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Mahindra Logistics on the move for acquisition in SE Asia

Of its Rs 3,860 crore revenue posted in 2018-19 fiscal, freight forwarding accounts for only 5 % of the total revenue.

, ET Bureau|
May 15, 2019, 02.35 PM IST
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Agencies
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Mahindra Logistics is planning to bring down the share of Mahindra group companies to less than 50% of its turnover by 2021.
KOLKATA: Mahindra Logistics Ltd (MLL) is looking for acquisition in south east Asia to strengthen its freight forwarding business.

“We would prefer freight forwarding companies that have larger market presence across south east Asian markets. Though we are also open to joint ventures, we would prefer firms with a 'large market presence' across south east Asia including Indonesia, Thailand and Singapore,” company CEO Pirojshaw Sarkari, told mediapersons.

Of its Rs 3,860 crore revenue posted in 2018-19 fiscal, freight forwarding accounts for only 5 % of the total revenue. For global logistics players, freight forwarding contributes up to 25 % of their revenues. "If we have to clock a turnover of Rs 6,000-crore company over the next few years, freight forwarding has to contribute 10 - 15 % to revenue," Sarkari pointed out.

Since it is focusing more on value added services such as warehousing and in-factory logistics, which have higher margins than transportation, Mahindra Logistics is also planning to expand its warehousing space. The company has chalked out plans to add 2 million square feet (sq.ft.) of space in the current fiscal spread across Delhi NCR, Bangalore, Kolkata and Mumbai from 15 million sq.ft. now.

By June this year, it hopes to operationalise its first automated integrated sorting centre at Dankuni in West Bengal’s Hooghly district.”This centre will do everything, from unloading to sorting and packaging. West Bengal and the entire eastern region is key for MLL. Kolkata continues to be a transit logistics gateway for the entire east,” he said, adding it would also improve accessibility to the northeast.

An integrated third-party logistics service provider, Mahindra Logistics is also studying the feasibility of using inland and coastal waterways for goods movement. “Soon, we will enter this mode which is considered the world over as the least polluting and cheapest transport mode. We hope to trial-run cargo movement by end of this year,” Sarkari added.

Incidentally, MLL is planning to bring down the share of Mahindra group companies to less than 50% of its turnover by 2021. At present, 54% of the business came from Mahindra Group and 46% from non-Mahindra firms. “We have reduced the share over the years. We aim to bring it to less than 50% from Mahindra Group companies by 2021 when a Rs 6,000 crore turnover is being targeted,” he said.
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