port community to march in a coordinated way as a single stream and defending the same goal Customer first.

4Ps: There has been rapid development of port infrastructure all across the world. The process of privatization in several countries has hastened the

development. As a result, most ports are now operating in a more competitive environment. This has made the port community all over the world realize the importance of marketing in port management and, more importantly, development. The concept of marketing in ports, as in other economic sectors, is composed of activities related to market research on the one hand, and marketing implementation on the other. Research activities will allow a port to have its marketing analyzed, objectives identified or determined, strategy formed, and targets established. Thereafter, in the implementation stage, marketing tools should obviously be deployed to achieve these objectives. In the port business, the marketing tools can be described as 4Ps namely

PRODUCT/SERVICE, PLACE, PRICE & PROMOTION.

1. Developing the product/Service: being the port services, in order to satisfy the customers needs; 2. Place: The geographical position of a port, natural advantages, hinterland connectivity etc plays a great role in the successful placing of a port. 3. Prices: which must be reasonable to the customer, challenging to the competitors and return a fair profit to the port. 4. Promotion: to inform the market on the possibilities and qualities of the port.

Port Marketing Marketing in ports, as in many other economic sectors, is composed of activities related to market research and marketing implementation. The research activities will allow the port to have its market analyzed, objectives fixed, strategy built and targets identified. then in the implementation stage marketing tools should be deployed to achieve those objectives. In todays highly competitive international environment a successful seaport, either government controlled or privately owned is the one that is market oriented and that develops a commercial strategy in order to obtain and sustain its market share this commercial strategy should be supported by the implementation of an overall quality service management. The major concern of each port management is how it can attract more traffic in order to expand the port, employment etc., in brief, increase the prosperity of the region.

Increasing competition When it turns out that the trade and economy in the relevant markets are not in recession, yet there is a deadline of the port activities, the competitive position of the port should be urgently examined, because such a situation implies that the market share of the port is declining.

Changing needs of port users Many ports are experiencing increasingly turbulent markets, marked by rapidly changing customer demands. When there is a stagnation in one sector, a particular traffic will be influenced accordingly. In the phase of changes the port should not stay inactive when it has found the underlying cause of the change, and the new evolution in the needs of port users; the port should be able to identify new commercial opportunities.

New market prospects Its often too late to start marketing activity when problems have already occurred. In todays environment, ports have to anticipate market evolution with an active attitude in the competition, ports have to be engaged all the time in active marketing: to get rid of declining business in time; to prevent promising activities from being attracted away; and to seek new market prospects and new commercial opportunities before it is too late.

Competitive environment of port operation In the past each port used to have its own group of clients whose activities were just within the proximity of the port area and its captive hinterland, whose business was often out of reach of other ports due to their expensive and underdeveloped land transport systems and

sometimes due to political and administrative barriers. But as the scenario has changed, now there is a good information at work, port users compare different ports constantly, making full use of every difference and advantage and pushing ports into fierce competition.

Intermodel transport competition A ports competitor is not always another port. Ports may be heavily involved and influenced by competition between different modes of transport. World air transport, for example is taking more and more high valued goods away from traditional sea transport. Also land transport both rail or road can seriously affect port activities.

Within port competition One of the kinds of competition, the port manager has to deal with is within port competition. Competition within a port can improve the efficiency of port activities.

MUNDRA PORT Adani Port Ltd. representing Adani group and GPIDCL representing Government of Gujarat jointly promotes Mundra Port. Limited is the Terminal Operator of Mundra Port. Mundra Port is a new generation port located on the western coast of Adani Port

India along the northern coast of Gulf of Kutch in Kutch District, Gujarat. Gulf of Kutch is the largest inlet of the Arabian Sea. It is about 180Kms long and 75Kms wide at the mouth (west) and covers an area of nearly 5000Km2. Mundra Port is located at a distance of about 80Kms from the mouth. Since the commencement of operation from October 98 till 2003 Mundra Port has handled 12,16,000MT of wheat.

Wheat traffic forecast through Mundra Port upto 2010:

Year 2000 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010

Quantity in Lakh MT. 0.80 5.36 6.00 8.45 10.90 13.35 15.80 18.25 20.70 23.15

25 Qty. in Lac MT. 20 15 10 5 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Year

Quantity in Lakh MT.

Based on the forecasting of wheat traffic through Mundra Port upto 2010 the 4Ps of the marketing of Mundra Port are formulated. As far as a Port a service provider - concerned the term product an be termed as the Service it provides, the place where it operates. So in the 4Ps of marketing Product and can be termed as SERVICE. The product, or services is the cornerstone around which all other marketing activities will be designed. The reason why a port has been chosen for the handling of certain traffic is because of what the port can offer. The quality of services being offered by a port includes warehousing & storage facilities, Pilotage, stevedoring, sufficient berth facilities, and customer services etc. In order to make its service competitive Port has to formulate a strategy to improve the service being offered.

Pilotage: Port is having efficient Pilotage support system support system comparing to other competing ports.

Stevedoring: Presently port itself is doing the stevedoring work that is only one stevedore is working at the port. The efficiency of the port depends upon the efficiency of this stevedore. If more stevedores are allowed to operate at Mundra, i.e., if exporters are having the freedom to appoint their stevedores the performance of the loading can be increased thus the performance of the port.

Warehousing and storage facilities: Present storage capacity is 54530 Sq. Mtr. But these Godowns are commonly used for storing agro commodities, Fertilizers and Fertilizer raw materials and other commodities. This may create any contamination problem. Moreover fumigation and phyto find difficult in such a situation. Proper allocation of space at these Godowns for wheat should have to be ensured in the future. So dedicated covered Godowns for wheat storage are to be constructed. Through this contamination can be avoided to a great extend.

Movement of wheat is a cyclic process rotating daily, monthly basis depending on the arrival of wheat into the port and loading of wheat on to the vessel. So wheat arrival, frequency of shipment, load rate etc are the influencing factors of storage utilization and storage occupancy. Storage utilization and occupancy ratio is calculated on daily and monthly basis and so on yearly basis. In 2001 02, out of the total closed storage of 54530 Sq. Mtr, 20,626 Sq. Mtr were allotted for wheat storage. When converting this Sq. Mtr is into metric tones, it comes around 46,408 MT i.e., an average monthly wheat shipment through Mundra Port during 2001 02. So the total storage capacity for the full year was 5.60 Lac Mt. while the actual storage utilization was 5.36Lac Mt per annum. In 2002 03, Godown capacity were increased by 3,000 Sq. Mtr, hence the total storage capacity for wheat comes to 23,626 Sq. Mtr. When converting this Square Mtr area into metric tones, it comes to 53,159MT ie. an average monthly wheat shipment through Mundra Port during 2002 03. So the total storage capacity for the full year was 6.40Lac Mt. while the actual storage utilization was 6.00Lac MT. So based on the above fact of incremental trend, storage capacity required in the future is tabulated below. An excess quantity varying from 20,000Mt to 27,000MT in each year is added to ensure sufficient space.

Year

Wheat traffic trend Storage through Port

area Total qty. of

Mundra required in Sq. wheat can be Mt handled in the financial in Lac Mt. year

2001 02 2002 03 2003 04 2004 05 2005 06 2006 07 2007 08 2008

5.36

20,626

5.60

6.00

23,626

6.40

8.45

32,037

8.70

10.90

41,296

11.20

13.35

50,370

13.60

15.80

59,519

16.10

18.25

68,518 77,408

18.50 20.90

20.70

09 2009 010 23.15 86,593 23.40

Conversion: 1SqMtr = 2.25MT(in bagged form)

If any excess quantity from the projected quantity can be accommodated in other Godowns meant for storing rice, pulses & DOC depending upon the availability. Monsoon Sheds: Foreseeing handling of wheat during monsoon season while expanding the storage facility in accordance with the increase in wheat traffic port should construct sufficient monsoon sheds with temperature

maintenance system to store wheat during monsoon seasons

Tie up with FCI/CWC, Mark fed/PSWC etc.: Once FCI/CWC set up their godowns or if some godowns allocate them on lease sufficient buffer stock of wheat can be assured in the port as FCI always keep minimum buffer stock in their godowns. This will help exporter to save the transportation cost if they procure the wheat from other origins, can reduce the delay of vessel on berth due to nonavailability of cargo at port etc. So FCI / Mark fed / PSWC & other

central stockiest need to be encouraged to set up port stock points to facilitate logistical bottlenecks and railway restrictions to make export quality wheat available at port itself.

