meanwhile Monroe Port owned by the adanis which was in the race to get in 99-year lease for the Australian coal terminal Albert Point has finally emerged a winner adani ports is in focus with the fourth quarter earnings revenue is estimated to come up almost 16 percent of while ebitda is expected to jump almost 22 percent on a year in your basis adani has an estimated forcing of around 120 billion dollars in interest range in some Australian coal mines to India's busiest Sports adani ports has reported a good set of numbers with strong performance comments from
the port and other businesses [Music] hi everybody adani ports and scg is one of the most incredible companies in the 21st century India and they have become such a powerful player in the market that today adani puts an SEC alone accounts worth 24 percent of the entire country's Port capacity has a 95 Market on the private Port market and most importantly in the past eight years itself their profits have shot up from 1700 crores in 2014 to a mind-boggling 5 300 crores in 2022 and in one line adani both and SEC have become so so
powerful that the biggest competitors are the Indian governments Port themselves so the question is what is so special about adani ports and scg that they're now competing with the Garment itself what was your business strategy that turned them into the most powerful Port operator in the country and most importantly what are the study materials to help you understand adani ports and scg and the port industry of India [Music] the first thing that made adani Port successful is their mode of operation you know guys most ports in India are either completely government handled or they have
a public private partnership model or a PPP model so in the ppb model the government owns the land and leases it out to private services and then when these private Services operate the port just like a landlord the government takes both the rent and the royalty share from the profits of the ports for example if you look at the jnpt Port it is owned by the government of India and four out of its five terminals are actually operated by logistic and shipping companies like the DB World PS International and two other companies so this way
private players come to construct births handle certain services at the port and take home profits so it's almost like I being the landlord I am giving you my commercial space and firstly you get paid to do the Interiors to turn the scrappy Place into a great office and secondly when you use this office for your business you pay me a rent and a percentage share of your profits now the question is why am I giving you this lame analogy to understand the PPP model well that is because ladies and Gentlemen Just Like You the tenant
needs to constantly seek permission from your landlord for making every little modification in your property these private players have to deal with the government for every major addition or modification to be done at the port a classic example of the same is the process of dredging for those who don't know when a ship is docked at the Port 10 percent of the entire ship stays underwater so if it's a giant ship it would need a lot of depth to stay afloat without getting stuck right so dredging is this process of removing sediments or debris on
the bottom of the harbors such that the depth of the port can be increased to birth a giant cargo ship so as you keep on increasing the depth of the port it will be able to dock bigger and bigger ships and as you can see from this chart to house a ship with a dead weight tonnage of 20 000 it would need a birth length of 250 meters and a depth of 12 meters similarly as you keep on increasing the capacity for 50 000 DWT you would need a depth of 15 meters and this is
where ladies and gentlemen the first competitive advantage of adani comes in you see if dredging needs to be done first of all very few companies will actually own these dredging machines why because each Treasurer might cost you around 300 crores so usually these government partnered private companies hire a dredging company that can come and carry out the dredging process now most people will be like yeah bro so what they would just hire a company and that's it what exactly is the problem well this is where two problems come in because the government is involved in
this so firstly if the private company wants to carry out dredging they will first need to take permission from the government to carry out this process this obviously leads to a lot of delays because of bureaucracy and secondly if the government is involved in this they cannot just hire some random Trading Company so guess what they go and issue a tender and this process again takes months to be executed so after the tender is floated the bids are submitted evaluation is done which again takes weeks and then the tender is passed after which the dredging
process starts so you see this is a very tedious slow and an inefficient process but guess what in case of adani ports the adani group owns and manages the ports completely by itself if you see adani handles 13 ports in India out of which while only four are terminals nine are ports so barely any permission is needed from the government in order to carry out this process like dredging and secondly no Tender Is to be issued because the adani group itself owns not one not two but a fleet of 22 dredging machines so as soon
as there's a shipping company that is about to bring a large vessel the entire process of dredging is carried out in the fastest way possible so that the port has enough depth to birth The Vessel this is how quickly the adani group gets ready to cater to the demand of the market so even today there's a company called the MSC or the Mediterranean shipping company they are the second largest shipping line in the world and they have one of the largest and the longest container vessels in the world and you know what because Mundra Port
has the deepest water depths in India Mundra is the only port in the entire country that has the capability to handle this vessel so this way Mundra is way ahead of the Garment boats because of which by default they have the most valuable clients in the Indian Port business and if you look at the numbers even today while Mundra Port has a depth of 16.5 meters the garment's largest port which is the kanla port it has a depth of 12.5 meters only this is the first reason why adani ports are way ahead of the Garment
