In order to capitalise on the booming multi-billion dollar third-party logistics (3PL) service sector in India, Redington (India) has decided to hive off its supply chain logistics (SCM) business into a seperate business entity.
The company has proposed to transfer the SCM business as a ?going concern? to a wholly-owned subsidiary and has sought shareholders? approval for the same. The company may float a new entity for the SCM business in the next two to three months, sources said.
The company, which has set up automated distribution centres at all metros and other places, has also decided to lease out the same to the new entity to utilise the capital already invested.
The company said that considering the specific and diverse needs of different businesses, there is an increasing need to distinctly focus the efforts and resources towards growth and development of each line of business. Started off nearly five years ago, the SCM business has begun to generate decent revenues with a number of corporate as well individual clients.
Company officials were not immediately available for comments. Market sources pointed out that the 3PL service sector in India is expected to cross $5.5-billion mark by 2014-15 and expects to grow with a CAGR of over 25%.