Allcargo, CCI form supply chain JV; eye Rs 1k cr biz by 2020

Mumbai, Aug 25 (PTI) Eyeing opportunity in the contractlogistics space post-GST, Allcargo Logistics today said it hasdemerged its supply chain management and freight forwardingbusinesses to form a joint venture with chemical warehousingcompany CCI. The JV called Avashya CCI Logistics, is targeting arevenue of Rs 1,000 crore by 2020 from the present Rs 450crore, Allcargo Chairman Shashikiran Shetty said. In 2015-16, the contract logistics and freight forwardingverticals contributed around Rs 300 crore to the company’stotal revenue of Rs 5,800 crore, Shetty said. He said policy moves, especially the progress on the Goodsand Services Tax, increase the opportunity for offeringintegrated end-to-end logistics solutions to companies acrosssectors for which the JV has been formed. The publicly traded Allcargo will be owning 62 per cent inthe joint venture, with the rest will be held by theprivately-owned CCI’s promoters, he said. The JV is targeting customers in the auto, engineering,retail, e-commerce, chemicals and pharma players, and willstrive be the third biggest company in the contract logisticsspace by 2020, he said. Stressing that it will be an asset-light business, whereinthe JV will be renting out space, Shetty said the newly-formedcompany is targeting to have 5 million sqft of warehousingspace to be made available to clients. Shetty said business of the bigger partner Allcargo willnot be affected due to this and added there is a complimentaryrole which it can play. He said even before the progress on the GST, the contractlogistics opportunity is estimated to be around USD 5 billionwhich is expected to grow at a faster clip once the GST is inplace. PTI AA BEN DKABKRDS