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December 28, 2008

Deccan Cargo's takeoff plans

Outlook Business has an article describing the start-up plans of Air Deccan founder Capt. Gopinath's second company.
With the help of a headhunting firm, the serial entrepreneur quickly shortlisted six candidates to head his logistics venture. Jude Fonseka, who had spent 22 years in logistics major FedEx, fit the bill, and was appointed CEO. Gopinath’s brief to Fonseka was simple: "Build the best team." Over the last 18 months, Foneska has put together a 200-strong team with many years of experience in the express logistics business. Many of those who have joined are former FedEx, UPS and DHL employees. Some of Gopinath’s ex-colleagues from Air Deccan’s start-up team, including Pritam Phillip and Vijaya Menon, are also on the team. Mohan Kumar, ex-CFO of Air Deccan, is the financial consultant for the project.

...His team is working hard to make that happen. Construction is in full swing to build a 100-acre express cargo hub at Nagpur. Cargo handling facilities are also being set up at the Delhi and Hyderabad airports. All the three centres will be potential hubs for international cargo. IBM and Infosys, among others, are involved in designing and setting up the IT infrastructure for the venture. IT experts point out that setting up a robust IT backbone could take as much as a quarter of the total investment in a logistics and supply-chain project.

Gopinath has tentatively planned the first flight of Deccan Cargo for May 2009. Gradually, he aims to connect 40 cities across the country with a fleet of 10 wide-bodied Airbus A310 cargo aircraft in combination with smaller ATR aircraft that will serve as feeders. There will also be an extensive on-ground fleet of vehicles connecting various warehouses. The entrepreneur has bankrolled the $200 million project with $15 million of his own money. Going forward, he hopes to get $70 million from private equity funds.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in