India's PIL in JV with Saudi-based Nationwide Group
India's logistics behemoth Patel Integrated Logistics Ltd (PIL) has teamed up with Saudi Arabia's renowned Nationwide Group to develop Pivot Logistics.
The joint venture has been floated to tap the emerging opportunities in the largely-fragmented logistics sector of GCC and at the same time to add new dimension to the ecosystem.
Under the Memorandum of Understanding, PILL will share its know-how, manpower and technology to set up and manage the end-to-end operations of the venture. In the innovative collaboration, PILL will not make any capital investment, but will earn 19.85% sweat equity for applying their superior know-how in managing the venture's operations.
Pivot Logistics will set up a network of 50+ destinations with operations in warehousing and logistics software to begin with and is expected to generate revenue of around US $7.4-million annually within 2-3 years of operation. Further, they are in the process of developing a technology that will grow their network many-fold and ease scalability. Due to their patent-pending technology, the details have remained classified.
"With the lucrative margin available in the Gulf countries, the JV is expected to significantly enhance the bottom line of PILL," said PILL Executive Vice Chairman Areef Patel.
By 2017, the venture will begin operations in Dubai and then across the Gulf countries by 2018, to tap the full potential of the market opportunities arising in the GCC; most notably, the mega Dubai World Expo 2020 and the Qatar 2022 FIFA World Cup.
Utilising proprietary logistics technologies, will make PILL, through its JV, one of the earliest Indo-Arab logistics software providers in the region while simultaneously making Pivot Logistics a regional tech pioneer.
"Saudi logistics sector is highly unorganised with low penetration of technology and we see bright prospects of growth, given our track record and initiatives back home," Patel said.
After setting up the network for warehousing and logistics software the company will move into air cargo in the line of Patel On Board Couriers (POBC) and marine sector in the third phase.
"Our vision is to be a capital player in solidifying the role of logistics in any company's success regardless of size or cycle stage. As logisticians, we simplify to profit and minimize to grow," said Pivot Logistics' General Manager and part owner Hazem Alnajar.