Their joint venture, Aegis Vopak Terminals, will operate a network of eight terminals located in five strategic ports along India’s east and west coasts. Together, the network will offer a total capacity of about 960,000m³ and will be, said Vopak, one of India’s largest independent tank storage companies for chemicals and LPG.

The transaction entails two separate legal entities that Vopak will simultaneously buy into. It will hold a 49% stake in Aegis Vopak Terminals, while Vopak’s existing terminal business in Kandla – CRL – will become a wholly owned subsidiary of the joint venture.

In addition, Vopak will acquire a 24% shareholding in Hindustan Aegis LPG – an Aegis partnership with Japan’s Itochu. After the transaction, Aegis will own 51% and Itochu will continue to hold 25%. Aegis’ network of terminals at in Kandla, Pipavav, Mangalore, Kochi and Haldia covering the west and east coast of India will also be added to the joint venture’s asset base.

Vopak said the enterprise value for its stake in the joint ventures will be €185 million, plus €15 million depending on the fulfilment of certain conditions. The deal is expected to close early in 2022, subject to customary closing conditions.

"This is an investment in a growth market and by joining forces with Aegis we aim to deliver growth over the next ten years in line with the new joint ventures’ and India’s ambition for LPG,” said Eelco Hoekstra, chairman of the executive board and CEO of Royal Vopak. “We are very excited for this new partnership. Aegis is a reputed local partner with a ready organization and proven track record of conceiving and executing tank farm assets in strategic locations along the Indian coastline."

Raj Chandaria, chairman of Aegis Logistics, added that the joint venture will “accelerate the growth of Aegis in the terminals business and has the potential to allow Aegis to diversify into new areas of gas storage such as LNG and other energy projects including renewables in partnership with the world’s leading independent tank storage company.”

The partners are predicting that revenues of both joint ventures will grow at an annual average rate of about 6% in the first five years. LPG income will account for about 75% of total revenues, driven by rising demand, while imports of liquid chemicals into India are also set to grow. The joint venture also has a pipeline of growth projects, both brownfield and greenfield.

Author: Elaine Burridge, Freelance Journalist