Railway link to the covered godowns: Presently the wheat coming in to the port through rail is unloaded on the open platform, and then it is being transferred to the godowns. As the port is projected as a round the year all weather port, in order to continue the unloading operation of wheat during rainy season, the railway link should be extended to covered godowns. This could also reduce the handling loss of wheat, which may occur while unloading and reloading operations at the open railway yard, or the open platform should be converted to covered platform.

Siding & rake dispatches: Port is well connected with the railway grid (Broad gauge) through 57Kms railway line from port to Gandhidham. Present restriction of 60 rakes / month for wheat parcels destination Mundra Port has to be removed to avoid hinterland bottlenecks. Operation will need to

demonstrate ability to free rakes within the allotted free period. This would create confidence among the shippers about their faster cargo movement and this taking less time for cargo accumulation at port.

Presently port is having two sidings for rake unloading. At least add two more silos, which can reduce the future congestion due to increase in cargo volume and traffic.

Silos: Considering the future cargo arrival, 6 silos godowns should be constructed with an aggregate capacity of 72,000Tonnes. The silos

should have truck unloading station and bleeding and re-bagging plant and should interconnect through conveyors. A 300Mtr long conveyor should connect silo to the present export cargo.

Railway congestion: As container operation will be operational in the near future, this will create congestion in the railway traffic. So seeing the future traffic though this route it is advisable to construct a double line link between Mundra Port and Gandhidham so that both traffic of container and bulk cargo can be controlled.

Sufficient allocation of berths for wheat: Presently 4 berths are operational and all cargoes are being handled through these 4 berths. Out of these 4 berths, Berth No.1 & 3 is having deep draft comparing to other berths and having mechanized conveyor

systems.

Large volume cargo like wheat, coal, fertilizer & FRM,

Minerals are handling through Berth No 1 & 3.

Berth Occupancy %: One criterion for determining efficiency of berth use is berth occupancy. The various factors which determine the efficiency of berth occupancy includes, cargo handling capacity of the vessel, cargo handling capacity of the berth (equipments available etc), nature of cargo, method of storage of cargo ashore, removal of cargo from berth area (by train / truck) or adjoining storage facilities.

In % YEAR Berth No.1 1999 2000 2000 2001 2001 2002 67.66 33.99 60.68 45.66 52.00 48.50 30.70 45.20 36.25 45.00 32.80 Berth No.2 26.40 Berth No.3 30.60 Berth No. Total 4 28.30 37.35

2002 2003

72.64

33.97

64.40

58.10

57.28

Cargo throughput on Berth No. 1 & 3 and future trend analysis: Cargo in Lac MT. YEAR Berth No.1 1999 2000 2000 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005 2006 2006 5.19 Berth No.2 2.10 Berth No.3 3.65 Berth No. 4 1.05 12.00 Total

10.26

4.72

6.13

2.78

23.90

16.67

3.97

8.38

4.50

33.52

21.66

4.85

9.47

6.13

42.11

27.20

5.50

13.84

7.83

54.37

33.00

6.13

18.20

9.53

66.86

38.50

7.00 7.70

22.60 27.00

11.20 130.00

79.30 91.70

44.00

2007 2007 2008 2008 2009 2009 2010 49.50 8.33 31.40 14.70 103.93

56.20

9.10

35.80

16.40

117.50

63.00

9.80

40.20

18.00

131.00

Berth No.1- Cargo throughput Berth No.1

70

Qty. in Lac Mt.

60 50 40 30 20 10 0 1999 2000 2000 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010

Year Berth No.3 - Cargo throughput

Berth No.3

45 40
Qty. in Lac Mt.

35 30 25 20 15 10 5 0
1999 2000 2000 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010

Year

The above graphs show yearly increase in the berth occupancy of Berth No. 1 & 3. Presently wheat, coal, fertilizer & FRM and Minerals are being handled through these Berths. In future this increase in the berth occupancy will lead to berth congestion for Berth No. 1 & 3. The cargo volume of all commodities increases simultaneously. An alternate

solution has to be decided for the future requirement of berth availability. Solution: The process can be finished in three phases: 1st Phase: Priority Berthing at Berth No.1 & 3: Constructing two dedicated berths will be a longtime and large investment process. So in the first phase give priority berthing for wheat vessels at Berth No.1 & 3 till year 2005. 2nd Phase: Dedicated Grain Berths for Wheat: Considering the above facts of berth occupancy ration and future berth congestion it is suggested that a dedicated Berth for wheat is needed to fulfill the future requirement of wheat handling. This project should start from 2004 so that it can be operational by Year 2005. Moreover in non-seasonal time these berths can be used for handling other

commodities also. So these berths can be used as stand-by berths during those periods and there berth congestion and bunching of vessels can be avoided in the port.

Dredging: Dredging could increase the draft hence Panamax vessels can directly berth. Bringing Panamax vessels could help the exporter to save ocean freight to a great extend, save berth hire, port dues, wharfage when comparing to bringing more handymax vessels.

Night navigation: Even when physical capacity is available, the actual port traffic gets restricted on account of lack of night navigation. Presently regular night navigation is available only in few major ports. In Mundra even though the vessels reaches the port during night hours, she has to wait till the next day to get berthed. Night navigation should be implemented in Mundra so that vessels can berth during night also, which could save in freight and other charges.

Set up cleaning facilities in the port godowns: Wheat cleaning mechanism: Cleanliness of wheat is a criterion of international quality. Port is having wheat-cleaning plant. This removes

dust, husk, wards/sticks, insects, higher foreign matters, and undersize and oversize particles having the capacity of 10,000MT/Day. Even though the machine claims a capacity of 10,000MT/Day the actual capacity comes to 3000 3500MT/Day. This negatively affects the loading rate of wheat. The capacity is to be increased to satisfy the future requirement. The machineries have to be updated because

presently port is facing some problem in the cleaning and low loading rate.

Mechanized loading system: Mechanized loading system is implemented. The export conveyor belt is having a capacity of 1,000MT per hour and is connected with the cleaning system, which ends to a ship loader. Capacity of the loading system is to be increased in accordance with the increase in capacity of cleaning system and simultaneously increase the capacity of ship loader. Through this mechanism speed evacuation or speed loading of wheat to the vessel can be done which could result the increased load rate and reduce the turnaround time which could reduces the manpower involvement nearly to zero and thereby reducing the handling loss almost to 0% and a maximum of 0.25% and can increase the loading speed. In order to boost the export of wheat Port has to achieve minimum of 12,000 15,000 Mt loading rate. In order to achieve the present facilities

of wheat handling facilities at Mundra it should be upgraded. Present wheat handling facilities and future up gradation in order to get higher load rate are mentioned below.

Description

Present capacity

Future requirement 550TPH each

No

Bleeding

lines

(Conveyors) 2 No Mechanized online cleaners Conveyor system

250TPH each

250TPH 1000TPH

550TPH 1000TPH sufficient. is

Bulk Storage facility at About 10,000 to 22,000 to 24,000 transit shed Average ship loading rate achieved 12,000 Tones 5249TPD Tones 12,000 15,000TPD

TPH: Tones per Hour; TPD: Tones per Day.

Labour force. Proper management of labour through effective labour management policy is needed. The service quality delivered is related to the care and satisfaction of the employees / labours in a service firm. In a port the working areas where manual works involve, labour problems will also

arise. Labour satisfaction is essential for the operational performance. A separate department could find out the problems of labours and could find out effective solution.

Office premise:

To Port Users: A port users building should be constructed enabling them to accommodate their staff during the working of their vessel at the port. Presently they are facing problem due to lack of space for their staff to work at Mundra.

To Surveyors & CHAs: During working of the vessel documentation works, survey reports, liaison with customs Dept. etc are to be performed by CHAs. So give office premise to surveyors and CHAs, which will be helpful for the customers to get the effective services of surveyors and CHAs.

