Saregama India outsources logistics

Saregama India, the Rs 143 crore entertainment arm of RPG Group, has roped in a strategic partner to manage its logistics business.

The function has thus been outsourced, to one of the largest European logistics companies based in Switzerland for better management of its working capital, catalogue, and supply chain.

Saregama had 18,000 stock keeping units (SKUs) and 13 godowns, which the Swiss company is managing on behalf of Saregama.

The Swiss company was advising Saregama on the reorganization of Saregama’s distribution network.

This involved the creation of eight regional distribution centers (RDCs) to take care of the stocking and supply of cassettes and CDs.

Eventually, the Switzerland-based logistics company could pick up a stake in Saregama, said sources close to the development.

When contacted, Subroto Chattopadhyay, managing director of Saregama, confirmed the development.

Saregama was currently consolidating manufacturing in Kolkata using information technology (IT) tools, like SAP, as well as outsourcing logistics, SKU and transport management to the Swiss company.

“The Swiss company will help manage the working capital better and bring its supply chain expertise to manage bar coding and our existing 18,000 SKUs better,” Chattopadhyay said, without divulging the name of the Swiss company.

Saregama would in parallel work with Regency Media Pty of Australia, a manufacturer of optical media, through a joint venture called Saregama Regency Optimedia (SRO), to make optical media like compact discs (CDs) and view compact discs (VCDs) in a dedicated manufacturing facility.

"Saregama Regency Optimedia is setting up its facility near Kolkata with trial production expected from this year," Chattopadhyay said.

Saregama had 26 per cent shares in SRO with 74 per cent held by Regency.

Saregama was eyeing opportunities like mobile business for value-added-services in conjunction with telecom service providers.

Saregama would market catalogue products in different languages in emerging platforms like radio to expand revenue and also build capabilities for creating new content with established and emerging music artists to become a content creator.

In 2007-08, Saregama’s revenues from publishing and new media grew by 35 per cent over the previous year.