Third-party logistics operator LP Logiscience is planning to further expand its warehousing operations into Tier II and Tier III cities and plans to spend up to Rs 75 crore in such new markets, said Varun Gada, Director at LP Logiscience.
LP Logiscience is part of Liladhar Pasoo Group which is engaged in logistics and supply chain management and operates multi-client facilities in warehousing centres such as Bhiwandi in Maharashtra, wherein it operates Grade A warehouse.
“We would be open to Rs 50 to Rs. 75 crore acquisitions. It could be three acquisitions of Rs 15 crore each or it could be one single acquisition of Rs 75 crore,” said Gada.
Other than pure outright acquisitions, LP Logiscience is also open to undertaking mergers with strong players in Tier II and Tier III, added Gada.
“Say 40,000-50,000 square feet of space in a location like Guwahati, but if he (operator) is doing a fantastic job, we are open. That is our stepping stone into that market,” said Gada.
The warehousing business of LP Logiscience is currently sized at 3 million square feet and has presence in Nagpur, Indore, Ahmedabad, Ankleshwar, Pathankot, Gurgaon and recently in Coimbatore.
Gada highlighted that while major warehousing centres such as Bhiwandi remain their focus area, the growth in consumption in India’s small cities and towns is a major factor for the company to look out for acquisition and merger opportunities.
“There is great consumption in all these Tier II, Tier III cities,” said Gada.
“When consumption is growing you want to get the product faster to the customer. What better way could it be than to have a local warehouse. Instead of supplying from Bhiwandi I would rather have a warehouse in Nashik itself to cater to the Nashik market,” added Gada.
LP Logiscience’s major clients include Asian Paints, UPL Ltd, Total Energies, IMCD, Pidilite Industries, Momentive Performance Material, Nivea India, among others.