ports now obviously just because accompanying can act quickly that cannot make it the most powerful player in the port industry right so the question is apart from just being quick what did adani pods do so special that it is able to now be the Garment ports of India well this is what ladies and gentlemen brings me to the second reason for the adani quotes dominance and that is something called integrated transportation system and end-to-end logistic system to understand this we first have to understand the logistical nightmare that could be caused in the Indian markets if
a player like adani does not exist so let's try to understand this using a story so let's say a steel company wants to import 100 tons of coal from Australia so first of all they'll have to place a purchase order with a coal mine in Australia and then they'll have to decide based on time and cost as to which is the best mode of transportation to ship the coal from the coal mine to a port so here's where again the steel company will have to hire either a trucking company or a railway line to ship
the coal from the coal mine to the port and then at the Port they'll have to supervise all the formalities to be completed after which the core will be shipped to India and even for this again the steel company's Logistics team will have to book a vessel according with the truck or the trucking company to receive the goods and then unload the coal onto the train and here's where if the coal arrives before the train they will have to to book a warehouse to store the coal which again increases the cost and then finally the
coal will be loaded onto the train and then will be brought to the steel plant so you see at each segment there is a lot of coordination that needs to be done and any delay will lead warehouses in between which will again increase the cost of logistics and every time the steel company's team has to coordinate with the vendors and constantly keep worrying about the time of arrival and the costing but you know what guys with the adani ports all you need to do is place an order of 100 tons of coal and that's it
and immediately the Adare team will give you the most efficient route to get coal from Australia to your steel plant so for the same order let's say if Tata steel placed an order with the adani group here's how the entire mapping will be done the call will be shipped from the Carmichael Coal Mine in Queensland to avoid Point Terminal why because both Carmichael coal mine and the Abode Point Terminal are owned by the adani group itself because in 2011 adani Enterprises acquired about Point coal terminal for 2 billion dollars and bought the Carmichael Coal Mine
in 2010 itself and more importantly the about Point Terminal is specially equipped for facilities for loading and unloading coal so depending on the traffic and the availability either the coal will be shipped by rail or by truck and by the way if it is a railway line there is a very good chance that the railway line is also owned by the adanis because the adanis have both stakes and ownership in multiple railway lines in Australia and because the abot point is also owned by the adani group the process of formalities and permission is done very
very seamlessly because number one the coal is coming from coal mine and secondly the client details are already registered with the adani group itself so within a jiffy the coal would be unloaded onto the trains and it will be transferred to the vessels for export to India and here's where this school will be received by an adani port and from this port the coal will be unloaded from The Vessel transferred to the trucks and be transported via Highway to jamshedpur so you see everything starting from the coal shipment within Australia to within India everything will
be coordinated by the adani group itself and this will be done considering all the factors such as traffic availability cost load and even weather conditions so automatically every mode of logistics is optimized to ship the coal in the most efficient and seamless manner this is the reason why the adani group doesn't just have ports but they also have a fleet of 78 trains they also have six operation Logistics parks that are specifically designed for the storage management and distribution of different types of goods on top of that they also have 18 grain silos for storage
and transportation of food grains from major food producing states to Major consumption States including Punjab haryana and madhya Pradesh to Karnataka Tamil Nadu Maharashtra West Bengal and Gujarat so you see this is what you call as end-to-end Logistics planning and execution and thirdly in this entire system even if the vessels come from other ports they have implemented paperless clearance and several other efficient processes because of which the adani ports have reduced their turnaround time of the ships by by 12 freaking hours and for those who don't know turnaround time is basically the time that is
taken by the ship to arrive unload load and then leave the port after clearance and according to the website comparison Mundra takes 12 hours less for bulk cargo clearance as compared to kanla port in fact in 2019 a study said that average turnaround time for mudra Port was 0.8 days whereas for other ports in India it was around 2.7 days average this is all by getting ready for the market opportunity way before the government posts by building the Next Generation end-to-end Logistics system and by building a super efficient system for its clients adani ports has
become the indisputable King of the Indian Logistics industry and this brings us to the last part of the episode and that are the study materials to help you understand the adani ports and the port ecosystem of India moving on to the study materials the first thing I'm attaching is the adani ports investor presentation which will give you an in-depth idea about what they do and how they do it secondly I am also attaching a money Control Pro profile page of the adani ports which will help you understand their financials better and lastly I am attaching
a thin school video to help you understand adani group's backward integration strategy better so do have a look at them and let me know what you think that's all from my chapter today guys if you learned something available please make sure to the like button in order to support our work that helps the YouTube algorithm a lot and for more such business and political case studies please subscribe to our Channel thank you so much for watching I will see you in the next one bye bye [Music]