To Transporters: Give office premise and allow transporters to operate out of Mundra. Presently most of the transporters are operating from Gandhidham. When a transport Mandy is established this facility will enable the transporters for smooth operation from Mundra.

To Bankers: Opening bank branches at port could help the exporters to do the bank related transactions easily and could speed up the money transactions.

Single window clearance: Port is already having a single window clearance facility. But this should be revamped because the exporter has to contact different officials and different departments for different purposes. window mechanism has to be implemented. The load rate: To be advantageous, Panamaxes or any large parcel needs to be loaded at least 15,000MT/Day without any pre-berthing delay. Presently the port gives an average load rate of 6000MT per day. In this expansion process the efficiency of ship loader and conveyor belt has to be increased simultaneously the loading rate has to be increased at least 15,000MT/Day. This offsets higher port DA at Mundra vis a vis Kandla / Vizag etc. Kandla /Vizag loads at approx. 5000 6000Mt/Day. So an effective single

Pre berthing delays:

Wheat exports continues to get pre berthing delay at Kandla, which reach 5 7 days. This translates to approx $1 disadvantage in freight. In Mundra also future increase in traffic may result in pre-berthing delay for wheat vessels. So only strict planning and effective Berthing Policy can minimize Mundra Port pre berthing delay. Once the dedicated

berths are operational these pre berthing delays and bunching of vessels can be avoided. vessels. But Berthing Policy will be needed for all cargo

Berthing Policy: Introduce an appointment system whereby vessels book time slots or berthing windows spaced out by Mundra Port. Vessels are guaranteed berth on arrival on their time slot plus minus a few hours.

Time Slot Scheme:

In order to avoid the bunching of vessels and congestion at the port Effective Berthing Scheme through Time Slot Scheme should be implemented. Through this priority berthing should be given to those vessels, which has declared 15 days before the estimated time of arrival and with a slab of 10 days, 7 days and 5 days. With this time slot scheme if more vessels comes in the same day, berthing should be on the basis of First Come First Served (FCFS). Vessels failing to meet the minimum norms for loading and discharging should be de-berthed from the berth to give slot to another vessel.

Customer Satisfaction: Satisfaction is a persons feelings of pleasure or disappointment resulting from comparing a services perceived performance (or outcome) in relation to his expectations. Port should aim for high

satisfaction, because customers who are just satisfied still find it easy to switch when a better offer comes along. Those who are highly satisfied are must less ready to switch. High satisfaction or delight creates an emotional bond with the service. The result is high customer loyalty.

Service Quality: Service Satisfaction = Expectation perception. Service quality can be divided into technical quality (what is received in service) and functional quality (how the customer receives the service)

For the purpose of improving the service quality levels, the port should first diagnose the appropriate cause of the customer service dissatisfaction and take the appropriate technical or functional measure to improve it.

Service quality must be measured: No measure to improve service quality will bear expected fruits unless service quality is periodically measured, benchmarks are set, and improvements effected are monitored and followed up:

The Marketing Department should measure; How well do the port deliver what they promise. How often do the port do things right time? How quickly do the port respond to service requests. How much satisfied the customers are. How much confidant the port has on its service. How do the customer rate the appearance of the ports facilities, services, communications etc. Overall how would the customer rate the quality of the service? Overall how would the customer rate the quality of the competitors service?

 What are their recommendations?

The Port should make it easy for the customers to deliver suggestions and complaints. In order to find these details the best way is to

implement a feed back form which exporter will fill up and give to port after each of their exports. The same can also be incorporated in the web page of Port so that the exporter can inform port their complaints and suggestions regarding the service. This could of course help the port to improve its performance.

Complaint Management System: In order to upgrade the service and to serve the customers more efficiently, a Complaint Management System should be implemented. In this complaint management process every complaint received from the customer should be documented and appropriate solutions be established with lessons learned so that similar mistakes would not be repeated. Through this loop holes and drawbacks of services of Mundra Port can be identified and measured and the service can be improved. Customer satisfaction surveys: Generally most of the customers dont complaint about the service, they just switch over to other service providers. Complaint levels are thus not

a good measure of customer satisfaction. Conducting periodic survey is the best way. The Marketing Department should send questionnaires or make telephone calls. They also solicit customers views on their competitors performance. While collecting customer satisfaction data, it is also useful to ask additional questions, this normally be high if the customers satisfaction is high. The Marketing Department should contact customers who have stopped working with the port and have switched to other ports. They should meet them in person and find out their problem in working with port and give them confident and get back to the port again.

Total Quality Management: (TQM): One of the major values customer expects from service provider is high service quality. Most Customers will no longer accept or tolerate

average quality. Growing competition in the service sector, rising customer expectations and increasing recognition on the part of services firms that mere compliance to quality specifications or programs on quality assurance may not always deliver, has provoked interest in implementation of Total Quality Management enroute to making their organization world class. The principal element of TQM are; People, appropriate technology, quality control through problem solving tools / procedures, and a resolve for continuous improvements.

ISO Certification: ISO 9001 : 2000. ISO Certification is the symbol of quality of service. ISO 9001 ensures the quality of service provided by the port. This can get confident among the customers regarding the quality of service of the Port. Presently Port is having no ISO certification. ISO certification can effectively bring SOPs, procedures of working and quality of service hence can improve the performance of the port in wheat handling.

Customer first: It means offering more authority as well as support to front line customer contact people who must be rewarded for the initiative they take in enhancing the customer satisfaction. It may also note that the service quality delivered is related to the care and satisfaction of the employees in the service firm. It may be too much to expect employees who are ill treated to keep treating the customers treat the employees as it expects them to treat customers.

Strategic location: Mundra is located in the Gulf of Kutch on the Western Coast of India at 224424 N and 694713 E. Mundra Port is strategically located as Indias natural gateway to the West. Port is having four multi purpose berths, which can accommodate four vessels at a time. These berths are around 1.5Kms away from the shore. It is the nearest deep water Indian Port for the vast landlocked and productive hinterland of Northern, Western and Central Indian states, which contribute 38% of the countrys trade. Most of the agri cultivations are concentrated in these regions of India mainly Gujarat, Punjab, Haryana, etc which increases the importance of Mundra Port. Most advantage of Mundra Port is that It is the closest Indian port to the international navigation route leading to the Middle East, European, African, Scandinavian countries and the Americas.

Nautical approach: The nautical approach defines the capacity of the ship that can be accommodated by the port. The nautical approach of the port is closely related to the geographical condition of the port. Timely dredging

should be conducted so that the deep draft can be maintained, which will enable the Panamax vessels to get berth. Bringing Panamax vessels is a cost effective solution to the exporters.

Contribution of Hinterland: Hinterland is the main contributor of cargo to a Port. It acts as the origin for export cargo and destination for import cargo handled by a Port. As part of Marketing segmentation exercise one should examine the contribution of hinterland in three components:

a. Immediate hinterland -Prime Hinterland - (upto 50Kms). b. Intermediate hinterland - Competitive Hinterland from the Port) c. Extended hinterland - Distant Hinterland - (beyond 150Kms). (50150Kms

Immediate Hinterland: The immediate hinterland for Mundra comprises of Kachch region, West Rajasthan, Punjab, and parts of Haryana. The competition for Mundra in this hinterland is mainly from Kandla Port. All other ports besides Kandla and Mundra are relatively distant. Ports such as Mundra and

Kandla would offer freight savings vis a vis other ports to shipper in this hinterland and hence would be the port of choice. Given the proximity of Kandla to Mundra, choice between the two orts would be a function of service levels and port efficiency in addition to logistics costs and time.

Intermediate Hinterland: This region includes parts of Saurashtra, Ahmedabad, Central Rajasthan, parts of Haryana and Eastern Punjab. Till lately Kandla was the nearest port facility. However, the new port development at Pipavav provides an alternative. In addition to these ports, other minor lighterage ports (GMB ports) such as Porbandar, Bhavnagar, Jafrabad also competing ports for traffic in this hinterland. Pipavav and Kandla are at comparable distances for most users in this hinterland while ports at Mumbai (MBPT & JNPT) are relatively distant. Mundra could compete with Kandla, Pipavav, and other GMB ports to offer logistic cost advantages to shippers.

