The Hindu Business Line : Slowdown hits Blue Dart’s volume growth

Mumbai, Nov. 7 Blue Dart Express, the air express courier and package distribution company, said its volume growth has been impacted with the current economic slowdown.

“Volume growth has been affected for the industry, so also for Blue Dart. If it was growing at 20 per cent earlier, now it is at 16 per cent,” Mr Anil Khanna, Managing Director, Blue Dart Express, told newspersons.

Slowdown in the Indian GDP has also affected volume growth of the logistics industry, he said.

Among the industry verticals that it serves, telecom, automobile and IT hardware have been hit hard.

Pharmaceuticals and FMCG have remained oblivious to the slowdown, he said. “Banking, financial services and insurance segments have also started to see some impact now, after the crisis witnessed in the overseas financial sector,” said Mr Khanna.

Capex plans

The slowdown, however, is not holding back Blue Dart from expanding. It would be making a capital expenditure of Rs 100 crore in 2009 to upgrade its infrastructure across India. This is part of the Rs 1,000-crore capex planned by Blue Dart at 2007-end.

“We want to strengthen our infrastructure at warehouses and airports. The capital expenditure will be met through internal accruals,” he said.

The company plans to spend Rs 1,000 crore over a period of five to seven years. About 60 per cent of this would go towards growing its aviation segment and the rest into setting up facilities and technology, he said.

It has spent Rs 200 crore of the total capex in 2008. Major portion of this has been utilised in induction of Boeing 757 freighter, which will be added in the fleet by December 2008. The rest is towards addition of facilities.

On infrastructure side, Blue Dart plans to set up 58 warehouses by 2010 on the outskirts of key metros to help its shipments move fast. Mr Yogesh Dhingra, Finance Director and Chief Operating Officer, said most of these new facilities will come up by end 2009.

Blue Dart currently operates six freighters, of which three are B757s and three B737s. It will also be launching new products specific to demands of certain industries with time definite requirements.

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