The Hindu Business Line : TM Intl to focus on warehousing, distribution

TM International Logistics Ltd (TMILL) has identified warehousing and distribution as the thrust area for future growth. The company is a Tata Steel subsidiary floated in partnership with IQ Martrade GmH of Germany to provide logistics-related services.

"Warehousing and distribution is an area, which holds out big promise but whose import is yet to be fully realised in the country," Mr S. C. Saxena, Managing Director of TMILL, told newspersons here on Tuesday. "TMILL is working out the details as to how to go about it," he said, adding that the company would explore opportunities both within and out of the country through a strategic alliance, preferably with a foreign partner yet to be finalised.

As a first step towards a foray into warehousing and distribution, there is a proposal to launch an inland container depot/ container freight station at Haldia. "Gradually, we will expand our business to other places, depending on growth," Mr Saxena said.

Currently, shipping (including chartering), port operations and freight forwarding (including Customs clearance) are the major activities of the company. Port operations account for 48 per cent of the total business of Rs 206.6 crore (2004-05), followed by freight forwarding, 43 per cent, and ship chartering, nine per cent. Mr Saxena has targeted a turnover of Rs 1,000 crore by 2008-09 — to be contributed by shipping (including chartering) to the extent of 47 per cent, port operations, 33 per cent, and freight forwarding, 20 per cent. The proposed warehousing and distribution will form part of the freight forwarding business.

The targeted growth, he said, would be achieved through acquisitions of terminals for dry bulk operations within the country and outside, particularly in neighbouring countries such as Bangladesh, Sri Lanka and Myanmar. It plans to enter into terminal operation in these countries, preferably through strategic alliance with a local partner (subject to approvals of the authorities concerned.)

The company will augment the existing infrastructure at various ports by acquiring berths and installing equipment in these berths, owning and operating vessels, chartering on a long term basis and undertaking warehousing and distribution.

"We propose to purchase four vessels, Panamax and Handymax types, and acquire on charter another 10," the Managing Director said. However, much would depend on the market condition.

TMILL has proposed to invest Rs 350 crore in the next three years and the funding would be by way of an initial public offering and loans. "In another six months, we will firm up the size and timing of IPO," he said, adding, "We have to get the approval of the board first." The size of IPO, though not yet finalised, might be around Rs 150 crore.

Mr Saxena declined to accept that TMILL was a captive company of Tata Steel. "True, Tata Steel now accounts for 60 per cent of our turnover and non-Tata Steel business, the balance 40 per cent. But by 2008-09, the figures will be just the opposite, with the non-Tata Steel business growing to 60 per cent and the Tata Steel business dropping to 40 per cent, though on a much higher turnover than at present," he said.

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