Exploring market with contract logistics
With the economic environment ripe to bring international professional logistics scenario in the country we turn focus to the joint venture between Apollo Group and FIEGE Group offering comprehensive services since November 2012. Heinz Fiege, Managing Par
Q What opportunities do you see in current Indian logistics market?
Heinz: India is growing fast and has a lot of potential. China’s logistics scenario is much advanced and the same structure can be built by India within the next few years. However, this needs proper planning and tie ups with successful foreign companies for quick services.
In my understanding, logistics providers are strategic partners working jointly with their customers to improve processes in the value chain and to meet and exceed customer expectations. This includes adjustments and specifications of products to certain market demands. Fiege's value added services and its holistic logistics approaches create competitive advantages and give you the time to focus on your core business.
Jan: We are excited about India as a market as it is developing fast. I am convinced with the governmental changes, new legislation, investment into infrastructure which is badly needed and GST and other bureaucratic environment which will help logistics sector to grow.
On the other side, customers are also developing and Indian companies are becoming more open to that idea of outsourcing part of their supply chain know how which can bring international professional logistics scenario in the country. In order to benefit from these changes 3PL logistics or contract logistics is needed in a partnership.
QDo you feel that we are ready for GST implementation?
Raaja: No. We have a long way to go because there is too much of work that has to happen in the background. We have to figure out all the state taxes or city taxes and octrois and all those kind of barriers for the free flow of goods. It is important to figure out who will get taxed where and will the goods get taxed at source or crossing a border or in the market. GST will be beneficial when all other crucial factors fall into the right place, then there will be better planning. Manufacturing companies or consumer led companies will plan their product in a better manner. However, with better planning there will be cost saving.
QWhat is your strategy to tackle the cost issues in India?
Raaja: Infrastructure has to play a very important role and companies like Fiege come in and help people like us to give good solutions to the client.
Heinz: It’s not the logistics company on its own but it really has to be a joint effort to analyse and understand where are the goods coming from, where they are going, is it a two-level distribution system or three-level, how important is transport cost and so on. All these questions need to be asked and tailormade solutions need to be designed. Other than cost, another important factor is efficiency in value chain. Thus, good IT systems can give you visibility, traceability and can manage your whole supply chain better and will also be able to reduce cost.
QWhat is your revenue expectation for next financial year?
Jan: $80-90 million. This year we have closed at $40 million. We are a young company and the first step is to lay the ground work, to have an all India network, to get good people in the board, to have the capabilities and then we will be able to provide cost effective solution. At the moment we feel ready for growth.
has the growth curve of Apollo Fiege been since 2012?
Raaja: It has been great. We are doubling our top line on yearly basis and increasing the client base. We are now bit more focused on what we are looking for, going more after corporate for innovative solutions because cockpits in India are also waking up to the fact that now is the time to reduce the constantly mounting logistics costs.
Jan: However, Apollo is also allowing us to bring our solutions on ground with their expertise and strong foothold in India otherwise we won’t be able to enter in the Indian market in such a way.
(L-R) Jan Fiege, Managing Director Real Estate Board Member Apollo Fiege India, Heinz Fiege, Managing Partner, Fiege Logistik Holding Stiftung and Raaja Kanwar, Vice Chairman & Managing Director, Apollo International