The Hindu Business Line - Chennai, Tuesday, Oct 12, 2004

From right: Mr S. Durgaprasad, Director and CEO, Bahwan CyberTek Group, Mr S.V. Sriram, President, and Mr Shyam Sundar, Vice-President-operations of the company, at a press conference in Chennai on Monday.

BAHWAN-Bahwan Exel Group, a joint venture between Oman-based Bahwan CyberTek and the UK-based Bahwan Exel Group, has bagged a $500-million fourth-party logistics (4PL) management contract from Petroleum Development Oman LLC.

The five-year contract involves primary and secondary distribution for Petroleum Development in Oman, said Mr S. Durgaprasad, Director and CEO, Bahwan CyberTek.

Part of the $1-billion Bahwan Group, Bahwan CyberTek globally employees around 300 people, including 200 in its Chennai development centre. It expects to report revenues of Rs 100 crore for fiscal ending March 31, 2005, compared to Rs 40 crore for last fiscal, he said.

As part of the 4PL project, transport management system of i2 (a global firm in logistics management) will be implemented to enable end-to-end transportation management with Petroleum Development's 12,000 plus oil fields. The $12-billion Bahwan Exel will do general management, implement i2 software, provision of logistics management services and health, safety and environmental issues.

Bahwan CybterTek will provide information technology infrastructure along with accountancy and treasury services for this project, a press release says.

Accenture, a consultancy firm, defines 4PL as an integrator that assembles the resources, capabilities and technology of its own organisation and other organisations to design, build and run comprehensive supply chain solutions, said Mr Durgaprasad.

The joint venture firm would provide professional third party logistics management, increase vehicle utilisation, provide track and trace capability and reduce the cost of logistics operations.

Petroleum Development spends $77 million a year on logistics, and this will be reduced to $55 million a year by the end of fifth year.According to Mr Durgaprasad, in the $3-million joint venture company CybterTek has a 51 per cent stake and the rest held by Bahwan Exel. The company hopes to get 10-20 per cent profit margin from the contract, he said.