Blue Dart for Rs 100 capex in 2009: part of Rs 1,000 cr plan

Mumbai, Nov 7 (UNI) Express logistics carrier company, Blue Dart, will undertake a Rs 100 Capex next year, as part of the company's Rs 1,000 crore short-to-meduim term investment strategy.

Outlining the expansion plans here today, Blue Dart Managing Director Anil Khanna said ''The capex for 2009 will be through 100 per cent accurals and will be utilized to strenghten our aviation, warehouse and technology infrastructure. Sixty per cent of the expenditure will be spent on the company's aircraft fleet and 40 per cent on warehouse and technology.'' He said the expansion plans were driven by consumer needs and not economic conditions.

''The slowdown has affected our volume growth by five per cent due to downturn in manufacturing and services sectors, but we will still touch double-digit growth rates.'' The company will also induct a new Boeing 757 by the yearend as part of its Rs 200 crore capex budget under FY-2008 budget (January-December).

The 25-year-old company, which is market leader in the Rs 1,260 crore domestic organized express industry, will focus on product growth with new products and refinement, market expansion, strengthening of infrastructure, improving service and reducing delivery time and increasing its 41.7 per cent marketshare in the short-medium term. It will also relaunch its ground express service and instal Global Positioning System (GPS) in its leased 6,000 ground vehicle fleet.

Forecasting on the company's Q4 performance, Blue Dart Finance Director and Chief Operating Officer Yogesh Dhingra said ''We expect the net margins to be better than last year, though the third quarter was pretty rough.'' He said the company had no plans in the immediate future to reduce its prices, which were raised in June this year.

''The June price hike was due to inflation not the rise in Aviation Turbine Fuel (ATF). Even though ATF prices have come down, other costs are still high. The company's cost structure consists of 40 per cent for aviation, 15 per cent for manpower, five per cent facilities, five per cent on selling and advertising, three per cent on depreciation and the remainder on pickup, delivery and miscellanous expenditure, he added.

Mr Dhingra said the company was not planning any job cuts and the main challenge in short-term would be pricing.

''It is how you hold the line in an industry that is growing at 12-13 per cent and which is expected to touch Rs 5,256 crore in 2012. As market leaders, we determine the price and we do not plan to slash our prices due to cost pressure,'' he added.

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