EREDENE CAPITAL PLC

CONTAINER FREIGHT STATION FOR THE PORTS OF CHENNAI AND ENNORE IN THE SOUTH INDIAN STATE OF TAMIL NADU

The Eredene Group's first investment with the Sattva Business Group, a Container Freight Station (CFS) at Vichoor near Chennai in the southern State of Tamil Nadu, progressed from greenfield site to paying its first dividend in less than two years.

The joint venture, in which Eredene has invested INR 68.6m (£850,000) for a 49% stake, started operations in October 2007 and paid its maiden dividend in March 2009. It handled over 25,000 TEUs (20-foot equivalent units) in container volume in its first full financial year, and throughput increased by 64% in the six months to September 2009 to 18,000 TEUs.

Customers include steel-maker ArcelorMittal and India's leading typre manufacturer MRF.

Work on expansion of the facility continues. The CFS is currently spread over 25 acres, with three warehouses, six acres of stacking yard and 60,000 square feet of open bonded area. It is located in the industrial hinterland of two large ports, about 12 kilometres from Ennore and 17 kilometres from Chennai, both expanding ports where there is growing demand for container service facilities.

Sattva Vichoor provides a full range of CFS services - bonded warehousing for exports and imports, secured and paved stacking areas for containers, a facility for assembly from kit parts, stacking cranes, computer-driven tracking systems and prime office facilities.

A second container terminal at Chennai Port is planned to start operations in 2009 and the port has also announced plans to build a Mega container terminal. Ennore Port is also expanding, with plans to build a new 1,000-metre container terminal.

The Sattva Business Group is a significant regional logistics operator and has been operating a CFS in Chennai since 2000 (www.sattva.in).