Turkish firm Celebi to invest $80-100 m in India

Celebi Holding, the Turkey-based ground handling and cargo services provider, is planning to invest $80-100 million in the next 18 months in India.

The firm is eying a 50% year-on-year growth in revenue from ground handling operations in India while in the cargo business it hopes to maintain its existing revenues this year.

“We will be doing an investment of around $40-50 million on the cargo side. On the ground handling side it will depend on the size of the services that we are going to provide. That investment can be between $20 million and $30 million,” Can Celebioglu, chairman of Celebi Holding told DNA.

Amber Dubey, director-KPMG Advisory, sees the investment as an excellent move on the cargo handling side. “There is a huge potential for cargo handling in India. Some of the airports in the world handle much more than what India together handles. On the ground handling there is some amount of uncertainty due the current issues. But a solution could still be worked out,” he said.

Earlier this month the Supreme Court decided to maintain a “status quo” till July on the dispute over ground handling services at the Delhi, Mumbai, Bangalore, Hyderabad, Kolkata and Chennai airports. The SC order came in response to a petition filed by private carriers which challenged the government’s decision on restricting their rights in providing ground handling.

But Celebioglu does not view this as much of an issue. “The system all over the world is to concentrate on airline’s own business. Ground handling is not their core business. Airlines give their ground handling to the third parties due to efficiencies and economies of scale,” Celebioglu said.

Dubey said Celebi’s further investment would also help the company maintain parity with other players competing for the international cargo share at Delhi.

The firm has presence in Mumbai airport (ground handling) and Delhi airport (ground handling and cargo operations). In India, Celebi provides ground handling services to primarily international flights including those of Lufthansa, Air France, Jet Airways, Kingfisher Airlines, Turkish Airlines. Annually, it handles close to 25,000 flights. The firm has so far invested $30.2 million ($17 million in Mumbai and $13.2 million in Delhi) in ground handling.

Kingfisher Airlines is the only domestic client of Celebi. But Celebioglu hopes in the time to come they will have more clients.
Celebi generated $30 million from ground handling operations in India last year. “At the ground handling side we are developing our position. We are hoping for more customers to join us and double our existing presence. This $30 million revenue should go up to $40-45 million by end of this year,” Celebioglu said.

Celebi took over the Delhi Cargo Terminal management in November 25, 2009, by bagging the Delhi Cargo Terminal licence. The agreement includes developing, modernising, financing and operating the existing cargo terminal. So far the firm has invested $50 million. “Currently we are generating $70 million turnover from the cargo side in India,” said Celebioglu.

Celebioglu did not give a revenue growth target for this year, but said on the cargo side in India, Celebi hopes to maintain the existing position. “We do not know what we are going to lose to competition. But we are trying to keep up as much as possible,” Celebioglu said.

The writer was in Istanbul at the invitation of Celebi Holding.