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M. Ramesh

Chennai, Jan. 24 Sical Logistics Ltd is close to acquiring a freight forwarding company, Sical’s Managing Director and Group CEO, Mr Sudhir Ragnekar, told Business Line on Thursday. The acquisition is to fill “the only gap in our logistics portfolio”.

Three companies are being evaluated for taking over and talks with one of them is at an advanced stage, he said. While not wanting to disclose the name of this company, he added that it was a 25-year-old freight forwarding company, with a good clientele.

Sical Logistics, through subsidiaries and joint venture, manages port terminals, provides port stevedoring services, operates a fleet of 2,500 trucks and, from next month, would start running freight trains. Getting into freight forwarding business would not only fetch more customers, but would also give it a foothold in the air freight business.

Mr Ragnekar explained that to start a freight forwarding company and build it up would be time consuming. “We have decided to leapfrog into the business by taking over an existing company,” he said.

In February, Sical Logistics will launch its freight train operations. The company had placed an order with Titagarh Wagons Ltd for two rakes, costing Rs 12 crore each. The rakes are to be delivered at Kolkata in February.

A rake is a train of 45 flat beds, each of which can hold two standard containers. A rake, therefore, can transport 90 containers. But that is for starters.

The company intends to provide freight trains through a special purpose vehicle set up for the purpose. Over the next four years, Sical will pump in around Rs 1,000 crore into the business. Most of the money will be spent on buying rakes. “We want to have about 40-50 rakes,” Mr Ragnekar said.

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