Gammon floats logistics firm, to invest Rs 300 cr

Infrastructure major Gammon India has set up a logistics company and plans to invest Rs 300 crore in the first year, seeking to tap the fast growing organised retail market.

"There is hardly any organised player in the logistic space. So there is a lot of scope," Gammon's VP-Logistics Piyush Chaturvedi, who is setting up a team to run the logistics business, said.

Gammon's logistics company would have a pan-India operation and expects to begin the business from January next year, Chaturvedi said.

"We want to become a third party logistics player. So we would be investing Rs 250-Rs 300 crore in the first year at 10 to 12 locations," he said.

A third-party logistics provider is a firm that provides outsourced or third party services to companies for part or sometimes all of their supply chain management function.

"We want to take care of the entire supply chain of our customers. We would like to handle all the logistics from the farm to the end consumer," he said.

As a first step, Gammon would concentrate on setting up cold chains and warehouses keeping in mind the retail sector and the company's presence in ports. "We are present in a few ports in the country. So, we are setting up cold chains and warehouses," he said.

Gammon has developed two multi-purpose berths at the Visakhapatnam Port and has been selected to develop the Offshore Container Terminal at Mumbai Port Trust.

The $60 billion Indian logistics space is attracting many players including shipping companies like Shreyas Shipping and Essar Group.

According to industry data, the cost of surface logistics is estimated at between 9-23 per cent of the GDP.