Future Logistics on lookout for partner

Domestic retail major Future Group is planning to rope in an investment partner in its proposed logistics company "� Future Logistics.

The new company, which is expected to have an initial investment of Rs 100 crore, will be a separate entity within the group and will handle distribution and logistics services for all the retail companies within the group. Besides, the company will also offer services to third parties.

Sources said that the group was currently in talks with a few companies including certain private equity players, who were keen to have minority stakes in the new logistics company.

"Since the new logistics company expects to start operation from January 2007, the group will finalise the equity partner soon," the sources said.

While the equity partner was to be given an stake to the tune of 10 to 15 per cent, Future Group would maintain a significant majority stake in the company, the sources said.

Kishore Biyani, Group CEO, Future Group, while talking to the Business Standard in the sidelines of the CII organised Retail Summit 2006 in Mumbai, said that the group was now entering logistics and distribution area by setting up a dedicated logistics company in its fold.

Biyani said that by inviting a partner into the logistics company, the group expected to add value to the business not only in terms of finance but also in the service and business modules.

"We are in the process of identifying an ideal partner, who can provide better synergies," he added.

The group, which is currently a large player in the domestic retail market with more than 30 formats, is handling its logistics and distribution activities through in-house logistics departments within the respective retail companies like Pantaloons, Big Bazaar, Food Bazaar among others at present.

Sources said that as the retail sector was fast emerging in the country, the logistics and distribution services was one of the most promising business concept now. So, the private equity companies were very keen to have investment participation in such companies, added the sources.

The Future Logistics will offer logistics and distribution services to third parties including its current joint venture partners in the retail space.