DP World acquires 90% stake in Continental Warehousing Corporation
DP World and the National Investment and Infrastructure Fund (NIIF) have acquired a 90% stake in India’s Continental Warehousing Corporation (Nhava Seva) Ltd (CWCNSL), an integrated multimodal logistics company.
The investment was made by Hindustan Infralog Private Limited (HIPL), a joint venture between DP World and NIIF, as part of a planned US $3-billion worth of investments into India’s logistics sector.
CWCNSL’s founders, the Reddy family, will retain the remaining 10% shareholding and will remain involved in the business operations, according to a press release.
The purchase consideration is below 5% of DP World’s net asset value as of FY20171 and it is the first investment of HIPL, the recently created investment vehicle between DP World and NIIF.
CWCNSL was founded in 1997 and is a leading integrated multimodal logistics provider of warehousing, container freight stations (CFS), inland container depots (ICD), private freight terminals (PFT) and integrated logistics solutions.
CWCNSL’s logistics network is spread across key strategic locations in India covering a total area of over 400 acres and providing more than 660,000 TEU capacity.
In addition, CWCNSL’s wholly owned subsidiary Delex Cargo India Private Ltd provides door-to-door logistics solutions including freight forwarding, 3rd party logistics, express logistics and hub-and-spoke model of delivery across 54 locations in 40 cities.
In India, DP World has been operating container port terminals since 1997. It is currently present at six locations in India with over 6 million TEU of gross capacity and also operates container trains connecting ports to the hinterland.
The current operations of CWCNSL are highly complementary to DP World’s existing business in terms of the business model and geographic footprint providing significant new revenue opportunities over the long term.
“We are delighted to start our recent partnership with NIIF with this strategic acquisition to develop logistics and warehousing solutions to support India’s growing economy and trade,” said Sultan Ahmed Bin Sulayem, group chairman and CEO, DP World.
“As a global trade enabler, we aim to grow in complementary sectors of the global supply chain, which includes inland container terminals, freight corridors and logistics infrastructure,” he added. “The acquisition of Continental Warehousing Corporation provides us with a scalable platform to accelerate growth in the rapidly evolving logistics sector in India.”
Adi Keshav Reddy, founder, CWCNSL, said: “The strategic partnership with Hindustan Infralog and its parent DP World will have huge potential for logistics infrastructure in India and will enable CWCNSL to enhance its end-to-end value-added services to customers.”