MPL, (AIM:MPL), which is developing a port and logistics facility in Mumbai, India, is pleased to announce that it has entered into its second binding customer contract to manage cargo at its facility (the “Contract”).
The Contract, which is with an Indian-based trading and stevedoring company, has a seven-year term, and is then extendable by an additional two years. Under the contract, MPL will provide berthing facilities and approximately seven acres of backup land suitable for storage of cargo, which is expected to include pulses, fertilizer and construction materials. The area of backup land will increase as the cargo volume is increased. The Contract envisages a minimum of one million tonnes of cargo in year 1, two million in Year 2 and three million in Year 3.
Under the Contract, the customer shall be responsible for all handling operations and the customer will make a substantial capital investment in the facility through the construction of warehouses for storage. The first cargo under the Contract will land once the customer’s warehouses have been constructed, which is expected to be in the second half of February 2018.
Having announced that piling had been completed on 3 November, the Company is pleased to report that three berths on the jetty have been completed and are capable of receiving vessels. Channel dredging is complete and dredging in the berth pocket is progressing in line with the jetty becoming functional. The reclaimed land is being readied with the required finished surfaces for the different cargo types. An initial area, approximately 50 acres, will be completed and available as the necessary back-up land by January 2018, in time for the first cargo under the contract announced on 20 August, which is scheduled to land during the third week of January 2018.
The team has focused on ensuring that the facility will be part operational by the end of the year and the Company is pleased that this target has been met. The Company is also pleased to report that the vast majority of the technical and engineering workstreams for the entire facility are now complete. Reclamation work has continued in parallel with other workstreams since the monsoon eventually ceased in October and, now that the site is dry, reclamation and ground improvement activity for the balance of the reclamation works will accelerate and continue whilst the Facility is operating. Additional surcharge material continues to arrive on site on a daily basis and, early in the New Year, resource will focus on the less technically demanding expansion of the site’s footprint. To date, approximately 95 acres have been reclaimed and reclamation material for a further approximately 10 acres is already on site.
The Company’s infrastructure and equipment purchasing schedule is progressing as expected. The Group’s first contracted customers will initially employ their own equipment and the Board is confident that the facility’s infrastructure and equipment will meet the requirements of its customers, as necessary.
As the facility approaches the date on which it will welcome its first customer, the Company has intensified its marketing efforts. One example of this was management attending the Maritime, Ports, Logistics and Warehousing Exhibition 2017, which was organised by the Confederation of Indian Industry in Mumbai last month. The Company was proud to exhibit alongside some of India’s leading companies in the sector. The Company’s business development team leader, Umesh Grover, was a panel speaker, and the Company was delighted with the profile that this event achieved.
Executive Chairman, Nikhil Gandhi, said,
“Management is very pleased to have reached this important milestone. The contract announcements, together with the commencement of operations, leads management to be increasingly optimistic on the operational prospects of the Company as we seek to achieve our goal of creating a modern logistics facility, which is strategically positioned to be an important part of Mumbai’s logistical infrastructure.”
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