Arshiya lines up Rs 2,210 cr expansion

Arshiya International, the supply chain and logistics solutions company, is investing Rs 2,210 crore in the first phase of an expansion plan which includes setting up free warehousing trade zones (FWTZs) and strengthening its rail network.

Of the planned investment, Rs 1,450 crore would be debt and rest Rs 760 crore would be equity.

Ajay Mittal, chairman and managing director, Arshiya, told DNA the company has already tied up Rs 1,045 crore debt and raised Rs 515 crore equity. “We need to raise Rs 245 crore more as equity,” he said.

The logistics firm has started work on the initial phase of its FWTZ projects in Mumbai, Delhi and Nagpur, which would be operational by April 2011.

“Of the Rs 530 crore earmarked for the Mumbai FWTZ, we have spent Rs 190 crore; for Delhi we have spent Rs 80 crore of the planned Rs 435 crore. In Nagpur, where we plan to invest Rs 315 crore, Rs 70 crore have been spent,” Mittal said.

Arshiya is also planning “distriparks” (warehouses for local distribution of goods) and
has invested Rs 75 crore out of a projected investment of Rs 300 crore.
Other than warehousing, the logistics company is in its initial phase of expanding its rail network.

“We are planning to add 30 rakes to current operational seven. For this, we have earmarked Rs 630 crore with the necessary infrastructure and have already spent Rs 240 crore. These rakes will be operational by FY2011,” Mittal said.

The company posted a 5.2% rise in its consolidated total revenue of Rs 100.67 crore for the quarter ended June 30, 2009 as against Rs 95.73 crore in the preceding quarter.

According to a report by rating agency Crisil, the container freight station/ICD, warehousing and cold storages segments  are expected to grow from an estimated turnover of Rs 31,200 crore in 2008-09 to Rs 49,800 crore — a CAGR of 9.8% — till 2013-14.

The report said the proposed implementation of goods and service tax, and development of logistics parks and FTWZs will accelerate formation of  regional hub-based infrastructure and an environment conducive for rationalising the logistics network.