Seeking to capitalise on the flow of trade from what it termed as ‘factory of the world', National Stock Exchange listed and India's first multinational in logistics Allcargo Global Logistics has acquired two Hong Kong based companies engaged in non-vessel owning common carrier business to expand its presence in China.
Talking about the latest acquisition, Allcargo Global Logistics Chairman and Managing Director Shashi Kiran Shetty said his was the first Indian company to make such large acquisition in the logistics sector. “China was missing link in our business strategy and that is the reason we have acquired the two Hong Kong based companies. These companies have business in China and other parts of the eastern region giving us access to such an important trading and export market,'' Mr. Shetty said. The company is one of India's largest publicly listed logistics companies, with a consolidated turnover of over Rs.2,300 crore. Its significant growth has attracted quality investors like the Blackstone Group and New Vernon Capital, two of the world's leading private equity firms, which acquired 14.99 per cent and 6.42 per cent stake in Allcargo, respectively. Mr. Shetty said the company had also acquired two vessels with a dead weight of about 6,500 tonnes through its wholly-owned subsidiary company, thereby marking its entry into the shipping sector. Mr. Shetty said the China strategy included investing more in people and acquiring warehouses there. “China is too important for us. India-China business is bound to grow and we see a huge opportunity in that. We plan to acquire and consolidate in future and have already done six acquisition so far,'' he said.
He said the company, which had invested nearly Rs.280 crore in 2010-11, had outlined an investment of Rs.300 crore for 2011-12. “We have set aside Rs.40 crore to establish a pan-India presence with expansion to Hyderabad, Dadri, Pithampur, Nagpur and Bangalore through strategic joint ventures. We plan to set up offices in Saudi Arabia and the U.S. during 2011,'' he stated.