Extended Hinterland: Extended hinterland includes South Gujarat, East Rajasthan, Delhi, Haryana, East Punjab, and parts of UP. The major ports catering to this

region are MBPT, JNPT, minor GMB ports like Dahej, Haziraa, Magdalla and upcoming / new ports like Pipavav etc. The hinterland for the western region ports can be mainly divided into north bound cargo (which comprises of Punjab, Haryana, Delhi and Western parts of UP), Rajasthan, Gujarat, M.P. and others which includes Maharashtra.

Hinterland Immediate Hinterland: Kachch, West Rajasthan, Punjab, Parts of Haryana Intermediate Hinterland:

Competing Port(s) Kandla

Kandla, Pipavav, Porbandar,

Parts of Saurashtra, Ahmedabad, Bhavnagar, Jafrabad Central Rajasthan, Parts of Haryana, Eastern Punjab.

Extended Hinterland: South Gujarat, East Rajasthan, Parts of Haryana, Eastern Punjab

MBPT, JNPT, Dahej, Hazira, Magdala, Pipavav.

Above is the overall picture of the total hinterland influence of Mundra for traffic. Most of the hinterlands are interlinked. Unlike other cargoes, wheat cultivation and procurement are spread almost all the hinterland and are interlinked. Separate marketing strategies for wheat are to be formulized for each hinterland. Procurement of wheat is taking place by two methods:

01: Procurement through FCI Stock points: In this case hinterland will not be an obstacle because FCI has opened stock points in almost all geographical reaches of the ports so for procurement of wheat from these FCI stock points will not cost more for exporters.

02: Direct procurement from the place of cultivation: In this case the hinterland reaches plays a role. A competitive logistic solution for transportation strategy (both by rail and road) is to be formulated. Here the port has to improve the existing rail and road connectivity by formulating an effective logistic solution to cater the wheat cargo from the hinterlands.

Railway Link: To enhance competitiveness of the port in the vicinity the Port is connected to Indian Railways National Broad gauge system. To smoothen the operations Mundra Port has procured two engines on its own. This can make the cargo movement easier.

Existing Railway linkage to upcountry: Present railway links from Mundra to upcountry the route is Mundra Port Adipur Gandhidham Viramgaon Ahmedabad Mehsana Palanpur Ajmer Jaipur Delhi. The main linkage to all the upcountry is Delhi. From Delhi almost all the upcountry can be linked to the network. Presently the rail distance from Mundra to Delhi through the above route is 1300Kms. As far as the Extended hinterland concerns, JNPT is the competing port to Mundra. In the present railway linkage, Mundra Port offers a distance advantage of 108Kms to upcountry as the rail network distance of JNPT and Delhi via Vasal Vadodara Kota Mathura Delhi comes to 1408Kms. Port of

Pipavav comes in both intermediate and extended hinterland region of Mundra Port. But presently due to non-availability of railway linkage, Port of Pipavav will not come in the competition.

Future Railway linkage to upcountry: If a rail linkage can be established to Delhi from Mundra as Mundra Port Adipur Gandhidham Bhildi Palanpur Jaipur Delhi the total distance will come to 1190Kms so a total saving of 110Kms. At the same time as the rail linkage between JNPT and Delhi remain unchanged the distance advantage of Mundra comparing to JNPT will be 218Kms. Railway linkage to Port of Pipavav is under construction. Once it is completed the railway linkage of Port of Pipavav with Delhi will be through Pipavav Surendranagar Virambaon Mehsana Jaipur Delhi and the total distance will come to 1284Kms. Then also when

comparing to Port of Pipavav, Mundra will be having a distance advantage of 94Kms.

This can be attained in two phases. 1st Phase - (Immediate): Make a link Gandhidham Viramgaon Mehsana. This route has a potential to bypass Ahmedabad for all rail movement from north (from Punjab, Delhi and Haryana). This could save a distance of 46Kms.

2nd Phase (Long term): Connect Gandhidham directly to Palanpur through Bhildi bypassing Viramgaon Ahmedabad Mehsana route thereby saving a total distance of 110Kms to upcountry (Delhi).

In addition, broad gauge conversation of Bhatinda Bikaner Jodhpur Ajmer link could enable connectivity of Punjab to Ahmedabad via Mehsana. Bopal and Indore in Madhya Pradesh can also have direct rail connectivity to Ahmedabad. the Jodhpur Marwar broad gauge link (140Kms) which will enable bypassing of Ajmer, shortening rail distances from Punjab by 151Kms (ex-Jodhpur via Merta Road Phulera). The current route is via Merta Road Ajmer Marwar (378Kms), and the new route would be Merta Road Jodhpur Marwar (315Kms). the Luni Samdari Jalor Bhildi link (265Kms) metre gauge presently, if converted, alongwith the Bhildi Gandhidham (267Kms) metre gauge will enable bypassing of Marwar and

Palanpur for connectivity of Punjab by 214Kms Kms vis a vis the route via Ahmedabad, 151Kms vis a vis the route via Mehsana, 91Kms vis a vis the route from Palanpur.

Road connectivity:

Present Road connectivity: The two main arterial trunks for connecting Mundra to Northern Hinterland (upcountry) are NH15 (connecting Amritsar Bhatinda via Samakhiali Bikaner Jaisalmer) and NH8 (connecting Delhi via Ajmer Jaipur Rewari). In terms of the approach to Mundra by road, two state highways SH50 and SH6 connect to Mundra from the junction at Bhimasar, the common point for Mundra and Kandla and the gateway to the National Highways. Given the distance of the port at 15Kms from Mundra, the total distances from SH50 and SH6 to Mundra Port are 90 and 96Kms respectively, corresponding to a 32Kms distance between Bhimasar and Kandla. Thus Mundra Port is at a minimum additional distance of 58Kms by road (ex. Bhimasar).

Future Road network: Ajmer is a Junction point where the alternate route via Palanpur on a state highway has potential to bypass Ahmedabad (which is presently the junction for road traffic) for reaching Mundra. This route will result in a distance saving of 185Kms (ex. Ajmer) to Mundra. Currently Ahmedabad is a junction point for traffic flowing to the ports in Mumbai. Congestion beyond Ahmedabad into Mumbai is extreme and an alternate route would be welcomed. Thus, the Ajmer Palanpur Mundra link could divert traffic away from the busiest road route in the

west. Hence, improvement of this road link is extremely important from the viewpoint of development future wheat traffic at Mundra.

UGEDI ULAT DESHALPAR MATHAL KOTDA JHURA LORIA SUMRASAR DHOORI JURAN JIKDI RATIA DUDHAI

CHOBARI MANFARA

TORNIA

KHIRAI

ADHOI LODAI

CHITROD

NAKHATRANA
0/0 0/0 BHUJ

LAKADIA BHACHAU

KODKI MANJAL DESHALPAR MOTHALA ROHA KOTADA

TAPAR

0/0

25/10

5/4 MANKUVA
GODPAR

9/0

KUKMA RATNAL

CHIRAIM CHIRAI N

281/300
JANGI

KATARIA WAHDHIA

PADANA GALPADAR

280/080

SIHAGADH

RAJADA

ASMBN

PATRI

K H A R O

RATADI PRAGPAR

N N) XT (E

RUK MAV ATI R

8A H-

GHANDHIDHAM KHEDOL

TUNA VADALA

D
GODHARA KODA DURGAPUR

TALVANA

371/135

32 K

DAHISARA

0/0

M.

BAG

BARWAQLA BHUJPUR

MANDVI

150 MTR. WIDE RAIL/PIPE/ROAD CORRIDOR (GAPL) MUNDRA PORT

BALAMBHA JODIYA

AMRAN

MORVI

MEGHPUR

TANKARA

G U L F

O F

K A C H C H H

UN
BIRD SANCTUARY

NK KA I AT AV
DHROL

MARINE PARK SANCTUARY

Above-mentioned rail and road development strategy is a grand project and are under the control of Central / State Government. Income So

through Mundra Port is an income to Indian economy also.

