XPS to build new warehouses

Delhi-based Express delivery services company XPS Limited, a wholly-owned subsidiary of Transport Corporation of India, is planning to construct new warehouses and augment capacity at the existing ones, besides increasing its fleet strength.

The move is part of the company's strategy to cash in on the growing corporate retail industry in the country.

"We will be constructing a 50,000-sft warehouse on the outskirts of Bangalore and a 15,000-sft warehouse in Pune, besides creating additional capacity at our existing warehouses at Delhi, Bharagora (Jharkhand), Hyderabad, Indore, Nagpur, Ahmedabad, Chandigarh, Patna and Lucknow. The capacity expansion, with a total area of 1 lakh sft, should be completed by this year end," K Prabhakar, president and chief executive of XPS, said. The expansion would entail an investment of around Rs 10 crore, excluding the land cost, he added. XPS currently has a 3-lakh sft warehousing capacity.

Stating that express door-to-door services are becoming increasingly critical, especially with the boom in the retail sector, he said XPS had actively started adopting IT systems to increase efficiency in its fleet operations.

"We will spend close to Rs 10 crore this year on inducting around 60 company-owned vehicles and enter into agreements for 90 attached (vendor-based) vehicles, besides implementing new tracking technologies in them," Prabhakar said.

The nearly decade-old company has a fleet of 400 company-owned and 800 attached vehicles. Of the new vehicles planned, 15 per cent would be deployed in south.

XPS provides express delivery services to ITC Limited and Siaram's, and partly to Pantaloon's for high-value goods. It is in talks with retail majors such as Reliance and Bharti to offer delivery and cold warehouse chains.

Putting the domestic express delivery services industry at around Rs 7,200 crore (organised Rs 3,000 crore), he said, the company was targeting a market share of about 20 per cent by this fiscal end.

XPS, along with Safex, is currently competing for the second position in the express delivery services market, behind Hyderabad-based Gati. It posted revenues of over Rs 300 crore during the last financial year.

"We have been maintaining a 38 per cent growth in our topline since the last four months, mostly driven by the boom in the retail sector, and are hopeful of achieving revenues in excess of Rs 400 crore this fiscal," Prabhakar said. XPS contributes 25 per cent to the overall turnover of Transport Corporation of India.