Global logistics company John Menzies said on Wednesday 5 September that it was willing to spend up to £35 million ($70.75 million) to expand its aviation business into India and South Africa. The company announced it had won new licences for its aviation division in these "exciting new markets".
Finance director Paul Dollman said the company could make a "pretty significant" investment at two Indian and 10 South African airports, where it has bagged contracts to move cargo and passenger luggage. One of the Indian airports where Menzies had bagged a contract is the new Hyderabad airport, a Greenfield project being set up by GMR Hyderabad International Airport Limited (GHIAL).
"In India we could be spending anywhere between £12 million and £20 million ($24.25 million to $40.50 million); in South Africa it could be £10 million to £15 million ($20.20 million to $30.30 million). It just depends on how many contacts we win, but we're pretty confident given our market position," he said, pointing out that the other players in these countries tended to be local players, while Menzies was the only one with global reach.
The investment will be used to build organically rather than acquiring other operators, with the benefits unlikely to be seen until 2008, Dollman said. He pointed out that the company remained on the lookout for buying opportunities elsewhere.
Menzies operates an aviation division and a news distribution service. Its pre-tax profits for the six months to 30 June were down 22 per cent to £15.3 million ($30.93 million). Revenues rose 6 per cent to £749.6 million ($1.52 billion).