Patel Integrated floats logistics JV with Saudi firm, to earn 19.85% sweat equity

Mumbai: Mumbai-based surface transportation firm Patel Integrated Logistics Ltd has signed an agreement with Saudi Arabia’s financial services firm Nationwide Group Co. to form a new joint venture company, Pivot Logistics CJSC, to tap new opportunities in Gulf Cooperation Council (GCC) countries.

Under the so-called memorandum of understanding, Patel Integrated will share its know-how, manpower and technology to set up and manage the end-to-end operations of the venture, the company said in a statement on Monday.

To be sure, Patel Integrated will not make any capital investment, but will earn 19.85% sweat equity for applying its know-how in managing the venture’s operations.

Pivot Logistics will set up a network of 50-plus destinations with operations in warehousing and logistics software.

“With the lucrative margin available in the Gulf countries, the joint venture is expected to significantly enhance the bottom line of Patel Integrated,” said company’s executive vice-chairman Areef Patel.

By 2017, the venture will begin operations in Dubai, and across the Gulf countries by 2018, to tap the full potential of the market opportunities arising in GCC countries, most notably the mega Dubai World Expo 2020 and the Qatar 2022 FIFA World Cup.

After setting up the network for warehousing and logistics software in the first phase, the company will move into air cargo in the line of Patel On-Board Couriers (POBC) and the marine sector in the third phase.

Earlier this year, Patel Integrated raised ₹ 18.73 crore through an issue of equity shares and equity warrants on a preferential basis to Mauritius-based Frontline Strategy Pvt. Ltd, an India-focused private equity investment firm, to fund its e-commerce venture plan.

It has recently set up an arm for e-commerce, after partnering with Amazon for express delivery.

According to the Pivot Logistics website, Pivot is a new Saudi Arabia-based closed joint venture business that will provide logistics solutions for clients in Saudi Arabia and the surrounding region.

The company will offer businesses, organizations and institutions a comprehensive array of services focused on freight transportation, storage, economic optimization and transferring of petroleum products, petrochemicals, goods and materials, it said.