Sitics Logistic bullish on new policy initiatives

Sikander AM, Founder and CEO of Palakkad-based Sitics Logistic Solutions is bullish on government initiatives in India’s logistics sector, saying that it will help improve and bring down the total logistic costs to trade.

The Indian logistics market is estimated at $215 billion and is slated to grow at 10.5 per cent by 2025. The government is framing policies to improve and reduce the logistic cost by a few percentage points from the overall cost of logistics in the GDP, he said.

Facing challenges

However, Sikander highlighted some of the challenges faced by the industry, including fragmented market, poor infrastructure, dearth of skilled workforce and poor technology adoption. Besides, domestic companies are facing competition from MNCs with their exposure to different markets and deep pockets. Despite this, he pointed out that domestic companies have a better understanding of the Indian market and can operate better in the local markets in many cases.

Covid, he says, had its impact on the industry with ups in certain sectors and downs in others. E-commerce and technology-driven businesses fared well during the crisis. “We have posted a 25 per cent growth last year, garnering a revenue of ₹140 crore,” he said.

“For us, e-commerce remains the biggest revenue generator, in addition to transportation and warehousing. The share of e-commerce is more than 50 per cent and we are expecting strong growth in this sector.

To start growing, we have lined up new business models of D2C (Direct to Consumer), D2R (Direct to Retailer) and CBEC (Cross border e-commerce),” he added.

Technology adoption was inevitable in lockdowns and led to traction in online businesses. Yet, consumers miss the charm of physically shopping for goods.

Post-pandemic, the scenario should return to pre-Covid days, but online purchase will see a big growth, he said.

Company investments

Sitics Logistic Solutions recently acquired a cold chain distribution company and also invested in a drone company, which Sikander said will help ‘platformise’ the company’s solutions in 3PL, offering big advantage to the clients.

The cold chain company, he said, has the resources to move and store goods at a controlled temperature and sectors such as food, pharma, QSR, agriculture and HORECA would benefit.

The investment in the drone company is strategic and Sitics will be one of the first movers in the market. With the government liberalising the drone market, the sector is expected to grow very fast, he said.

“With investment plans of ₹50-100 crore in organic and inorganic growth, we are aiming to become one of the top 10 companies by 2026 with a turnover of ₹1,500 crore,” he added.

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