2012 Automotive Logistics Special: TVS Logistics adopts cautious growth path
The decision to expand comes on the back of aRs 1,500 crore turnover in 2010-11, a growth of 50 percent year-on-year.
The decision to expand comes on the back of aRs 1,500 crore turnover in 2010-11, a growth of 50 percent year-on-year. In the past five years, the eight-year-old company has seen a CAGR of around 25 percent. However, with the current melancholic economic scenario, the service provider is cautiously choosing its moves, one of which is to include non-automobile manufacturing companies to its clientele.
Enunciating further on the current slowdown, R Dinesh, managing director, says that value addition is of the utmost importance to weather this bottom of the curve phase. “The current slowdown, if it continues, will affect our growth. But, by adding value to our customers we hope to maintain a reasonable rate of growth,” he says. However, he quickly reiterates that it is out of anybody’s hands, adding, “We will have to be cautious and hope that the overall economy will start picking up soon.”
In the past few months, the Chennai-based company has taken some serious steps with a long term perspective, including raising of private equity funding of nearly Rs 250 crore. Another important step was to appoint Gordon Silvey as the global head for customer development. The appointment of Silvey forms the foundation of global expansion for the company. As Dinesh puts it, “Gordon is helping us develop a robust customer engagement model which includes bringing in global best practices. He is working with our team to deepen our engagement with both existing and new customers and enhance global encirclement.”
As mentioned earlier, the tempestuous market condition has seen the company expanding its operations outside of the automobile sector. Dinesh emphasises that in a competitive market, focusing on just one service is dangerous. He says, “It is not just transportation but also managing the end-to-end supply chain which matters and we will be among a few players who are able to offer a complete materials management solution (including taking ownership of the goods) to our customers.” His company also transports components that are meant for everything from production to aftermarket sales, including finished goods and its clientele includes OEMs that operate out of both multiple and single locations in the country, like Ashok Leyland, Tata Motors, Ford India and Renault-Nissan.
Asked about the larger picture, Dinesh has a few wise words: “The logistics sector needs to be recognised as being a valuable service provider instead of just a contract labour provider.” And the key to this recognition, he says, is the improvement of certain basic necessities. “Factors like infrastructure improvement, especially with regard to the last-mile connectivity to the port will help the automotive supply chain improve more efficiently. Secondly, there is a widening skill gap. This extends from the lower level of skills like drivers and forklift operators till the senior management jobs itself.”
As far as TVS Logistics is concerned, it has its plans for the future etched in stone. Seen on the back of how the entire automobile industry is confident that the current slowdown is a temporary glitch in the overall rosy Indian growth story, TVS Logistics seems to be making all the right moves.
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