Management has to influence Government lobby to sanction it. The Management can get it done by BOOT (Build, Own Operate and transfer) basis. Pricing is a difficult marketing function. Although in theory, the correct process should be indicated by the intersection of the marginal cost curve, in practical terms, it is very difficult, if not impossible, to

construct these curves. The issue of pricing is very complicated, indeed. Although pricing is an important factor more and more shippers place quality and efficiency of services before the price of those services. Many examples show that those ports, which are expensive but efficient, are more competitive than the cheaper but inefficient ports. The pricing of a port is established at different levels, and some that are more clearly distinguishable are: Harbour dues / Port dues & Wharfage. Handling charges. Storage charges. Extra services such as Customs Documentation, Phyto, fumigation etc. Such prices should be based on an internal cost accounting system in comparison with competitors prices.

Harbour dues / Port dues & Wharfage. In the cut- throat competition in the International Wheat Market Indian exporters have to make their cost competitive. Where they can save are in inland transportation, Port dues and other charges at the port of loading. To attract wheat exports to Mundra Port and to increase the volume of export Port Authority has to make some necessary adjustments in the port dues, berth hire, anchorage charges & wharfage.

Present Port Dues and Berth hire of Mundra Port are:

Port dues:

Chargeable per vessel call to include Tug Assistance, Pilotage, Etc. for berthing and de-berthing:

Vessel (GRT) Up to 9,999 10,000 to 19,999 20,000 to 39,999 40,000 and above

Charges per GRT US$0.57 US$0.56 US$0.55 US$0.57

Subject to a minimum of: US$ 600 per vessel US$5,000 per vessel US$9,500 per vessel up to 3,000 GRT. up to 15,000 GRT. up to 60,000 GRT.

To make the cost competitive port has to some schemes like every second call in the same month Port should give a 10% discount in Port

Dues. This can attract more shipments to Mundra. Another scheme of Discounted Port DA scheme is mentioned in Page No.57.

Berth Hire: Chargeable on the basis of time spent by the vessel at a berth alongside the marine terminal. US$0.15 per GRT per day or part thereof. Subject to minimum of US$300 per vessel call.

This charging per day should be changed and proportionate charges per hours should be practiced because in some cases for example if the vessel stayed on the berth for 26 hours the vessel have to pay 2 days berth hire. So if berth hire is charged on hourly basis the exporter can save a charge for 22 hours. So berth hire should be charged on hourly basis.

Anchorage Charges: Chargeable on the basis of time spent by a vessel at the anchorage for cargo work or any other operations within Mundra Port limits (But not waiting for berth at the Marine Terminal: US$0.25 per GRT per day or part thereof. This anchorage charges also have to be restructured and to be charged on hourly basis.

Similarly all the charges, which are linked with the duration of stay of a vessel, should be calculated on hourly basis instead of day basis.

Wharfage: The present wharfage of Mundra Port is Rs.35.00PMT, which is almost 3 times higher than what other ports are offering. It is obvious that the wharfage of private port will be in a higher side. Some sought of discount in wharfage should be given to the exporters to attract more wheat export through Mundra Port. A suggestion for the same is described under Volume Discount Scheme in page No.55.

HANDLING RATES: Handling rates of competitive ports: Ex Kandla For all westbound cargo Ex Kandla / Mundra / Bedi are the natural choice. THC at Kandla are at Rs.200PMT levels and vessels have Port DA advantage over Mundra by almost 20 30 cents PMT.

EX Kandla For all eastbound cargo Ocean freight disadvantage of $1.00 1.25 is offset partly by lower THC viz a viz Vizag / Kakinada of Rs.40 60PMT. Ex Vizag / Kakinada For all eastbound cargo THC ranges in Rs.250 280.00PMT levels. To attract east bound cargo to Mundra, Port have to play on a combination of factors:- freight advantage per Panamaxes, THC advantage over East Coast contamination of cargo at Vizag, Vizag handled too many dirty cargoes. Pricing and promotion at Mundra should be determined by considering the above factors. Moreover the abovementioned factors, Port should give a discount in Terminal Handling Charges (THC). The slightly higher handling rates at Mundra can be compensated by the scheme mentioned under THC Discount in page No.56.

Royalty: In this case, Port can give the freedom to the exporter to select their own stevedores. All the stevedoring activities and other activities such as phyto, fumigation, customs documentation etc. will be done by their nominated agents and the port will get a lump sum amount as royalty.

Storage charges / period: Reduction in the storage charge can attract more business. When

comparing to the overall rate, the income to the port through this storage is very less, but for an exporter he consider this as a factor. Give 30 days free storage then charge a nominal rate on FIFO (First In First Out) Basis.

Extra services such as Customs Documentation, Phyto, fumigation etc. The port should give a long- term contract to some agency to conduct phyto & fumigation. This could make the price competitive, thus the port can give a competitive rate to the exporter. Similarly the port can also do Customs Documentation so that a competitive service can be provided to the exporters.

Cost preference: From the Port Users point of view two most important factors, which determine their preference for a particular Port, are: 1. Total cost involved. 2. Logistics.

Total cost:

In the total cost of maritime trade, there are five components of costs viz. a. b. c. d. e. Inland transport cost to reach the Port of origin. Cost incurred at the Port of Origin. Sea transport cost. Cost incurred at the Port of Destination. Inland transport cost beyond the Port destination.

As far as wheat exports concerned the dealings are signing either by FOB or CIF basis, hence the first three points matters. In FOB basis, the responsibility of exporter ceases once the cargo loaded on to the vessel and in the case of CIF, the exporter has to bear the cost, insurance and freight upto the port of destination.

Considering the three points; a. Inland transport cost to reach the Port of Origin.

As mentioned in the logistic section (Page No.57 by establishing a transport Mandy at Mundra and promoting import cargoes through the port, transporters will get return cargo, thus the freight charges will come down. Moreover, the new road and rail connectivity projects (Page Nos.44 to 49) could reduce the road and rail distance from the source of cargo to the port of loading, thereby considerable reduction in the inland rail and road freight can be ensured.

b.

Cost incurred at the Port of Origin:

Generally cost incurring at Port of Origin are handling charges, Port DAs and wharfage. Some of the promotional schemes are given below through which the cost incurred at the Port of Origin can be make competitive ie. it can offset the cost incurred at Mundra Port vis a vis other ports.

Schemes (Promotional): In order to attract new wheat exporters and to retain the existing exporters port has to fabricate some promotional schemes. Port should offer any or some of the promotional schemes depending up on the situations.

I.) Trial shipment for new wheat exporters: New wheat exporters should be provided a trial shipment of small parcel through the port in a very much-discounted rate. Once they get the satisfied with the performance of the port then the stipulated rate can be charged. This will give a confidence to the customer to make an

experiment with the port as they are dealing first time.

II.) Volume Discount:

Volume discount scheme can be formulated as the exporter who had handled a minimum of 75,000 tones of wheat in the immediate preceding financial year will quality for the volume discount scheme. The average throughput achieved by the exporter during the preceding two years should be the benchmark for the volume discount scheme. For exporters who handled cargo only in 2002 03, the benchmark for the discount scheme will be the throughput achieved by them in the year 2002 03. Te average of throughput for 2001 02 and 2002 03 will form he benchmark for the year 2003 04 and 2004 05. Thereafter, the benchmark should be revised taking into account the average of the immediately preceding two years. The port should give a discount on wharfage of 10% if an exporter gives a cargo throughput, which is above 110 percent and upto 120 percent of the stipulated benchmark, a 15% discount on wharfage if the cargo throughput is above 120 percent and upto 130 percent of the benchmark and 20% discount on wharfage if the throughput is above 130 percent of the benchmark.

III.) THC Discount: In order to increase the business volume, the method of volume discount scheme can be practiced. Depending on the volume of cargo give some discounts in a sliding scale depending on the increasing volume. So on every increase of volume on Metric Tone basis reduces the handling rate

on a particular slab. This will make the exporter to increase the cargo volume so could avail the volume discount benefit.

IV.) Cash Discount: A credit period is given in all the vouchers raised. A cash discount should be given to those who pay their bills promptly. This could encourage the client to make payment within the stipulated period.

V.) Trade Discount: For those wheat exporters who make long term contract with the port for handling their wheat should be given a discount in the handling rate as they ensure a fixed long-term business with the port.

VI.) Promotional Allowances: Approach CHAs and Commission Agents working at various other ports and offer them a commission for shifting the wheat vessel from that port to Mundra. At the same time Port should give discounted trial shipment to the exporter also.

