Gati seeks partner for shipping unit

Gati Ltd, an express distribution and supply chain provider, is looking at benefiting from the recent restructuring of its business.

The company is planning to rope in a strategic partner in its shipping division, which was hived off into a separate subsidiary in March . “The shipping business took away significant profits of the company. We expect the business to return to normalcy this year and possibly break even,” the company’s senior executive told analysts.  

The company is also planning to set up a pan-India cold chain network.

With supply chain being company’s core business, Gati is looking at increasing its fleet capacity by 2015. Gati will increase its existing fleet of trucks from 165 trucks to 350.

In February 2012, Gati announced a joint venture with Japan’s KintetsuWorld Express (KWE), in which Gati holds 70% stake. As part of the restructuring plan, Gati has moved its core business to Gati-Kintetsu Pvt Ltd.

Gati said that the company is expecting a modest growth in the current fiscal. In the next two years, Gati hopes to grow at 20% on an annual basis. 

As part of the capital expenditure plan, Gati will invest `185 crore for the next three years. Out of the total investment, `100 crore will go into setting up a cold storage network, while the rest will go into fleet expansion and IT.