Safexpress Plans New Highways For Growth

Safexpress provides an online real time information service through its track and trace system and we have blended radio trunking technology along with VSAT and satellite communication for monitoring route vehicle, says Mr Jain.

 The company has also devised a money management services through which it provides the facility for collection of at the time of delivery with the draft being sent to the shipper in a few days, imparting liquidity for working capital.

 Concentrating On Core Business

Yet another strategic move that Mr Jain made was that he transferred the management of its courier business to another partner. I realised that the courier business was not a growth area for us and I gave it on contract to a partner while I am focusing on the core business of logistics management, says Mr Jain.

 Even though Overnite Express (the courier business) has contributed Rs 125 crore to the group business of Rs 350 crore, Mr Jain believes that it would not be a priority for focus it in future. Ill call it yet another business, he adds.

 On the other hand, the company is concentrating on building its strengths in the warehousing area. It is also developing logistics parks in  Navi Mumbai, Bangalore and in Indore. The company is also developing a one lakh square feet of warehousing in Delhi with an investment of Rs 7-8 crore. While this is going to be company-owned warehouses, Safexpress also has outsourced warehouses in different parts of the country.

 

We have the model of, pay-as-you use warehouses as well those on contract, says Mr Jain. He also says that more than 100 multinational companies are using the customised warehousing facilities that Safexpress is providing with all modern amenities.

 

Future Growth

Mr Jain says that at a time when the transport and logistics industry is growing at 20 per cent, Safexpress is growing at 40-45 per cent and he foresees a better growth for the industry as well as the company in the year 2003. With value added tax system in place from April 2003 the industry is expected to grow at 30 per cent and we as major players feel that the industry has the potential to be a Rs 1,000 crore. The current convener of the Confederation of Indian Industry (CII) Committee of Logistics, Mr Jain says that the average running truck time is only 40 kmph because of check and toll points. This speed could be increased tremendously by making the taxes and regulation norms easy, says Mr Jain.

In the future, Safexpress plans to venture into marine business, separate its information technology business and start a global tracking system for the fleet, get into more strategic alliances for its initiatives and perhaps even start a logistics management institute. It also plans to customise services for e-commerce. Does all this suggest huge investments Not really. Most of it will come up in a step-wise manner mostly from internal accruals. We are a debt free company and will maintain that, says Mr Jain.

 

Starting from a simple trucking in 1975, this first generation entreprenuer has come a long way. And he has done it alone as his family was not a part of his venture. It however, remains to be seen how far he will be build upon the brand that he has built in in this highly fragmented industry.

 Source: https://www.financialexpress.com/archive/safexpress-plans-new-highways-for-growth/66611/