Hitachi Transport to build 4 logistics centers in India
TOKYO – Japan’s Hitachi transportation system will spend around 12 billion yen ($ 108 million) to build four logistics centers in India, which has become a strategic market for international shipping.
The company plans to open sites in Chennai and Mumbai next year, followed by centers in Delhi and Bangalore in 2025 or 2026. Construction has started in Chennai and Mumbai, with a total area of 40,000 to 50,000 square meters .
The facilities will transport automotive and electronic components. Several automakers and other manufacturers from Japan, Europe and South Korea are present in the four cities. Hitachi Transport intends to build a distribution network in a market seen as an anchor point for expansion in the Middle East and beyond.
In 2010, Hitachi Transport acquired Flyjac Logistics in India for approximately 5 billion yen, seeking to use a transportation network connecting Flyjac’s 25 locations across the South Asian country. But the freight volume did not increase as expected. The effect of India’s complicated tax system on the logistics industry has been seen as the source of the problem.
But India introduced a national tax on goods and services in 2017, replacing indirect taxes that differed from state to state. This decision helped to stimulate the transport of goods between States.
India has become “a bigger market as a multi-directional logistics hub,” said an executive at a large logistics company. Hitachi Transport will expand its distribution network to meet this demand.
Other global logistics companies are modernizing their operations in India. Japan’s Nippon Express has increased its investment in the country by 50% per year for three consecutive years through 2020. Deutsche Post DHL will open a new gateway facility for imports and exports near Bangalore Airport during this exercise.