EREDENE CAPITAL PLC

CONTAINER FREIGHT STATION AT PIPAVAV PORT

The Eredene Group has invested INR 233.3m (£2.9m) for a current 49% stake in Contrans Logistic Pvt Ltd (formerly Box-Trans Logistics Pvt Ltd), a company which has developed the first dedicated Container Freight Station (“CFS”) at Pipavav, a fast growing port in the South of Gujarat State. The CFS is on a 79-acre green-field site, 700 metres from the port gates. There is also an option to acquire additional land for use as a ‘Free Trade Warehousing Zone’.

The CFS has been revenue producing since January 2008.  It has a 96,000 square feet bonded  warehouse to handle both imports and exports and a pave container stacking yard which is equipped with a reach stacker, three cranes, four forklifts and nine trailers. Revenue-generating operations began on 29 January 2008 with a shipment of paving stones to the English Port of Felixstowe.Incoming goods include granite, marble and metals and exports are mainly local agricultural products such as ground nuts and cotton.

Annual capacity of the CFS is planned to grow from 72,000 twenty-foot equivalent units (TEUs) to 150,000 TEUs by 2015.

The developers of Contrans Logistic have a successful track record in the CFS and shipping sectors and have been operating a CFS at the Port of Mundra in the North of Gujarat State since 2003. Mundhra CFS has a current capacity of 60,000 TEUs (www.mundhracfs.com).

The Port of Pipavav is owned and operated by the international shipping company Maersk which has undertaken a massive development programme with a new liquid cargo berth and expansion of the container terminal.  A second container berth opened in March 2008.

Trade through Pipavav Port is expected to expand rapidly after completion of a dredging programme to increase the draft of the main channel to 14.5 metres - sufficient for most large container vessels. This is scheduled to be completed in 2009.

Pipavav, located in the Saurashtra region of Gujarat, is a major gateway to the Northern and Western industrial regions of India which together contribute about 50% of India’s total container traffic. The Port is linked to the National Rail Network by a 380 kilometre broad-gauge railway.

Container Freight Stations are normally located close to ports and are designed to help de-congest them by moving cargo and customs related activities outside the port gates. A CFS typically provides value added services such as bonded warehousing, customs clearance, long-term storage, factory units for re-assembly of machinery and vehicles, warehouses for packing and unpacking containers, and rail and road transport services.