German Railways group lays tracks to expand India investments

New Delhi: The €39-billion Deutsche Bahn Group, or the German Railways, has identified India as a place for future investments, Reiner Allgeier, Managing Director, DB Schenker Logistics (India), a group company of Deutsche Bahn, told Business Line. He, however, declined to divulge details.

DB Schenker Logistics, the service providing arm of DB Group, will expand its presence in India.

“This year, we will grow our footprint by 50 per cent — from 1.3 million square feet in the beginning of the year to two million square feet by year-end,” Allgeier said.

The firm manages exports and import of goods, and within India, it functions primarily in the contract logistics space, which includes managing warehousing and distribution business. DB Schenker’s customers belong to the hi-tech goods, engineering machinery, automotive, retail and healthcare segments.

Staff strength
It has a staff strength of about 2,200 in India, of which, 1,200 are on contract. The staff strength will go up, but not at the same rate as expansion in footprint, the company said.

While the firm has seen its export-import business from India stagnating, it expects the intra-India business to grow. “The export and import business has stagnatedwith imports going down. But, in our export ocean freight, we have been able to increase our volume this year compared with last year, which is good given the market conditions. Also, in intra-India logistics business, which is contract logistics, we are seeing growth,” Allgeier said.

Export-import
In the export-import segment, DB Schenker handles about 80,000 tonnes of air cargo and 79,000-80,000 twenty foot equivalent unit (TEU) of ocean containers a year.

“The contract logistics market in India is growing at 10-15 per cent, as companies are increasingly outsourcing their logistics and warehousing functions. We are registering better growth,” said Allgeier.

Allgeier added that India plays a major role in DB Schenker’s global network. “Our global head office, which is in Germany, and our mother company, the DB Group, has also identified India as a growing market and as a place for future investments,” he said.