Kintetsu World Express forms joint venture with Indian delivery firm

Japanese freight forwarding company Kintetsu World Express (KWE) Group has agreed to form a joint venture with Indian courier and supply chain logistics firm Gati Ltd. The company said the partnership would boost the volume of Indian cargo it handles on a global scale, bringing together its global transportation network with Gati’s “high quality” domestic Indian distribution services.

Gati brings a fleet of 4,000 trucks to the joint venture, operating in more than 500 districts in India with an annual turnover around the $250m USD mark. 

The company has been operating since 1989, with services ranging from logistics and international freight to domestic freight forwarding and door-to-door delivery.

KWE said its new partner offered value-added options for its delivery services in the “rapidly growing” Indian market, including fixed delivery times and automated proof-of-delivery messaging via GPS technology.

Satoshi Ishizaki, CEO of KWE, said: “Gati represents the best-in express delivery services in India and KWE is proud to be partnered with such an excellent company. The partnership with Gati will enable KWE to further expand and strengthen its global operations, with the Indian market increasingly growing in size and importance.” 

The new joint venture is being called Gati-Kintetsu Express Private Ltd., with plans for Gati to have a 70% stake to KWE’s 30% stake. 

The Japanese firm is expecting to invest around 2.7bn INR ($50m USD) in the venture, via a purchase of shares. 

Hyderabad-based Gati said the new venture would help establish its global presence. The company has been considering how to launch on the world stage for some time. Its board approved the Gati-Kintetsu Express project on Monday.

Gati said its Express Distribution and Supply Chain division will transfer to the new venture, which will be part of Gati’s consolidated financials and should officially open for business in April.

Together, the companies are already planning to expand their joint domestic and international business, investing in “high-end” third party logistics facilities including temperature-controlled warehouses.

Mahendra Agarwal, Founder and CEO of Gati Ltd said: “We take pride in associating ourselves with KWE, one of the world’s leading logistics solutions provider. The partnership will help us leverage KWE’s global customer base, develop world class infrastructure capabilities, enhance our distribution services and further strengthen our leadership position in India. 

“This partnership apart from providing value for the JV partners will greatly enhance value for Gati Shareholders,” added Agarwal.

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