Safexpress lines up Rs 1,000 cr expansion

Logistics services provider Safexpress plans to invest Rs 800-1,000 crore in five years to expand its operations on the back of the boom in manufacturing and retail activities in the country.

As a result of the expansion, the company's turnover is likely to touch Rs 1,000 crore by 2010.

The company expects to fund its expansion through internal accruals and debt as it claims to have strong bottomline and cash reserves. The privately-held Safexpress has been growing at 35 per cent and posted a turnover of Rs 450 crore in 2006-07.

The company expected similar growth this year as well, Pawan Jain, chairman and managing director, told reporters at the CII Logistics 2007 summit in Chennai.

Safexpress intends to set up logistics parks comprising warehouses, vendor management services, raw material management and finished products storages at 32 locations across the country.

Each park will come up on an area of 25-30 acres. A group company, which is into the realty business, has already completed around 70 per cent of the land acquisition.

The company is also establishing a 3 lakh sq ft logistics park near Chennai at an investment of Rs 35 crore. It already operates a 80,000 sq ft warehouse in Chennai.

Through the expansion programme, the warehousing capacity of the company is expected to be scaled up to 10 million sq ft in the next three years from the current 3 million sq ft.

The company was planning to strengthen its presence in the air cargo segment by taking three Boeing-737 cargo aircraft on lease. These would cover five cities in the country by the next financial year, according to Jain. Safexpress has also placed an order for 380 trucks to add to its current fleet of 3,000 vehicles.

The company doesn't own the vehicles, but hires them through its network of 59 vendors.