VII.) Discounted Port DA: For every second call of a vessel of wheat exporter within a month Port should give a discount of 10% in Port DAs.

c.

Sea Transport cost:

Bringing Panamax vessel to Mundra can directly save ocean freight of US$2 comparing to bringing handymax vessels.

Logistics: It depends upon the Ports geographical location and the inland transport facilities in its hinterland. Geographical location may provide a Port with certain inherent advantages.

Development of Transport Mandy: Present problem: An important factor that affects road movement of cargo to Mundra is the lack of return loads for trucks. Road freight economies are

contingent on the availability of return loads. Lack of return loads may make cargo movement by road to Mundra more expensive then usual in short term. However, given the proximity of Kandla, this may not be a significant issue in the short term.

Solution: The long- term availability of cargo at Mundra itself will enable lower road freight costs to Mundra. Wheat is an export cargo. Return cargo to the trucks, which are bringing wheat into the port, can be assured as;

A:

Promote more import of cargoes like scrap, fertilizers & fertilizer

raw materials, sulphur, steel plates, iron ores etc. Most of these cargoes are road-moving cargoes from the port. This could ensure return cargo to the trucks. B: Establish a Transport Mandy at Mundra. As return cargo start

getting to the trucks the availability of truck to Mundra will be increased. In the second phase establish a Transport Mandy at Mundra. This could further ensure the availability of trucks at any time. Moreover if more facilities are getting at these mandees, more transporters can be attracted to Mundra Port.

Railway link connectivity: Detailed logistic solution is mentioned under Existing & Future railway link in page Nos.56 & 57.

Road connectivity: Detailed logistic solution is mentioned under Existing & Future road connectivity in Page Nos.59 & 60

This is the most visible function for the introduction and promotion of a port. The facilities, services (product) and costs, with an emphasis on productivity and turnaround, are projected to the existing and potential clients.

Promotion would also mean an effective communication between the port and its existing as well as potential clients to inform them, and, more importantly, influence their attitude towards the port.

Nature of Promotional Mix: Advertising is highly effective in creating awareness, but its impact is less during the later stage. On the other hand, personal selling by

organizing get-togethers and delivering talks at the doorsteps of the perspective users will become more effective in Ports. Such personal communication ensures a live, immediate and interactive relationship between Port Management and prospective users in which each party has the potential to help others by his interest and involvement. relations and publicity are helpful in creating awareness. and into exchange its impact is greatest at the port of exchange. Public Sales

promotion has greatest effect when pushing the user over the threshold

Response curve of various Promotional mix. Advertising Sales Promotion

Personal Selling Public Relations and publicity

Awareness Action

Interest

Desire

Although promotional tasks would differ from country to country, the main tools would be:

ADVERTISING: Advertising is the communication link between Port and the Port Users / Prospective port users. Advertising as a part of the total marketing mix

influence the service especially for who are either the port users or the prospective clients to whom the port is targeting for. A total advertising solution is to be designed to make awareness of the port among the business cluster. Advertising should be targeted to the wheat exporters. While designing an advertising campaign the target should be focused to the wheat exporters. Simultaneously a brand image should be established. As we are targeting wheat exporters and providing facilities for wheat exports, when there is a wheat export, the name Mundra Port should come to the mind of exporter. Advertising should be capable of establishing the brand Mundra Port as Port of choice for wheat exporters. Customers are more concerned with the quality and price of service. As the target customers are interested in the facilities and services being offered by the port, advertisement should project the USP of Mundra Port on the basis of 3Ps of Marketing Mix Product (Service), Place & Price. Advertisement should give focus to priority berthing of wheat vessels, single window clearance, infrastructure facilities such as rail/road network, mechanical loading / handling systems which can give speedy handling of cargo thereby the exporter can save more.

As the international wheat standard demands the quality of wheat, state of the art wheat cleaning mechanism at Mundra Port should be specifically mentioned in the advertising campaign. Hinterland approach influences the cargo movement. Most of the exporters are scattered over Punjab, Haryana, Delhi and UP i.e. Upcountry. They are interested in knowing the rail / road route to reach to Mundra. So the hinterland approach through road and rail should be mentioned in the advertising. Hiring an advertising agent can give a good result. They are well aware of the pulses of market. They are experts in selecting effective promotional materials, selecting effective media and advertising / promotional copies. They can use their creative ideas.

Media Planning: Advertising and promotional materials cannot give the desired result until it reaches to the target customers. For this an effective media is to be selected. Media are the media to reach these messages and to make awareness of the port. Careful selection of appropriate media is an important factor of advertising. Generally two types of media are selected electronic and print media. Both these media are important. Both these media has their own peculiarities and could give individual and combined results.

A: Electronic Media: Television and Internet are powerful electronic media in the case of marketing of port.

01: Television: Television has become very common media for broadcasting. Special advertisements should be made on Mundra Port and should be broadcasted through Television. It is very much important to book the slot for broadcasting. Selection of channel is important. Channels like BBC, Star News, CNBC, Star Plus etc can be selected for advertisements since many of the executives watch these channels. Moreover these foreign channels can make awareness of Mundra Port around the globe and could get vide publicity among foreign buyers also. Care should be taken in the time slot booking also. Time should be selected when the business executives watch the channels, preferably after 8:00PM.

02: Internet: Internet is the latest update of technology and is a powerful media. As mentioned earlier, Mundra Port should launch its official site. The site should be designed to show the entire infrastructure and other services.

Commodity-wise pages should be included. Internet can be accessed from anywhere of the world. Internet is used as media of business communication and knowledge searching. Putting banners on other web site is a novel technique in the media of Internet. Mundra Port should put such banners in port agricultural related web sites. Some of & logistic related and the suitable sites are

www.commodityindia.com and www.webchartering.com because most of the exporters visit this site for chartering vessels.

03: Email: Email is subsidiary facility of Internet. Mundra port should prepare a detailed flyer focusing the wheat handling facilities / capacities of Mundra Port and send across the existing and prospective wheat customers. These flyers should be updated on fortnightly basis and should circulate to wheat exporters.

04: Audio Video material: A detailed movie clipping showing the entire port infrastructure, cargo handling facilities, operational details, achievements giving special focus to wheat handling should be prepared and can be used as the promotional material.

B: PRINT MEDIA:

Newspapers, magazines, brochures, leaflets etc. comes under print media. 01: News Papers, Magazines & souvenirs: Newspapers and magazines are effective media for advertising. Advertisements should be given in main news papers like Business Line, Economic Times, The Hindu, Times of India (Business column) etc. and Magazines like Business world, India Today, The Week etc. Comparative advertisement generally practiced in consumer products can also be practiced in the case of Mundra Port. Comparative charts showing facilities of Mundra Port in wheat handling vis a vis other ports should be given in dailies and magazines. Port should give advertisements in souvenirs of agricultural and wheat exporters/importers. Giving advertisements in souvenirs of organizations like Indian Potash Limited, MMTC, GNFC, GSFC etc could cater vide area of advertisement.

02: Brochures, Leaflets & Catalogues: Mundra Port should prepare a detailed brochure, leaflets, etc., which shows the facilities and advantages of Mundra Port comparing other ports and use it as a promotional material. A special attention should be given to show the wheat handling facilities and infrastructure facilities. Sending these brochures to wheat exporters will help in the promotion.

More attractive photos of the handling facilities, storage facilities, etc of port should be included in the brochures.

PUBLIC RELATIONS & PUBLICITY: A variety of programs are designed to promote Mundra Ports image and its services. 01: Press meetings & Publications. News stories and features are more authentic and credible to readers than advertisements. The achievements attained by the port like highest loading rates, best turn around time etc should be declared and published in the dailies and magazines which will make the exporters aware of the quality of the services being provided by the port. This keeps them updated about the facilities provided by the port.

02: Events: A: Domestic Exhibitions: Mundra Port should attend in Domestic fairs & Agri trade fares being conducted by trade promotional organizations of country through which they can display and distribute brochures, leaflets and audio visual CDs. Such exhibitions attract agricultural exporters.

