Forays into cold chain logistics segment
Mumbai, Nov. 22
The port-based container logistics company Gateway Distriparks Ltd (GDL) is foraying into the cold chain logistics segment, expecting a surge in domestic demand for movement of frozen and chilled food in the wake of the boom in the retail sector.
GDL on Wednesday announced the acquisition of a majority stake of 50.1 per cent in Snowman Frozen Foods Ltd, which has a pan-India cold chain distribution network, including 90 reefer trucks and 16 cold stores. The acquisition was made for a consideration of Rs 48.12 crore and will be funded out of its recent GDR proceeds.
Mr Gopinath Pillai, GDL's Chairman, said with the acquisition, the company has entered into a share subscription and shareholders agreement with Snowman and its present shareholders Mitsubishi Corporation, Mitsubishi Logistics Corporation and Nichirei Logistics Group of Japan. The three shareholders will continue to hold a total of 48.69 per cent shareholding in Snowman.
Snowman, which notched up a revenue of Rs 12 crore, expected to earn a total revenue of about Rs 25-30 crore in the current fiscal.
Mr Pillai said GDL acquired 41.8 per cent of equity at Rs 10.50 per share and the balance 8.3 per cent from existing shareholders at Rs 17.50 per share. Hindustan Lever, which was a shareholder in Snowman, has sold its stake and has exited from the company. "HLL is of course going to be a major user of our cold chain facilities," he said.
New biz model
GDL will soon chalk out a new business model for Snowman, after undertaking a technical audit to bring out the fresh requirements. It will also add fresh value to the services, like getting required export certifications.
On its part, GDL will set up cold storage facilities at its network of Container Freight Stations, which will be leased out to Snowman.
Snowman, which moves about 9,000 tonnes of frozen and chilled products every month within India, bundles the entire spectrum of the supply chain from procurement to storage and right down to retail distribution.
The services include primary transportation from the vendor locations, storage, inventory management, invoicing, delivering to retail outlets, payment collections and banking.