The Hindu : Business : SSI promoters eyeing logistics services

Online edition of India's National Newspaper
Sunday, Aug 01, 2004

Business

Business

SSI promoters eyeing logistics services

By K. T. Jagannathan

CHENNAI, JULY 31. Kalpathis, the promoters of software education company SSI, are seriously studying options to enter logistics-related service field in a big way.

Indicating this, Kalpathi brothers, S. Aghoram and S. Suresh, asserted that they were looking at "opportunities where we can make a significant difference in that industry if we make a foray." The Kalpathis were at present weighing a few options.

They were convinced that the "real middle class is growing". In their reckoning, the "emerging India has started slowly arriving". These backdrops read in tandem with the thrust given by the new United Progressive Alliance at the Centre to the farm sector offered immense possibilities for providing logistics-related service support, they felt.

Options

Though varied options were examined, they saw huge opportunities in a couple of areas at least. With the middle class raising the aspiration bar and longing for a fun-filled outing as the westerners do, investment in hotel-related logistics, especially in scenic rural areas, was seen as a worthwhile exercise. The brothers, however, clarified that they were just studying the possibilities in this area.

The SSI promoters also saw opportunities in the area of transportation logistics service. Their enthusiasm stemmed from the latest focus on the farm sector and lack of a common carrier with a national network to move goods across the country. An efficient national carrier could help farmers and retail consumer discover fair price for their produce. The Kalpathis hastened to add that they would make a foray into any field only if they could make a marked difference in the field.

The Kalpathis had recently joined hands with Dr. Reddy's family to sign up Amrut Runwal Group, a Pune-based property developer, to develop south India's largest township project in Chennai with an investment of over Rs. 1,000 crores.

The project will involve developing 80-lakh sq ft of residential, commercial and office space on a 70-acre (1,259 grounds) land at Perambur. The project is to come up in phases over five years.

Sometime in 2003, the families of Kalpathi and Reddy (G. Harichandra Reddy and GV Prasad) acquired the land from the ailing Binny for a price of Rs. 62.1 crores. The land was sold by Binny as part of IDBI's rehabilitation scheme for the company. The sale was sanctioned by the Board for Industrial and Financial Reconstruction (BIFR) and cleared by the Madras High Court.

The proposed township will be developed through a 35:65 joint venture between the Kalpathi and Reddy families and the Runwal Group.

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SSI promoters eyeing logistics services