The journey from Mian Textiles to Cordoba Logistics

What is the former textile mills company doing in the business of logistics and other ventures?

Much has been going on at Mian Textile Industries. In March 2020, the fledgling publicly listed textile company was being courted by Ali Arif from Next Capital before the bid fell apart because of the coronavirus pandemic. Then, in October last year, Mian Textile suddenly had another suitor.  Danish Elahi, CEO of the Elahi Group of Companies, announced his intentions to buy Mian Textile Mills. This time, there was no hindrance in the deal and Danish Elahi acquired the textile producer. 

In April 2021, the deal was finalised and Danish Elahi acquired a comfortable majority of 70.23% of the company. However, the change in ownership was not the only transformation that Mian Textiles was undergoing. Since Elahi took over, the company has made a hard pivot towards what would seem like an unrelated field – logistics and other ventures. This is where the Elahi Group of Companies has their expertise. 

The final change has been a change in name. No longer related to textiles, Mian Textile Industries within a year has gotten a complete makeover and is now Cordoba Logistics and Ventures and for the financial year 2021 remained in the acquisition mode, seeking regulatory approvals. Now, after the acquisition is complete, the company has resumed operations in a new vertical that it claims to have expertise in by virtue of the new shareholder’s decades long association with logistics through Elahi Group of Companies. The question now is whether the pivot and new lease on life will work, or whether Cordoba will fall?

What is the company upto?

In the first quarter of 2022 ending September 30, 2021, Cordoba Logistics and Ventures (CVL) Private Limited reported a revenue of only Rs500,000, and a net loss of Rs2 million. The company, however, only started business in the said quarter after being in regulatory limbo since last year. 

But now that it has finally taken off, the management of the new company helmed by Misbah Khalil as the chief executive officer, is hopeful that investment in logistics is going to be a sizable opportunity. So what does it plan to do?

Article continues after this advertisement

In a recent corporate briefing, the CEO of the company said that Cordoba’s logistics business is going to be focused on mass logistics and retail logistics, where the company would be providing logistics and transportation solutions to clients in various sectors. 

“In the logistics sphere, we have already started providing services to companies across Pakistan to provide them transportation and other logistics services. Our main service is providing logistical vehicles to companies across the country and we see a lot of opportunity in this sphere,” says Misbah Khan, their CEO. 

“Our focus is entirely on logistics; mass and retail logistics, which includes trucking as well,” says Misbah. “It is open for us to enter and create more opportunities and value for our shareholders. We will not be focusing on just one aspect. Our principal line of business is logistics, and other ventures. We will continue to invest in and direct all our resources and capital to our logistics responsibilities and provide warehousing, as well as looking into options of trucking business.” 

The company has already made investment into Trukkr and plans to increase that manifold. Trucking, however, has recently become very competitive with the entrance of new startups. As many as five very well-funded trucking startups have entered the foray to digitise trucking but despite that, the CEO is hopeful there is still potential. 

While the company looks serious about investing more into the trucking side where it will be deploying its own fleet and then leveraging the Trukkr ecosystem for orders, it plans to do almost everything imaginable in logistics. “If you see sugar, 30-40% of the value of sugar is lost during the transportation process and facilities that are not provided. There is a huge opportunity to bridge that gap and there is an opportunity to bring down that wastage. Logistic companies like us can provide solutions and bridge that gap and provide an opportunity to create a platform where they could use our services to reduce that wastage as well as create value for the middleman and the farmer. That is where we see there is great potential.”

“Apart from that there are companies in the retail sector and for them we want to provide transport service including but not limited to logistical solutions for creating timely dispatches and processes. There are a lot of companies coming up for that matter, but they do not provide one set of solutions and have the capital injection that is required. We have a mandate from the board to find those opportunities and fill those gaps and we have been working on these opportunities to fill those gaps,”  

These services would have multiple customer bases, and we would be providing services on multiple fronts. In line with its strategy to grow the logistics business, the new sponsor of the company injected Rs25 million and the company successfully resumed commercial activity in line with its principal activity in June this year by acquiring a private equity stake in Trukkr, which is a tech enabled logistics company. 

Trukkr provides a marketplace for businesses to send shipments from one city to another. Cordoba launched into the logistics business with over Rs200 million committed in funding by the sponsors out of which Rs50-55 million has been injected, and now plans to raise as much as Rs1 billion depending on credit facilities made available by the banks and through other means to fund long term growth of the company. 

“All of these will form the basis of the logistics business. The company is working with advisors to raise funding in all spheres including right shares and other matters. We want to create more financial options for the company. Once that is in place, we will be able to make further investments in other spheres and we will be able to take this principal line of business forward,” says Misbah. 

The company has only just started and the CEO was assertive that the space is good enough to create value for shareholders. CPEC is picking up, there is scope in transportation of agricultural produce, and then there is trucking where businesses can move freight like steel and commodities  from say manufacturer to distributor. Elahi Group has presence in both steel and commodities and will most likely be leveraging Cordoba’s logistics presence to move freight for its own businesses. 

Nonetheless, that is if the company is actually able to grow and create value for shareholders as it has planned to. How far away would be profitability then? Misbah was not candid enough to disclose exactly when they expect the company to be profitable, but was candid enough to say that their plan is to make the company profitable in the short to medium term, which is likely going to be a timeline of 2-3 years. All that, however, depends upon if the company is able to raise funds that it aims to and then execute successfully as well. 

What about ‘other ventures’?

In June this year, Cordoba started its commercial operations with a Rs13 million investment in Trukkr which is in line with its broader plan to lay the ecosystem for logistics and transportation. In September, however, the company invested Rs31 million to acquire 32.5% equity in a financial services and data analytics platform Finox. 

Both the Trukkr and Finox investments are going to bear returns when Cordoba makes an exit from any of these companies and the investments generate returns for shareholders as well. The company, however, has plans to not restrict itself to a single sector for such investments but says that ‘other ventures’ is going to remain very limited and the bulk of the business will be focused on the logistics and transportation segment. 

The timeline, again, on the exits from ventures was tentative, spanning over 2-3 years. But the company says that the performance is going to pick up and the forthcoming financials would show the services expanding in the region and providing opportunities for business to the company.

 

Taimoor Hassan
The author is a staff member and can be reached at [email protected]

1 COMMENT

  1. Sir, this is An Elahi group company. So could be a fraud then? Did Mr Danish not just get out of FIA custody for stealing money from an Islamic bank?

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Popular Posts