Allcargo Logistics scouts for buyout opportunities



MUMBAI: Logistics, which acquired Swedish logistics firm Nordic last year, continues to explore more buyout opportunities in specific geographies, the company has said. last year made its second large overseas acquisition, acquiring a 65 per cent ownership in Nordic, the Swedish logistics firm and a market leader in the LCL and rail freight consolidation segment in the Nordic region.
“When we look for acquisitions, we are looking for a very strategic acquisition to specific geographies,” said Ravi Jakhar, Chief Strategy Officer at Allcargo Logistics. He said the acquisition of Nordic last year, which is a strategic acquisition, has been very successful for the company.
“In the coming quarters also, we will continue to evaluate opportunities, strategic acquisitions, which can help us further consolidate our market leadership,” he said.

Allcargo operates its international supply chain business (MTO segment) business under ECU Worldwide. Its multi-modal transport business comprises less-than-container load (LCL) consolidation, full container load (FCL), imports and exports forwarding, air freight, movement of over dimensional and project cargo and multi-city consolidation-exports and imports.
During the June quarter, Allcargo Logistics reported a consolidated revenue of Rs 5,675 crores, driven by its international supply chain business, MTO segment, delivering a robust growth of 70 per cent year-on-year at Rs 5,001 crore.
The LCL (Less-than-Container Load) consolidation involves the movement of LCL cargo from a Inland Container Depot to a nominated hub terminal under customs seal, usually in a domestic container of some sort.
The LCL accounts for two-thirds to three-fourths of the business while the FCL (full container load) services the remaining one-fourth to one-third.
During the June quarter of this fiscal, the LCL volume growth spiked 70 per cent year-on-year while the FCL (full container load) volume grew 10 per cent year on year.
“LCL consolidation has natural hedge built into it. When there is a little bit of sluggishness in demand, and there is a little bit of volatility, it is the LCL business which has a tendency to grow because many people move to LCL from FCL,” said Jakhar.
Therefore, the company is well-placed to tap into its competitive advantage and grow its business irrespective of the headwinds of tailwinds, he said. He said that in times of high inflation regime, or recessionary environment, people usually move to safer currency (dollar) and its appreciation has a natural hedge. “As an Indian company, these are the times when we find the dollar appreciates as well, which also benefits us. Therefore, it balances out the recessionary pressure on the bottomline, ” Jakhar added.
“Last two years, we have been able to grow the LCL business also on account of market share gains and acquisitions as well. From a company’s perspective, we have equal opportunities to grow ( both LCL and FCL business), Jakhar said.
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