It is my privilege to communicate with you through my first letter after I took over as Chairman and Managing Director of CONCOR. I would like to thank my predecessors who have nurtured the Company through their vision and hard work and created a strong foundation for it.
Your Company''''s business is majorly dependent upon overall global and Exim trade of the country. It was yet another difficult year for the global economy with low growth and geopolitical uncertainties. The Exim trade of the country continues to face challenges and remained subdued impacting our business as well. Nevertheless, through focused approach, right strategies and hard work and dedication of team CONCOR, the Company has overcome all these challenges. It has performed well, particularly during the last two quarters of the current fiscal in which our market share has improved. I am hopeful that the Company is moving on the path of achieving its long term sustainable growth.
During the previous year, GDP growth was a robust 7.1%. In the recent past, the Government has taken various inspired actions towards the progress of the country, which include rolling out GST, demonetization of high denomination currency, renewed focus on infrastructure, etc. All these would help in boosting the economic activities in the country and the GDP in the times to come. This augurs good news for your Company as any boost in economy translates into growth for us.
In the year 2016-17, Indian Railways registered a marginal growth of 0.42% in originating loading of cargo, from 1,104.17 million tonnes in 2015-16 to 1,108.79 million tonnes in the current year. The originating containerized cargo transported by rail increased from 46.18 million tonnes in 2015-16 to 47.49 million tonnes in 2016-17, an increase of 2.82%. Your Company achieved 38.12 million tonnes of cargo volumes in 2016-17. The inland penetration of containers from Ports to hinterland by rail continue to be at around 19%, which was quite less due to various trade related reasons including high haulage costs involved in rail based multimodal transportation.
Overcoming the challenging business environment, your Company has delivered a resilient performance during 2016-17. In current year, it has achieved a handling volume of 3.10 million TEUs, registering a growth of 6.09% over the previous year. In the Exim and domestic segments, the volumes handled were 26,41,695 TEUs and 4,60,516 TEUs, an increase of 6.70% and 2.75% respectively over the previous year. During the year, it achieved a gross turnover and net profit of Rs,5,895 crores and Rs,858 crores respectively. The net worth of your Company increased to Rs.8,846 crores from Rs,8,346 crores in the previous year.
The Company is fully confident about its long term business outlook and has therefore continued to invest in expanding its infrastructure. In this direction, during the year, it spent an amount of around Rs,1,057 crores toward capital expenditure mainly on creation of new terminals, expansion of existing ones and acquisition of wagons, etc. The Company has taken major initiatives for development of several Multi Modal Logistics Parks (MMLPs) across India. This will result in business growth contributed by substantial augmentation of handling capacity, locational advantage, value added services, exposure to other segments of value chain, etc.
With rising competition, our endeavor is to retain our market share in rail containerized transportation. Your Company believes in sustainable and responsible growth and is taking innovative steps in marketing and meeting customer''''s expectations towards reliable and cost effective services. Our continued emphasis on double stack running from Mundra/Pipavav Ports to Khatuwas and vice-versa is giving good results and we expect this trend to continue during current financial year also. The running of Time Tabled Trains service was another initiative that yielded positive response from the trade. This service was started for both Domestic (Chennai, Bengaluru & Hyderabad) and Exim (for Kathuwas from TKD - Dadri) segments.
CONCOR is poised to reap the benefits from the opportunities emerging post GST implementation and looking with keen interest for new business avenues in the field of warehousing, e-commerce, 3PL, etc. Our commitment is to provide not only best services to our customers but also value for investment to our investors. Our ethos is “Customer Value Creation”.
Technology is a great enabler but its flipside is that it may also create disruption for the established businesses. It is a well recognized fact that technology and mobile connectivity are rapidly changing the consumer behavior and the business processes. Your Company is committed for digital transformation to leverage our IT capabilities to achieve the competitive advantage. It has taken many IT initiatives, which include providing continuous cargo visibility to its customers through mobile app., SMS facility and our interactive website.
The Company has framed strategies and has plans in place to achieve its future goals successfully. The robust growth in Indian Economy is bound to result in additional transport demands. This, coupled with the anticipated changes in profile of traded goods from intermediate to finished goods, is bound to increase the opportunities for containerization. Further, the large number of Industrial Parks, SEZs etc. by State Governments and Ports offer your Company an excellent opportunity for serving as logistics partner for the states/industrial estates through arrangements of mutual benefits. The growing market potential in air cargo, automobile sector, food supply chain management and coastal shipping offers scope for diversification and are being worked upon.
Your Company believes that success of an organization in the long run will depend upon its goodwill and contribution to the community which it creates through good governance and giving back to the society. It has always followed transparent practices in doing its businesses particularly in the areas of Corporate Governance and its Social Responsibilities. It follows the best laid down principles in letter and spirit and has adopted good systems and procedures thereby creating an environment of trust among all its stakeholders. The CSR initiatives taken by the Company in the field of education, health, environment sustainability, skill development, etc. have touched and positively impacted the lives of many underprivileged people across the country. The Company earmarked an amount of Rs,24.27 crores for CSR during the year, which has been fully utilized.
I would like to thank you for the unstinted support and trust in the Company. I would also like to thank the Company''''s Board of Directors and Ministry of Railways for their continued guidance and support. I sincerely appreciate our shareholders, esteemed customers and our business associates for having reposed faith in our efforts which has helped us to earn their confidence. I have tremendous faith in the talented and dedicated team CONCOR and I am sure they will take the Company to new pinnacles of success in the future.
With best wishes,
Date: 23 08 2017 (V. Kalyana Rama)
Place: New Delhi Chairman and Managing Director