TCI to invest Rs 300 crore in expansion over three years

New Delhi-based Transport Corporation of India (TCI) Group, a multi modal logistics services provider, is planning to invest Rs 250 crore - Rs 300 crore over the next three years to set up more warehouses, enhance its fleet strength and upgrade IT systems.

TCI is also planning to double its turnover to over Rs 2000 crore by 2009.

Talking to mediapersons, Vineet Agarwal, executive director, Transport Corporation of India Ltd (TCI), said that it was likely to invest between Rs 50 crore and Rs 100 crore every year in expansion of its marine and road transportation fleet and in setting up warehouses and IT systems. In the past, it used to spend less than Rs 50 crore a year for expansion.

Stating that there would be huge demand for warehouses, he said that TCI was planning to set up a modern warehouse in each region and also in the central part of the country.

A modern warehouse means a warehouse with a height of 35 ft, seven-storeyed racking system, temperature-managed control systems and other sophisticated systems. It will also function as a cold storage facility, he added.

However, the group had not finalised its plans and it was still in the discussion stage, he said. The setting up of modern warehouses would also depend on customer acquisitions, he added.

Agarwal said that the company was growing at 15-20 per cent and the group was likely to end the current fiscal with a turnover of Rs 1,000 crore.

He said that non-implementation of value added tax (VAT) would impact not only the business of companies but the country as a whole.

The long term impact of VAT in rationalisation of tax structure is expected to benefit logistics companies to convert their state warehouses into larger regional warehouses and subsequently lower inventories and deliver the goods to their customers faster.

With over 1,100 offices, the TCI Group moves about 1.5 per cent of India's GDP by value (about $10 billion) every year and offers a complete range of services, starting from moving a 50 gm document to a 500 tonne over dimensional cargo, he said. TCI Group will be owning and operating about 5 million sq ft of warehousing space across the country by the end of this fiscal.

Its fleet size in marine and road transportation include four ships (owned), containers 600 (owned), 850 trucks (owned) and 2,500 vendors. The group employs about 5000 people.