AAAAAAAAAAAAAAAAAAAAAAAAAAA

NT Bureau
Chennai, Aug 10:

        Sical Logistics Ltd, provider of multi-modal logistics solutions for bulk and container cargo, has sold the manufacturing facilities and assets of its Indrad Auto Components for Rs 14.69 crore to Lucas TVS Ltd, one of leading makers of auto electrical units.

        With the asset disposal, the total funds realised by the company since the start of the disinvestment process in 2006, have gone up to Rs 90 crore. The exit from the auto component facility, part of the non-logistics business of Sical, was in continuation of the company's strategy to focus on its core strength of logistics management.

        Sical was in talks with a number of global majors, but zeroed in on the Lucas TVS because of business synergies and the ready fit of the Indrad Auto to the growing needs of TVS group. The current sale does not include the GATE business of Indrad.

        Sical has entered into a technical tie-up with GATE SRL of Italy in 1997 to source cooling sub-products used in the manufacture of high-wattage engines. The facilities at Indrad were used for assembling and completing the process technology related activities before delivering the end-product to the customers. In order to service the clients in an efficient manner, Sical would be continuing its partnership with GATE till further discussion for a final deal with the collaborator.

        Sical Chairman Ashwin Muthiah said, 'The decision to sell the assets of the auto business unit was taken by Sical purely to demerge the non-logistics business, due to the change in business strategy,' said Ashwin Muthiah, chairman, Sical Logistics Ltd.

        The company was trying to exit the non-logistics business in a time bound yet value-bearing manner. 'The operations we exited were non-core activities which helped us to get the right exit value. Although the process of demerging the auto-components unit took some time, we were focused on getting the structure right and selling in the manner best suited to extract break-up value, which were important factors in the process,' said Muthiah.

        Further, he said Lucas TVS was a good fit for the planned land, building and assets sale as auto components was their core business and getting a ready facility made sense for their growing needs.

        In 2006-07, Sical moved nearly 22 million tonnes of bulk cargo and 500,000 TEUs (twenty-foot equivalent units) of container cargo, more than any other third party logistics (3PL) services provider in South Asia.

        The company's infrastructure network included an exclusive walk-in berth in Chennai for ships carrying bulk cargo; a container terminal at Tuticorin; over one million sq ft of storage space in 100 warehouses; owned and regularly contracted trucking fleet of over 2,500 vehicles; and container freight stations at four locations across India. In the year 2006-07, the gross revenue was Rs 990 crore for an equity capital of Rs 30 crore.