B: International Shipping Exhibitions Overseas:

ITPO has a major Programme of organizing participation by Indian companies in over 50 international fairs in various parts of the world. Similarly FIEO (Federation of Indian Export Organizations) regularly conducts International trade fairs. These fairs offer exporters for an array of merchandise especially for agri exports. Over the years, ITPO has regularly taken Indian products, technologies and services to more than 100 cities in different parts of the world. Most of the foreign Mundra Port They can

agricultural products buyers attend such exhibitions.

should attend International-shipping exhibitions overseas.

install a stall and display all the audio video promotional materials, catalogues, and brochures.

C: Organize port days & Port Users Meeting: The port user community ship-owners, ship agents, freight forwarders and shippers councils also play an important role in advertising. They should build a positive relationship with various organizations to encourage them into playing a significant role in the marketing of the port. Within the port they should conduct Port Users Meeting, through which giving a platform to port users to express their ideas, their complaints, their difficulties in working with the port etc. Port

Management Committee should study and analyze all this and through which they can improve the productivity and performance of the port.

D: Sponsorships & Seminars: Sponsorship is one of the popular methods of getting positive exposure for the service. Port should sponsor some agricultural / Fertilizer

Seminars and also Port and logistic related exhibitions.

SALES PROMOTION: Sales Promotions are short term and seasonal incentives offered to the customers to induce them to purchase of the service. Some of the Promotional schemes that can be offered to the customers are already mentioned under the section PRICE. Those promotional schemes can be given to the customers to boost the business simultaneously the pricing can also be made competitive. Moreover the method of

Relationship Marketing can be practiced to retain the customer relationship and new customer development.

Relationship Marketing: Relationship marketing means attracting, developing, and retaining customer relationship to build strong customer royalty. It is important in service businesses that involve a process of continuous interaction.

Identify the major wheat exporters. Collect personal data of the key personals and decision takers of the organization like birthday, marriage anniversaries, religious ceremonies etc and give them gifts, cards, bouquets etc on the occasions. Through this an emotional relationship can be built. Gifts should be given to the office staff and media persons on festivals like Diwali, Xmas etc.

PERSONAL SELLING: Face to face interaction with one or more prospective customer for the purpose of making presentations, answering questions, and procuring orders. Personal selling presents all kinds of relationships to spring up, ranging from a matter of fact selling relationship to a deep personal friendship. The method of Segmentation, Targeting and Positioning should be practiced in the personal selling effort. A systematic approach using AIDA (Attention, Interest, Desire and Action) method to approach new clients is given on the next page. In the chart given on the next page, the 3rd step, during the meeting a detailed Questionnaire could help to get more systemized data from the Customer.

Process of contacting the New Customer: (05 Steps . 30 days)

01: Identification of the Customer

2 days
02: Send brochures with covering letter for a meeting

7 days

Follow up with a phone call

7 days
03: Actual Meeting

Fill up points to ponder Arrange for a presentation date

2 days

Send a thanking letter; Confirm presentation.

10 days
04: Actual Presentation

Invitation to Mundra.

2 days Thanking letter; Invitation to Mundra

05: Regular Follow-Up

MARINE

1. DRAFT:

Ports

Highest draft (mtrs)

Bedi Dahej Kandla Mundra Navlakhi Okha Pipavav

5 3.5 11.2 16 4 8 11.5

A comparison to other ports draft of Mundra port has capability to berthing PANAMAX and Capsizes vessels. Panamax has a capacity of 100000 DWT cargos, if exporter has more than 70000 tones cargo, then they have a benefit to move their cargo in single vessels and can minimize their cost by paying charges for single vessel.

In case if cargo traffic is more than 50 lakh MT, port has opportunity to construct berth accordingly.

2. PILOTAGE AND TOWAGE: Pilotage is not compulsory for a port upto a draft of 9.14. it is necessary for a more draft of 9.14. Bedi: Pilotage is not compulsory. However, the pilots whenever required render services. Dahej: Pilotage is not compulsory. Kandla: Pilotage into and out of Kandla is compulsory except for those vessel specifically exempted by the port authorities or exempted under the provision of Indian Port Act 1908. A vessel shall not be permitted to navigate to Docks, channels or entrance unless propelled by main engine or assisted, when necessary by an efficient tug. In the insufficient stream power being provided by the master or owner or whenever the port authority feels that services of the steam tugs are required, they are used for towing the vessel so as to berth it along side wharfs/berths. Mundra: Pilotage service is compulsory, for the ship entering and leaving the port. Navlakhi: Pilotage is a necessary from Tuna buoy. Okha: Pilotage service is not compulsory.

 Pipavav: The port provides the pilotage and towage services. Pilotage at the port is compulsory. Apart from a pilot launch, the port has also deployed two tugs, one of 42T bollard pull and the other 35T bollard pull.

3. NIGHT NAVIGATION: Night Navigation is carried out in Ports for Bedi: Dahej: Kandla: Port customers benefit.

There is no night navigation facility. There is no night navigation facility. This port has Night navigation facility.

Mundra: This port has night navigation facility. Navlakhi: This port has night navigation facility. Okha: There is no night navigation facility. Pipavav: This port has night navigation.

As Mundra has benefit of night navigation facility, vessels can be loaded and unloaded at night. Due to that cost is minimized like Port dues, berth hiring charges and anchorage charges and also reduces turn around time.

CIVIL

1. JETTY: Bedi: Dahej: Kandla: Mundra: Navlakhi: Okha: Pipavav:

There is a Small lighter wharf with three berths. There are two private jetties. There are 11 Dry jetties and 6 oil jetties. There are 4 berths. There is one privately owned lighter jetty from

United Shipping Ltd. with 5 berths. There is a lighter wharf and there are two jetties. There are three dry cargo berths and one

LPG/Liquid and a single length jetty.

As Mundra has four berths which is sufficient to handle current cargo traffic. Mundra ports berths also handles diversified cargo. Kandla port has an advantage of having 11 dry berths and 6 liquid berths, volume of cargo traffic here is higher than any other port in Gujarat.

2. STORAGE: Bedi: Transit Godowns (covered) 10,220sq.mtrs. Storage Godowns (covered) 12,033sq.mtrs. o Platform for transit.

 Pucca platform- 4 numbers of bedi port. Open platform for storage. 12 nos. admeasuring 13660 sq.metre at bedi port. Dahej: The Port is capable of handling vessels of 6,000 DWT to 60,000 DWT and the present Storage Terminal capacity is about 300,000 cubic meters of hazardous liquid & gaseous chemicals falling in 'A', 'B', and 'General' classes. Kandla: Covered storage space pf 2.66 lakh tones. Total open storage space of 184 hectare. Liquid storage capacity, chemistry and edible oil 703645 KL, POL+ ACID 1223837 KL. Mundra: Godowns facilities of about 2400 sq.mtrs. are available.Mundra offers one of the largest liquid tank farm storage areas inside any port in the country, 65 tanks with a total capacity of 2.62 lakhs KL. Navlakhi: Open plots around: 1,19,420 sq.mtrs. Platform around: 17,800 sq.mtrs. Covered Godowns are available. Okha: Warehousing and storage facilities 16 Godowns. Pipavav: 7 Warehouses of 600 sq. mtrs; one is of 3600, and one is of 3100 sq.mtrs. Open stockyard of 200,000 sq.mtrs. for storage of bulk cargos.

Mundra has largest liquid tank farm storage areas than any other port in India, it stores chemicals of type A/B/C. For dry and bulk cargos it has open and close storage areas, it also has cleaning facility at the port and cleans about 12000 MT wheat per day, which is sufficient to meet the current demand. In case increase of cargo traffic in future port has opportunity to develop storage capacity because port has vast land of area.

OPERATION

1. Handling facility for different cargo: Bedi: 3 of averages 350 BHP 1 of 1600 BHP Water barges: 1 no of 75 tones capacity Mobile coals Crane: 5 nos. of 12.5 Tones capacity. Kandla: Private barges arranged by port users enable usage of 10,000 to 15,000 MT of cargo per day. Mundra: The multipurpose jetties have facilities to handle liquid and solid cargo. Maximum size of vessels handled like M.V. Pantanal, LOA 277 Mtrs. DWT 75220. Have tugs of three max. bollard which can pull 47 tones.

