NEW DELHI: Eyeing a major chunk of the over Rs 4 lakh crore domestic logistics industry, Tata group's supply chain provider DIESL on Sunday said it will set up nine hubs across the country to emerge as the top player by 2015.
"We have embarked on a massive expansion drive and will set up nine hubs in the next two years. We have 176 warehouses in the country and plan to emerge as the number one domestic logistics provider by 2014-15," Drive India Enterprise Solutions Ltd (DIESL) CEO Ajay Chopra said.
Five out of nine hubs would be set up at Delhi, Mumbai, Kolkata, Chennai and Guwahati in the next 18 months, to be followed by another four in next six months, Chopra said.
Each hub would be set up on an area of 2.5 lakh square feet with further expansion provisions of up to 4 lakh square feet, he said, adding that the land would be acquired on long-term leases.
The 176 warehouses in 27 states are spread across 40.3 lakh square metres and would act as spokes of the hubs.
DIESL, a joint venture between Tata Industries and Tata International, provides logistics, transportation, warehousing, distribution, etc to customers.
Chopra said that 80 per cent of the clientele were outside the Tata fold and included Castrol, Colgate, Sony, Philips among others.
"Unfortunately, 94 per cent of the domestic market is controlled by the unorganised sector and over 85 per cent of the service providers have two or less trucks," Chopra said, adding that DHL occupies the top domestic slot, while DIESL was among top five providers.
He said that the GST regime will boost the domestic sector but major challenges would be from global players, who are eyeing the $90 billion (over Rs 4 lakh crore) logistics market in the country.
However, he claimed that with innovative services and technology offered, DIESL would be well armed to compete with the global players.
The supply chain in India is currently driven more by tax savings reasons than by logistics efficiency, driving up the logistics cost.
Introduction of the proposed Goods and Services Tax (GST) is likely to give a boost to the logistics sector as per experts who say the new regime would propose comprehensive indirect tax on the manufacture, sale and consumption of goods and services nationally.
The company recorded a growth of 125 per cent in its turnover in three years from 103 crore to Rs 232 crore in 2009-10.