After acquiring Chinese logistics firm Shenzen Dida, Mumbai-based Direct Logistics has firmed up plans to acquire two freight forwarding companies — one each in North America and Western Europe — for a total cost of Rs 400 crore.
Confirming the development, Direct Logistics CMD Sunil Devrani told ET that the proposed acquisition is in line with the company’s plan to enhance its global presence. “The recent increase in trade volume in the US and Europe from India and China would help the company if it has presence in these foreign shores. The acquisitions will help Direct Logistics derive better economies of scale by having operations in India and other countries.”
Direct Logistics acquired Shenzhen Dida for an undisclosed sum last year. The foreign company has sales of around Rs 25 crore. It has a strong presence in Southern China and Hong Kong. Direct Logistics hopes that its Chinese business will contribute around 60% to its total business in three years.
Mr Devrani said Direct Logistics may go for an IPO in the near future. Moreover, the company is also looking at venture capital funding to fund its growth requirements. Sidbi Venture Capital, the venture capital arm of Sidbi, had picked up an 11 per cent stake in Direct Logistics for Rs 15 crore two years ago.
Direct Logistics is planning to set up offices in Shenzhen, Shanghai, Foshan, Beijing, Qingdao and Tianjin. It also plans to set up a pan-Asia network, including countries such as Singapore, Taiwan, Vietnam, Thailand, and to earn around Rs 100 crore from these countries in the next couple of years.
It has ambitious expansion plans at home too. The company plans to set up nine offices in India. The list of these locations include Pune, Jaipur, Ludhiana and Coimbatore. Now, the company operates from all metro cities.
Source: Economic Times