Major Milestone: ₹90 Crore Cement Contract for AVG Logistics

On December 12, 2024, AVG Logistics Limited (BSE: 543910, NSE: AVG), a prominent multimodal logistics provider in India, announced securing a long-term contract worth ₹90 crore from one of the most renowned cement manufacturers in India. The contract will span over three years, beginning in Q3 FY2025, and represents AVG’s strategic expansion into the cement industry, a vital sector driving India’s infrastructure and construction growth.

Key Highlights of the Contract

1. Scope of the Agreement:

   • The contract focuses on the efficient movement of cement products, ensuring streamlined supply chain operations for the cement manufacturer.
   • This deal marks AVG’s official entry into the rapidly growing cement logistics market.

2. Revenue Contribution:

   • The contract is projected to contribute approximately ₹90 crore to AVG’s revenues over its three-year term.
   • This aligns with AVG’s strategy of diversifying its revenue streams and capitalizing on emerging opportunities.

3. Implementation Timeline:

   • The project will commence in Q3 FY2025 and will be executed in a phased manner to ensure optimal efficiency.

The Cement Industry: A Strategic Opportunity

1. Rising Demand for Logistics Solutions:

   • India’s cement industry plays a crucial role in meeting the country’s infrastructure and construction demands, with rapid urbanization and government-led projects driving growth.
   • The logistics requirements for cement—spanning raw material transportation to finished product delivery—offer a significant growth avenue for AVG Logistics.

2. AVG’s Competitive Edge:

   • With extensive experience in managing multimodal logistics networks, AVG is well-equipped to cater to the complex demands of the cement supply chain.
   • Its capabilities in customized logistics solutions and technology-driven operations will help ensure a smooth execution of this contract.

Implications for AVG Logistics’ Growth

1. Market Diversification:

   • This contract enables AVG to enter the cement industry, a sector with enormous potential for logistics services.
   • It also positions AVG as a key player in supporting India’s booming infrastructure sector.

2. Revenue Growth:

   • The deal is expected to contribute significantly to AVG’s financial performance over the next three years, starting in FY2025.
   • It aligns with the company’s vision of becoming a leader in providing integrated multimodal logistics solutions.

3. Strategic Vision:

   • AVG’s Managing Director, Sanjay Gupta, emphasized the importance of this contract in realizing the company’s long-term goals. According to Mr. Gupta:

     “This partnership is just the beginning of our strategic expansion into the cement sector. It strengthens our mission to build lasting relationships with customers and provide seamless supply chain solutions.”

About AVG Logistics Limited

Founded in 2010, AVG Logistics Limited has grown into a leading multimodal logistics provider in India, offering services in:

• Transportation (road, rail, cold chain)
• Warehousing (705,000 sq. ft. of space)
• Third-Party Logistics (3PL)

With 50+ automated branches and a fleet of 3,000+ vehicles, AVG serves top-tier clients, including Nestle, HUL, UltraTech Cement, ITC, and more. The company reported a revenue of ₹491.07 crore in FY2024, demonstrating its commitment to delivering value across industries.

Conclusion

AVG Logistics’ entry into the cement industry through this ₹90 crore contract represents a significant step forward in its growth journey. By leveraging its expertise in logistics and supply chain management, AVG is poised to capitalize on the opportunities presented by India’s booming infrastructure and construction sectors. This contract is not only a revenue booster but also a strategic move to solidify AVG’s position as a trusted partner in the logistics domain.