Allcargo Belgium NV, a wholly owned global subsidiary of Allcargo Logistics Ltd, has acquired a 65 percent stake for $29 million in a new joint venture company formed to handle Nordicon Group’s business, which operates less than container loads (LCL). and rail consolidation in the Nordic region.
Nordikon Group operates two entities each in Sweden and Denmark, which are grouped together into a joint venture holding company.
Nordicon operates approximately 300,000 cbm of ocean LCL and 50,000 cbm of rail each year. In calendar year 2020, it grossed around $50 million.
The new joint venture company ‘ECU Worldwide Nordicon’ has acquired 100% of Nordicon’s business for $44 million, with Allcargo Belgium investing $29 million for a 65 percent stake, while the rest is held by Nordicon’s existing promoters. Is. AllCargo funded the acquisition through internal resources.
Allcargo Belgium operates under the ECU Worldwide brand/network name.
strong presence
Ravi Jakhar, Chief Strategy Officer, Allcargo Logistics said that Allcargo aspires to have a strong presence in the Scandinavian region as part of a vision to expand the business of ECU Worldwide.
“We have historically not been very successful in building business through our agents there and our market share was quite low,” Jakhar said.
“With this acquisition, we will now have approximately 40 percent market share in LCL consolidation across the Scandinavian region in Sweden, Norway, Finland and Denmark. This is a very strong, well recognized and rapidly growing company in a significant geographic region Makes us a formidable No. 1 player. business Line.
Nordicon has built a rail freight consolidation business that works exactly like Ocean Freight Consolidation which is completely asset light.
“Just as containers are carried on ships, they are carried on trains from China to Europe. This is a business they do in the Nordic region and we can now expand this product to all of Europe through the ECU Worldwide Network. This becomes the second new product offering to be added to the ECU Worldwide Network and explains the strategic importance of the joint venture.”
Jakhar said Nordicon businesses are currently not part of the ECU Worldwide Network. “This means that all the cargo they are handling once they switch to the ECU Worldwide Network will start flowing through the ECU offices. This means that all the containers they import will also now go to the ECU offices. The origin will be handled and likewise all the containers exported by them will also be handled at the ECU offices at the destination,” he said.
“The business they are doing has a “double effect” towards earnings for them, but the entire business will also flow into the ECU network, leading to synergy, incremental revenue and profits for ECU Worldwide,” Jakhar said.
Over a period of five years, Allcargo has options available to consider buying the remaining stake in the joint venture.
Jakhar said “no active work is being done” on the overseas listing of the wholly-owned subsidiary of Allcargo.
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