Kochi-based Driver Logistics to invest over Rs 150 crore in Karnataka

Bengaluru: Kochi-based logistics company Driver Logistics, on Monday, announced a Rs 525 crore investment plan over the next five years, 30 per cent of which (over Rs 150 crores) will be invested in Karnataka. The Karnataka project includes a 32,000 square feet multi-client warehouse and partial truckload facility (PTL) at Makali in Bengaluru along with seven smaller hubs spread across the state in the next 6 months.  

Karnataka, which contributes over 35 per cent of the company's overall business (its largest market) will also see an additional 1 million sq feet of third-party logistics (3PL) - grade A warehouse - from the company, taking its overall presence to 1.5 million square feet in the next five years, company’s chief executive officer Aqil Ashique told DH. This will be a part of the 5 million sq ft expansion that the company is eyeing across the country in the next five years.  Currently, it has over four lakh sq ft of grade A warehouse space in the state. 

The bootstrapped logistics company, which already has around 350 employees in the state,  will further hire over 150 employees for its Karnataka operations. “We are specifically investing in Bengaluru as it is going to be a corridor connecting South India to the rest of the nation,” Ashique said. 

The company, which is currently working with about 34 enterprises including Godrej, Whirlpool, Nestle, JSW Paints and Ceat Tyres among others, is looking to bring the offline market into the digital fold. “There is a huge offline market today that wants to be digitally equipped to compete with the likes of large ecommerce players including Amazon and Flipkart. That is where we want to help,” he said, adding that even these large enterprises do not have complete visibility across their supply chain. As the ecommerce industry took off in India, even offline players are demanding faster deliveries and visibility across networks. 

“We have 5G internet but our logistics infrastructure is not even 2G,” said Ashique, highlighting the low and slow technological adoption in the segment. “Most of the logistics companies lack information strategy and have an aversion to technology investments, considering it an unnecessary expense. This has to change,” he added.

Driver Logistics

The company also plans to increase its warehouse count from 53 to 100 across its seven states including Karnataka, Andhra Pradesh, Telangana, Kerala, Tamil Nadu, Maharashtra and Gujarat in the next 18 months. “We will expand our presence to another 8-9 states in the next three years, starting with Odisha,” Ashique underscored.

Driver Logistics is also looking at debuting in the international market. Elaborating on the plans, Ashique revealed that the company is in the process of setting up its subsidiary for expansion into the Southeast Asia market commencing operations in Thailand. The company will eventually expand to Saudi Arabia. The chief executive however refused any plans to float an IPO anytime in the near future, indicating that the company is looking at more mergers and acquisitions (M&A) for growth. 

The company that today drives most of its business from 3PL services eventually sees PTL will take over and contribute significantly to its overall revenue, Ashique underscored. It currently owns 95 trucks, with over 100 dedicated freight operators, and aims to utilise a mix of owned and market vehicles for its operations going forward. 

The company also recently built a 1.5 lakh sq ft grade A warehouse worth Rs 47 crore in Kerala, which is expected to be operational in the next four months.