Sitics plans to grow by expanding to new markets, acquiring companies

June 3, 2021: Founded in 2007 and based in Palakkad, Kerala, Sitics Logistic Solutions is an integrated logistics company growing at 30 percent CAGR. Sitics currently has a presence in 20 states across India while also operate in Malaysia, Singapore and Thailand. Recently registered in Australia, the company has plans to enter Europe, the USA, Indonesia, Vietnam, the Philippines and New Zealand in the coming years.

In an exclusive interaction with Indian Transport & Logistics News (itln.in), A M Sikander, chief executive officer and managing director of Sitics Logistic Solutions, speaks about the capabilities of his company, important verticals that contribute the most to its turnover, plans to expand to new markets and acquire new companies.

Tell us about the recent acquisition of Quifers and what this meant to your company?
Quifers is a logistics technology platform with multiple components and solutions in it.

For example, the first product Truck Load Builder helps to optimise fleet utilization. When you give the inputs of the materials that are going into a truck, you can have a three-dimensional visualization and the system will tell you how to pack in an ideal way by saving the most amount of space. So the manufacturers and distributors can reduce the number of truck used. For instance, if you're using 10 trucks, you could reduce it to eight trucks.

The second product is the Route Optimizer. When the product is leaving the factory or the warehouse and is going into the market to deliver to various customers, distributors, warehouses, etc, it gives you the right, shortest and fastest route to reach your point. With the best possible route, you can reduce fuel costs and time.

There is also a track and trace facility. As the product leaves the premises of the manufacturer or distributor, you can see and follow the truck at any given point in time. It also has an email generation facility, which complies with the e-way bill. Then when you go deliver the product, you have e-POD (electronic proof of delivery).

The third component is the On-Demand, where a customer, who wants to deploy trucks or vehicles to various locations, can send out notices and the vendors will be able to respond to you with the market prices so that you can choose the best.

How big is your company compared to your competitors?
We handle about three million deliveries per month from the first, middle and last-mile segments. We deploy about 5,000 plus trucks a month for various customers across the country. We handle about 1.2 million square feet of warehousing space. We have about 60 plus micro warehouses across the country and we are taking it to 100 plus in the next few months. In terms of revenue, we did about ₹150 crores last year. We are one of the fastest-growing in the logistics segment if you look at the industry average growth pace.

Who are your clients, which are the verticals you focus on and who are the logistics partners you collaborate with?
One of our major verticals is e-commerce. In the e-commerce space, we are in the whole ecosystem in terms of first-mile delivery, mid mile, last mile and managing hubs. In the 3PL (third party logistics) segment, we do freight forwarding, warehousing, transportation, and last-mile delivery. If you look at the whole value chain of logistics, we are present across it.

We have clients like ITC, Britannia, Amazon, Flipkart, Reliance, Abbott and Coca Cola. We also deal with Mercedes Benz, Continental Tires to name a few. We have close to 400 partners in the market in terms of vendors and partners who support us with logistics services across the country, and outside.

"If a client wants to consolidate many warehouses or implement a new strategy to reduce costs or make a better distribution model, we help the client from that stage on."

Break down your services in terms of their importance or contribution to your turnover or margin?
E-commerce contributes the most to our revenue. We do transportation and warehousing, which are big pieces of our business. We also do last-mile deliveries, which have mostly to do with e-commerce logistics. We have micro-warehouses across the country from where we deliver directly to customers, which comes down to the last mile delivery is part of the story.

Then we provide the supply chain solutions. If a client wants to consolidate many warehouses or implement a new strategy to reduce costs or make a better distribution model, we help the client from that stage on. For example, we help Mercedes Benz bring in the product, store it in the warehouse, and supply it in time for production.

Where are your 60 plus micro warehouses situated in India?
The micro-warehouses are in 20 different states of India. We are present across the country. We are in the south, the north, west and the east. Our presence was more in the south but now we are increasing our footprint more in the north and east. We are now pan-India and we are an MNC as well.

Give me an idea about your presence in the Southeast Asian Nations and your plans to expand to the US and Europe?
We've been in Malaysia for close to four years. We are also in Singapore and Thailand. And we've also just recently registered ourselves in Australia where we’re looking at starting our operations. We are also looking to expand in cross border e-commerce in the Southeast Asian region. Over a period of time, we will expand our presence across Southeast Asia. The Middle East is going to be another focus and then Europe and the Americas.

In the US and Europe, we are trying to provide a mix of traditional and digital logistics service. We will be more skewed towards digital logistics but we will also have the traditional logistics service. If you want to have the fulfilment, you will need the traditional logistics.

When we can expect the expansions to the Middle East, the US and Europe?
In Europe and the US, the move as a fulfilment service provider will be slightly slower, but we expect the technology platform to hit those markets very soon. As a company, we will enter Southeast Asia, then the Middle East, as we are in talks with many different players in these places, and then and the technology platform will be in Europe and America much before Sitics itself moves there.

"We just acquired a technology company and now we are looking at acquiring logistics companies that will add to our capabilities to strengthen what we're trying to do."

You started your company in 2007 but you had a history of moving things with an established logistics business since 1999. How satisfied you are?
I came from a business family so I was always been interested in doing business. I moved away from the family business into started doing my own businesses. I've also been a serial entrepreneur in manufacturing, distribution, and many other fields. And then, as a progression, we entered into logistics. It became very interesting in terms of the enormous potential, how much you can grow and how many services you can offer to clients.

In terms of organic growth, we will continue to grow on the roadmap that we've laid out. And in terms of inorganic growth, but we are looking at acquiring companies, which will add capabilities to our company. So those are the two-pronged strategy.

What are the types of companies that you're trying to acquire?
We just acquired a technology company and now we are looking at acquiring logistics companies that will add to our capabilities to strengthen what we're trying to do.

How Covid-19 impacted your business?
Covid-19 pandemic was a surprise to everybody. We had the first one and a half month of shut down and there was an impact. We saw a steady increase in terms of the sectors beginning to pick up the FMCG sector really picked from then on. So and then the logistics sector really picked up because it became an essential service for products to be delivered to people. After the initial period that we saw pretty strong growth in sales and last year, we grew between 25 to 30 percent.

Tell me if your company is involved in the movement of Covid-19 vaccines?
Right now the movement of Covid-19 vaccines is majorly handled by the government. So the private sector still doesn’t have a big role but we have everything in place to do it whenever we could. We have a tie-up with a cold chain company and we have the infrastructure ready.

We have also tied up with the drone company TechEagle and we are exploring that partnership to deliver vaccines wherever there are difficulties. DGCA has also opened up the skies for drone deliveries. There is a relaxation from the government in terms of where drones can be deployed. So we are moving forward in that direction as well.

Which are the geographies where you want to use these types of drones?
First, we're looking at the hilly terrains where it could be difficult in terms of reachability and time needed. The second is in the places separated by waterways. For example, if there's a river, and if you have to navigate by road it could take a couple of hours to get there. Drones can easily do it in about 5, 10 or 15 minutes.

What we can expect from you in this financial year?
We are continuing on our growth path and expect to grow strongly this year as well. We are focusing on e-commerce, technology and technology integration with customers. We are very bullish about our growth projections.