Calcutta, Jan. 29: The new owners of TNTs Indian road operations expect the business to grow at a compounded annual growth rate of 35 per cent for the next 4-5 years. The owners — India Equity Partners — had renamed the entity Startrek Logistics India Pvt Ltd.
We believe we can grow the company at 35 per cent CAGR year-on-year for the next 4-5 years, which is a challenging number, said Abhik Mitra, operating partner at India Equity Partners.
Startrek, which caters to the business-to-business (B2B) segment, is keen on a strategic foray into the business-to-consumer (B2C) segment, besides exploring e-commerce and retail opportunities.
According to Mitra, with customers buying hi-tech products from home through online shopping, people would look at a supply chain for convenience.
We have inherited (from TNT) a strong process-driven organisation and want to build on that. We are fortunate to have the full network that TNT was running — the hubs, trucks and pick-up and delivery. This is a significant stake in a market concentrated in the hands of a few players because it is a tough business to build. Building a network takes a lot of investment in the initial years, he added.
As part of its domestic road transport business, Startrek undertakes express delivery of bulk drug formulations for the pharmaceutical industry, spare auto parts, engineering items such as pumps and transformers and hi-tech items such as laptops.
It plans to invest in enhancing service quality and increasing network, besides expanding hubs, infrastructure and IT. It will also add new divisions such as domestic air transport. TNT retained the domestic air business but that doesnt stop us from doing it, Mitra said.
The organised road express industry is currently worth about Rs 2,500 crore. Of this, about 70-80 per cent are held by three to four players such as Gati and Safex.
According to Mitra, the introduction of the goods and services tax will be a major development and shorten the transit time of goods between states.
IEP has three portfolio companies — Fourcee, which is a liquid transportation firm; ColdEX, a cold chain surface transportation company; and Ocean Sparkle Ltd, a seaport management service provider.