Dear Co-owners of Summit Alliance Port Limited,
It is my privilege and honour to welcome you, the owners of Summit Alliance Port Limited (SAPL) to the 15th Annual General Meeting. Your Company is the pioneer in the Inland Container Depot (ICD), Container Freight Station (CFS) and River Terminal sectors in Bangladesh and continues to be the largest and most important contributor in the industry.
2018–19 was a truly historic year for your Company as handover of the Kolkata Garden Reach Terminal took place on 30th October 2018 and in just 8 months we have handled over 560,000 MT of cargo, thereby exceeding the 1st Year target set by Inland Waterways Authority of India (IWAI) by over 60%. Despite the challenges of working in a new environment SAPL’s Management has quickly implemented the processes and expertise gained from over 25 years of operating Off-Docks and Ports in order to gain the confidence and trust of the new Indian clients.
Aside from the achievement of being the only Bangladeshi company to successfully implement a port project abroad SAPL has had the privilege of being involved with several notable events for India as the country’s first container movement by inland waterways took place from SAPL’s Kolkata Terminal with food and beverage giant PepsiCo loading 16 containers bound for Varanasi. Kolkata Terminal was also an intricate part of the maiden Passenger Cruise service between Dhaka and Kolkata with Indian cruise vessel RV Bengal being flagged off and Bangladeshi cruise vessel MV Madhumoti being received at Kolkata Terminal with 110 tourists.
With a 30 Year Concession Period having been secured with Inland Waterways Authority of India (IWAI) your Company will continue to grow the volumes as well as develop innovative products and services that will help connect our existing Muktarpur Terminal with Kolkata Terminal in order to open new avenues for bilateral trade between Bangladesh and India.
Your Company’s Muktarpur Terminal project is continuing to make significant improvements to both volumes being handled as well as towards achieving break-even. Following the belated regulatory permission the start of import container handling at Muktarpur Terminal has led to regular vessel calls at Muktarpur Terminal and the frequency of more than one vessel per week has also allowed for Export volumes which are time-sensitive to grow rapidly. Losses arising from the Muktarpur Terminal project for the current year have reduced by 49% compared to 2017 – 18 and Management is confident the project will positively contribute to your Company’s profits in 2019 – 20.
Your Company’s assertion and belief that Muktarpur Terminal will complement the Government-owned Pangaon Container Terminal has proved to be a reality and the close proximity of the two terminals is allowing for vessels to call on both locations and thereby achieve minimum economic container loads on each voyage. This has led to Muktarpur Terminal being proposed as an “Extended Port of Call” to Pangaon Container Terminal under the Bangladesh– India bilateral Shipping Agreement and once achieved will not only be yet another important milestone for your company but also allow new business opportunities in bilateral trade with India with vessels being able to call at Muktarpur Terminal directly from the Indian East Coast Ports.
With the Management’s efforts at Muktarpur Terminal showing encouraging results the main focus for the upcoming year will be the Chattogram Off-Dock units which is the primary business and the main contributor to your Company’s revenue. The National ICD – CFS Policy continues to stifle your Company’s efforts to increase profitability with tariffs remaining frozen despite the continuous increase in operating and fixed costs. This unusual situation has severely discouraged investment in the Off-Dock sector and the only capacity development in the last 2 – 3 years has been carried out by your Company which has led to a further 3.01% growth in Export volumes in 2018 – 19 in addition to the impressive 12.19% growth that was achieved in 2017 – 18.
For Import cargo the trend has also been worrying as Off-Dock volumes reduced by 8.40% despite the overall volumes at Chattogram Port increasing by 3.10%. This disparity arose due to a contradictory decision taken by the regulators whereby import items meant for the Off-Dock were allowed to the un-stuffed within the Chattogram Port premises, a move which has led to added congestion within the Port. While your Company has outperformed the industry there has still been a negative Import volume growth of 1.86%.
As the market leader, your Company will continue its efforts to engage with the regulators in order to find solutions that will allow for the Off-Docks to remain sustainable and be in a position where they can continue to support the country’s trade growth.
I am grateful to all our regulators, key stakeholders, our colleagues as well as members of the company’s Board for all their contributions in 2018 – 19. Most importantly I would like to thank you, our Shareholders / Owners, for your continued confidence, understanding and support to ensure the success of SAPL.
Warm regards and I look forward to seeing you again.
Muhammed Aziz Khan
Chairman, SAPL