Balmer Lawrie to set up logistics hub

Diversified public sector company Balmer Lawrie & Co is foraying into the businesses of logistics hub and construction chemicals and plans to invest more in existing ones including making containers and providing travel services.

The Kolkata-based company has started work on an integrated logistics hub in Vizag, a container making facility in Navi Mumbai and is manufacturing construction chemicals on a pilot basis.

“We have taken a decision to make some major investments of around Rs400 crore in the next two-three years. We have the cash and the resources to invest. One major investment would be setting up a high throughput steel barrel manufacturing plant at Navi Mumbai at Rs100 crore,” Viren Sinha, chairman and managing director, said at the company’s 95th annual general meeting on Wednesday.

The company would invest Rs170-180 crore in the Vizag project, which would be a joint venture with Vizag Port Trust. Balmer Lawrie will hold the majority stake.

The logistics hub at Vizag would be an integrated rail-connected container freight station (CFS), comprising warehouses, cold storages, truck parking facilities and areas for third parties to re-work on their cargo.

“Land has been identified and technical and financial feasibility studies have been done. The project needs an approval from the shipping ministry,” Sinha said.

The company which is producing construction chemicals at two small facilities at Chennai and Kolkata is looking to expand the business.

“By end of this year, the capacities at these places would be reached and beyond that we need to set up new plants. The proposals would be taken up at our next Board meeting,” Sinha said.

Among the existing businesses, the company’s barrel manufacturing unit at Navi Mumbai plans to increase container capacity by about 30%.

“Work is underway, about eight acre of land is with us and completion time would be about 15 months from now,” he said.

Currently, Balmer Lawrie produces about 40 lakh barrels at eight plants that contribute Rs500 crore to the aggregate turnover of Rs2,500 crore.

Balmer Lawrie currently operates three container freight stations. “The facility at Mumbai is spread over 26 acre post expansion, which has just been completed. We have a CFS in Chennai over 18 acre while the one in Kolkata covers 16 acre.”

“We had similar plans for a project in West Bengal also, but it has been dropped as the identified land is not coming through.”

The company is also considering acquisitions in the travel services and leather chemical segments.

“We have set up a travel portal at an investment of Rs25 crore, including a back-office with a 24x7 call centre.”

Balmer Lawrie was looking to acquire a tour firm, but the deal didn’t go through over valuation issues, while a deal for a logistics company didn’t happen after due diligence.

“However, we are still looking at acquisitions in these areas and also in leather chemicals, particularly in finishing chemicals where we don’t have a product,” he said.