The joint venture between Indian logistics firm Gati and Kintetsu of Japan is re-segmenting its business, focussing on new sectors such as FMCG, retail and hospitality.
The JV, Gati-Kintetsu Express Ltd, formed last year, is also expanding its warehousing capacity, with plans to add one lakh square feet over the next six months.
This is in tune with growth in the Indian express industry, which is expected to surge from the current Rs 10,000 crore to Rs 14,500 crore in the next three years (at a rate of 17.5 per cent).
Capital infusion
It was in February last that Gati announced the tie-up with Kintetsu, envisaging the latter’s capital infusion of Rs 267 crore for a 30 per cent stake in the joint venture.
In the middle of the year, the joint venture was in place, with a seven-member board of directors.
“As part of re-segmenting our business, we are looking at new sectors. The auto sector, which forms the core of our business at present, is going through a slowdown. The focus will be on moving beyond our plain vanilla distribution service to cover the entire supply chain management,” Ms Chitra Shinde, president, told Business Line .
In the hospitality sector, it is in the final stages of inking a deal with India’s leading hotel chain, which has 77 properties across the country, for handling its entire procurement and distribution.
At present, its hotels are independently procuring their requirements, often resulting in over- or under-stocking.
Warehousing space
“We will centrally procure their requirements, covering 2,500 different products ranging from shampoos and soaps to bedsheets, other linen and kitchen products. We will be handling inventory management of the entire chain,” she said.
The firm is also in talks with a leading FMCG company to handle its entire import and distribution of chemicals that are required for detergent making.
It has signed up five major customers, including Emerson, Idemitsu, Toshiba and Fuji Electric.
“We are adding one lakh sq ft of warehousing space in Bangalore and Chennai in the next six months. This is apart from the 30,000 sq ft we just added in Kolkata,” Shinde said.
amitmitra@thehindu.co.in