 Navlakhi: Private barges arranged by port users enable handling of 10,000 to 15,000 metric tones of cargo per day. Okha: Have four tugs, tug-1No .3400BHP, tug-1NO 1600 BHP, and tug-2 No. 382 BHP. And also private barges are available, cranes-No. of 12.5 tonnes, 1 No. Of 16 tonnes. Pipavav: The Electric level luffing (ELL) type cranes are equipped with a built in hopper and a cross conveyor with a rated handling capacity of 1000 MT per hour per crane. The rated handling capacity of this conveyor system is 2,000 MTs per hour. The port has employed 2 weighbridges of 40T capacity and one weighbridges of 60T capacity. Mundra has mechanized system for loading and unloading cargo, has a capacity of 1000MT tones per year, for loading and 1500 MT per year for unloading.

DISTANCE

RAILWAY CONNECTIVITY: i. Distances (Northern hinterland): Bedi: Road connection through the coastal highway.

 Dahej: Dahej is connected to Bharuch (distance 45 Km) and Vadodara (108 kms) by road. The nearest railway station is Bharuch on board gauge trunk route. The nearest airport is Vadodara, Which is connected with Mumbai and Delhi. Kandla: A gateway to the northwest India, due to a unique location advantage it access a vast hinterland of 1 million square kilometers. Stretching upto Jammu and Kashmir by meter gauge and broad gauge railway system and National Highway no. 8A Mundra: Mundra is connected to gandhidham by road and than by national Highway and by broad gauge railway to the rest of India. Nearest airports are Kandla and Bhuj. Navlakhi: It is connected by broad gauge railway line with the rest of India vai Maliya. The nearest airport is at Rajkot. Okha: It is connected in India with a broad gauge railway system and by road to Jamnagar / Porbandar and then by National Highway. Nearest airport is Jamnagar, Which is 180 kms. away. Pipavav: Port Pipavav is now connected to its hinterland via Surendranagar by the broad gauge rail network of Indian Railways. Pipavav Rail Corporation Limited (PRCL) promoted by Gujarat Pipavav Port Limited and the Ministry of Railways has undertaken the broad gauge rail connectivity

project. Port Pipavav has developed two railway sidings inside the port limit in close proximity to the warehouses and the berths for efficient and speedy handling of cargo. The rail sidings are capable of handling bulk, break-bulk and containerized cargo. Mundra is connected with broad gauge rail to all over India, but Mundra needs some more connectivity.

CITIES

MUNDRA (IN KM.)

KANDLA (IN KM.) 934

BEDI ( IN KM.) 984

BAHADURGARH, HARYANA AMBALA, HARAYANA KARNAL, HARYANA FARIDABAD, HARYANA JAIPUR, RAJASTHAN PATIYALA, PUNJAB LUDHIYANA, PUNJAB MANDI, HP.

996

1126

1064

1119

1083

1021

1074

1010

948

995

737

675

722

1097

1035

1092

1117

1055

1115

1250

1188

1247

ANALYSIS From the table, we can say that variation between ports is low and in case of Mundra and Bedi is vary negligible so, there is high level of

competition between Bedi and Mundra in terms of distance and thereafter Kandla and Mundra. As far as transportation cost is concerned Kandla is economical so, if Mundra wants to capture market of both- kandla and Bedi so, in case of Kandla, Mundra has manage the rate of other services so that price parity can maintained and can be at par with other ports. To minimize transportation cost, try to find out the market nearest to the Mundra port. Traffic study of the year 2003-2004

Statement showing traffic during Maarch 2004 and From April2003 to March -2004 (Figure in Tonnes) Sr.N O Ports During March 2004 Import Navlaakh 1i 16128 20549 36677 794357 22489 110049 2 Bedi 3 Okha 4 Dahej 30970 52260 438623 193928 8 9 1804487 2904986 61068 855425 Export April 2003 to Maarch 2004 Total Import Export Total

22955 75215 685772 529399 1215171 22649 46127 373506 117126 3852191

2 5 GPPL 18406

21030 39436 847474 1058525 1905999 52809 244024

6 GAPL

265638

262460

1 2089479 4529720

Analysis Adani port plays a major role in the export market with 50% of the total share in the overall exports. Its imports are 32% 0f the total imports which is almost 1/3rd of the total imports

Statement showing portwise/commoditywise import traffic during 2003-04 (Figure in lakh tonnes) Sr. No. Commodity 1 Acrylonitrile Navlahki Bedi Okha Dahej GPPL GAPL 0.64

2 Bitumen 3 Cement 4 Coal &Coke 5 Fertilizer 6 Steel/Pipe 7 S.K.O 8 Degumed Soya oil 1.31 0.08 0.78 7.22 3.73 4.65 6.86 9.39 0.05 5.19

0.21

5.92 3.13 3.9 1.45 2.56

Analysis: As Coal and Coke is a commodity which is imported form all the ports cited in table, GAPL has 17% of import of Coal and Coke. Then after fertilizer is imported form three ports and GAPL has 40% import of total ports. But if we compared port wise import then Import of GAPL is 32% of total import of all the ports which is near to 1/3 rd of total import. From the table we can see that GAPL is importing highest number of Commodities than any other port cited here

Statement showing portwise/commoditywise export traffic during 2003-04 (Figure in lakh tonnes) Sr.No. Commodity Navlahki Bedi Okha Dahej GPPL GAPL 1 Agri.Products 2 Clinker 3 Foodgrain 4 Minerals 5 Salt 6 Steel Coils 7 SBM 0.61 0.28 0.02 2.33 0.89 0.52 3.59 1.85 0.65 3.12 7.26 7.06 0.26 1.01 0.93

Analysis: As we go by commodities then salt is exported from four ports and GAPL has 23% share, which is 1/4th of total export. Then after Food grain is exported from three ports and GAPL is exporting 70% of total export of food grain so it is market leader for exporting food grain.

Conclusion

Marketing of products are entirely different from Port Marketing. It involves marketing of its services. Nowadays port is operating in a competitive environment.

Mundra port is five years old and is competing with Kandla, which is fifty years old. So the main goal of Mundra port is capturing potential market and creating new customer segment.

In terms of Product Life Cycle Mundra port is in introduction stage and it is successful in the introduction stage and it is planning for expansion in the near future.

To attract new customers Mundra should offer them more services in terms of Augmented services, which will also help them to build goodwill in the market and due to which Kandla port may also reduce its price or provide more facility.

As Adani Group is widely famous for forward and backward integration of business in which they step in and economy of scale will follow ultimately. The example of this fact is Adani Wilmar Ltd. which has

introduced Fortune oil and which is been very successful in the Edible Oil Industry in a shorter period of time.

Recommendations and Suggestions Adani Port Ltd. should continuously contact with different industrial development center of major exporting state of north side, like we have Gujarat Industrial Development Center (GIDC), to get details about the market. One major thing is, Mundra has four berth, though they have multipurpose terminal, they are lagging behind in terms of availability of berth for exporter. Mundra has lot of land, which can be utilized and can compete with Kandla. Mundra should charge the customers on the hourly-based system, as it will be more beneficial to the customers instead of daily-based system. In port industry, port and its operation is separate entity, so operation activity should be carried out at various ports.

 As discussed earlier, port marketing depends upon availability of berth and rates. So rates of port dues, berth charges etc. are quite high compared to other ports, so rates should be reduced and due to that they can gain more business because it is supplier dominant market. As marketing point of view, marketing department should build a good relationship with exporter so they will rush to them for better services and Mundra can reduce promotional expenses. As Mundra is quite far from hinterland area compared to Kandla so that exporter are refused to come at Mundra due to high transportation cost, so Adani group should introduce new transportation services i.e. Adani logistic Ltd. so exporter has complete logistics solution. Adani can also go for collaboration of any transport services but it will not be beneficial for a long period of time.

BIBLIOGRAPHY
Kotler Philip. Marketing Management, Prentice-Hall of India Private Limited,New Delhi,2003. Broacher of Mundra Port. Annual Administration report of Gujarat Maritime Board (2002-2003). India Port Report, i-maritime Consultancy Private Limited, 2003.

www.commodity.com, www.kisanwatch.org, www.gmbports.org www.tsiindia.com www.mundraport.com www.apeda.com www.usda.com www.fao.com www.google.co.in