Bangalore: Japanese shipping firm Mitsui OSK Lines Ltd (MOL) on Tuesday announced it will float a joint venture firm with Chennai-based Sical Logistics Ltd to operate a completed car yard at Ennore Port in Tamil Nadu.
The company has signed an agreement with Sical to establish the joint venture within the year, MOL’s president Akimitsu Ashida said in a statement.
The move is part of the Tokyo-based firm’s strategy to strengthen its auto logistics business in India.
The joint venture will undertake yard operations such as storage and preparation for loading of vehicles of Nissan Motor Co. Ltd bound for exports, for which MOL has already secured a contract, Ashida said.
In June, MOL had announced winning a contract for inland transport and port operations of completed cars for export from a new Nissan Motor factory, coming up at Oragadam near Chennai. The plant will start manufacturing cars in early 2010 and begin exporting vehicles, mainly to Europe, in late 2010.
The contract includes transporting cars to the port, providing storage and preparing them for loading.
In October, Nissan Motor India Pvt. Ltd had signed an agreement with Union government-owned Ennore Port Ltd to export vehicles manufactured at its Oragadam plant through the port.
In November, MOL had set up MOL Auto Logistics (India) Pvt. Ltd, a wholly-owned auto logistics unit, to tap into the domestic auto logistics market and car exports.
MOL Auto Logistics will offer a full line-up of inland transport and export-related port services for finished vehicles, Ashida said.
MOL has indicated that the subsidiary will cater to both the domestic and export needs of car makers in India. It will provide inland transportation services by car trailers, as well as export-related port services for finished cars.
“The (Nissan) contract should lead to ocean shipping in the future,” Ashida said. MOL’s fleet includes pure car and truck carriers, some of which call at Mumbai and Chennai ports.
In May, NYK Line (India) Ltd, the Indian unit of Nippon Yusen Kabushiki Kaisha Ltd (NYK Line), Japan’s largest shipping firm by fleet size and revenue, had signed an agreement with state-owned Container Corp. of India Ltd to establish a 50:50 joint venture that will transport automobiles by rail.
NYK Line is one of the world’s biggest car carriers.
Global vehicle carrier specialists such as Hoegh Autoliners AS and Wallenius Wilhelmsen Logistics AS have also entered India’s auto logistics market by starting shipping services or setting up dedicated automobile terminals at ports to tap the country’s rapidly growing automobile exports.