Mahindra Logistics Ltd. (MLL) is planning to set up multi-modal warehouses in the south to strengthen its presence in the region, said a top official.
“We will be setting up multi-modal warehouses of half-a-million sq.ft in the south,” said Pirojshaw Sarkari, CEO, Mahindra Logistics. “Since we follow an asset light model, no capex has been planned.”
Eyes freight forwarding
The country’s largest third-party solutions provider said it would enter the freight-forwarding business in Chennai and set up two warehouses measuring one lakh sq.ft. each near Kamarajar Port to strengthen its presence in Tamil Nadu as it is one of the key regions for growth. A few more warehouses would come up in Bengaluru and Hyderabad.
The warehouses would cater to clients in automobile accessories, engineering, consumer and e-commerce, and would become operational by March 2019.
MLL now occupies 7 lakh sq.ft of warehouse space in Chennai and neighbouring locations, of the 13 million sq.ft. the firm has nationwide. Parent firm M&M contributes about 54% of the revenue while the rest comes from other clients, he said, adding the ratio would change to 50:50 next year.
Mr. Sarkari said they are also planning to acquire some niche company in technology and analytics space. However, it would not be acquiring logistics firm to improve its topline.
Detailing the various initiatives implemented by the Centre in the last one year such as the Goods and Services Tax and according infrastructure status, he said they boosted the logistics sector.
“The domestic logistics sector is projected to grow at compound annual growth rate 13% to ₹9.2 trillion by FY20 from ₹6.4 trillion in FY17. Further, the third-party logistics space is expected grow at a 19%-20% CAGR to reach ₹580 billion by 2019-20 from ₹325-335 billion in FY17,” he said.