Tata’s DIESL eyes topslot in $90 bn logistics space

Tata’s DIESL eyes topslot in $90 bn logistics space

New Delhi: Tata Group’s logistics arm, DIESL on Sunday said it has embarked on an expansion drive to emerge as the market leader in $90 billion domestic supply-chain industry and would consolidate its presence in the retail segment by 2012.

It also plans setting up nine major hubs in the country by 2013 to provide logistics, transportation, warehousing, distribution among other services.

“We are among top four players in the domestic logistic industry and aim to occupy the top slot by 2015. We have added 1 million square feet in 2010 taking the total area of our 176 warehouses to 5.3 million square feet and would set up nine hubs in next 30 months," (DIESL) CEO Ajay Chopra told PTI.

Drive India Enterprise Solutions Ltd (DIESL), a joint venture between Tata Industries and Tata International will set up five hubs in Delhi, Mumbai, Chennai, Kolkata and Guwahati in the next 18 months.

Remaining four will be set up at other strategic locations by 2013, Chopra said, adding that the company was also focussed on bulk logistics in the eastern and north-eastern region, setting facilities for cement and steel production.

Besides consolidating its domestic presence, DIESL may plan looking at overseas markets, especially in the South East Asian countries like Singapore, under Noel Tata who has taken over chairman of DIESL, Chopra said.

Noel Tata, who is considered a possible successor of Ratan Tata for the $70 billion salt-to-software Tata empire took over as DIESL chairman in May this year.

Chopra said that under his leadership, the company was planning to strengthen its position in the retail segment, which at present constitutes only 10% of the firm’s total revenue of 300 crore.

“We are continuously focussing on retail side and plan to gradually take into fold the services from major Tata brands in retail like Westside, Trent Star Bazaar. We are giving stress on technology augmentation, too, to become capable of daily replenishment need of the retail sector," Chopra said.

He said that at present company’s over 80% of its clientele was outside its fold, including brands like Sony and Philips.

Expressing hope that GST regime will boost the domestic sector, he said that with innovative services and technology, DIESL would be well armed to compete with the global players.

Indian supply chain is said to be driven more by tax savings reasons than by logistics efficiency, thereby, driving up the logistics cost.

According to experts, the introduction of the proposed Goods and Services Tax (GST) is likely to give a boost to the domestic logistics sector as the new regime would propose comprehensive indirect tax on manufacture, sale and consumption of goods and services.