NUTEP plans for expansion as volumes soar and new customers arrive

News Release FESCO July 9, 2012

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NUTEP, one
of the leading container terminal operators in the Black Sea port of
Novorossiysk, is to expand the capacity of its terminal there to accommodate
on-going double-digit growth in the number of containers it is
handling.
 
NUTEP,
which is 100% owned by the Delo-Group, currently has three berths - 39, 39a and
39b – that provide a total berth length of 754m  and serve
ro-ro vessels as well as container ships. This quay is currently served by three
ship-to-shore cranes with a fourth crane on order. This new Liebherr
post-Panamax crane should be commissioned in September and will take the
terminal’s handling capacity to over 400,000TEU per annum. 
 
Novorossiysk is the largest container port in the Black Sea and the
principal gateway to Southern Russia. Since May 2012, NUTEP has won two new
regional/common feeder services:
 
·      
United
Feeder Service (UFS) has started a Turkey/Black Sea service with the port
rotation Istanbul – Constanta – Poti - Novorossiysk – Istanbul. Currently, UFS
is using a single 1022TEU vessel Volos to maintain the weekly
service.
 
·      
The ARKAS
Group’s feeder specialist EMES is now linking NUTEP with two terminals in
Istanbul - Marport and Mardas – on a weekly basis using three 1604TEU ships:
Claire A, Diane A and Wanda A. This service forms part of the larger
ARKAS East Med - Russia Express service that calls Novorossiysk, Marport,
Gemlik, Izmir, Mersin, Famagusta, Alexandria, Marport and Evyap.
 
In the
first five months of 2012, NUTEP handled 94,270TEU, which was 18.5% up compared
to the same period in 2011. Its main customers are Maersk Line, CMA CGM, Admiral
Container Lines and CSAV.
 
NUTEP is
also expanding its landside operations to cope with the expected increase in
traffic. The existing rail facility is being relocated and expanded to provide a
five-track railway park. The effective length of  the new park - 380-540 m
- will facilitate the handling of two block trains simultaneously, compared to
just one at the present time. 
 
With the
relocation of the existing rail tracks, NUTEP's CY will expand its intake
capacity from about 12,000TEU to 20,000TEU by early 2013.
 
<H2
style="TEXT-ALIGN: justify; LINE-HEIGHT: normal; MARGIN-TOP: 0cm; BACKGROUND: white; VERTICAL-ALIGN: baseline">Other terminals in Novorossiysk, NLE and NCSP - which both belong to
the holding company Novorossiysk
Commercial Sea Port
- are also considering expansion of capacity in the coming years, based mainly on conversion of existing
multi-purpose facilities to container handling. </H2>
 
In view of this development and increasing demand from its customers,
who work with all three terminals, the Global Container Service Group (GCS) –
being the largest private intermodal operator in Southern Russia and
Novorossiysk – has recently added 224 rail flat-cars, each 80ft long, to its
existing fleet and plans to increase the number of long-term leased flat-cars
operated by Ruscon to over 450 units. These will be deployed in block trains
operated by Ruscon, a member of the GCS Group. 
 
As a multimodal specialist, Ruscon already operates several regular
intermodal services from the port of Novorossiysk to principal destinations in
the European part of Russia, including Moscow. This new capacity will enable
Ruscon to expand its block train operations further.
 
Taking the
long term view
 
Speaking recently,
the Chairman of the Board of Directors of NUTEP’s parent company GC “Delo”,
Timofey Telyatnik, said that they planned to triple the capacity of the
container terminal and, in addition, to double the capacity of the grain
terminal, which they also operate in Novorossiysk. This will be achieved by the
construction of new railways and deepwater berths, he added.
 
Currently
NUTEP is the biggest terminal in Novorossiysk in terms of capacity and second
biggest by throughput. Telyatnik saw this as a positive factor. While the other
two are running at close to capacity, especially in peak periods, NUTEP has
ample capacity to take on new business. He emphasised:
 
“NUTEP currently has
the largest capacity reserve – 40% or over
150,000TEU – in Novorossiysk and the Azov-Black Sea basin.
 
“Other container
terminals operate at the limit of their capacity. We still have the reserve. We
can say for sure that for the next two years NUTEP will be the only terminal
with the capacity reserve.”
 
Also worth noting is
that the Azov-Black Sea basin share of the Russian market in 2011 was 14% or
676,000TEU. In turn, Novorossiysk’s share of the Azov-Black Sea basin was 94%
and NUTEP’s market share in Novorossiysk was 30% or 200,000TEU.
 
Continuing on this
optimistic theme, Telyatnik said:
 
“Analysts are
predicting market average growth of 10-15% but
we anticipate that we will grow faster than the market. We have already seen an
increase of 30% in the first quarter. In the first quarter of 2012, NUTEP
handled 50,700 TEU compared to 38,670TEU for the same period last
year.
 
“That’s why GC “Delo”
plans even more – an increase of NUTEP’s capacity up to 600,000TEU by early
2016.”
 
Telyatnik then went
on to talk about new berth and rail facilities.
 
“The realisation of
two major projects will allow NUTEP to achieve significant growth in both
container throughput and grain terminal capacity.
 
“The construction of
a new berth, Berth 38, will enable NUTEP to take
6,000TEU vessels on a draft of 15m. The total capital cost of the project, which
has already been cleared with the Ministry of Transport and Rosmorport,
will amount to US$140-150m.
 
“The berth itself
costs $100m and will be built from federal budget resources. We will lease it
and provide all of the handling equipment. Our investment will amount to
approximately $40-50m. Construction will start next year and will continue till
the end of 2015.”
 
The second project in
the company’s business plan is the re-positioning of railway tracks. As was
stated earlier, the existing container terminal rail link will be relocated to
provide a new five-track facility but Telyatnik wants the grain terminal to
benefit too:
 
“We are the only
company which owns its own railway track into its terminal. It is just one track but soon it will be five, all
linked directly to the main Russian rail system. Today, the railroad is run only
to the container terminal but there is no railroad to the grain terminal; the
grain is brought here by trucks and it puts us at a competitive
disadvantage.
 
“We are investing
$10m in railway construction, all from the company’s own funds. The contract has
already been concluded, the works have been started.”
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