While the number of ATMs in India is growing explosively, money management and transport is still in its infancy. Logicash, a subsidiary of Syntech International in Limburg, is conquering this market at lightning speed.
LogiCash's cash trucks in India
As a supplier of money destruction equipment to central banks, Syntech - through its subsidiary Kusters Engineering - has been around the world for years. In 2008, for example, the company heard that the Indian government wanted to make banking services accessible to all 1.2 billion Indians. "At that time, most Indians did not yet have a bank account and benefits and subsidies were still paid out in vouchers, so corruption was a huge problem," says CFO Geert Litjens of Syntech International, the parent company of Logicash.
In order to be able to offer these financial services throughout the country, a lot of work needs to be done. Millions of bank cards, thousands of bank branches and hundreds of thousands of new ATMs were needed - especially in rural areas. "The market for cash management and distribution was on the verge of exploding at the time," recalls Litjens. Although Syntech has no experience in cash transportation, Pierre Hermans, Syntech's top executive who moved from cash distributor Brinks in 2008, is convinced that the company should grasp this enormous opportunity.
Trucks at the LogiCash depot
The company takes a thorough approach. After an initial visit in 2008, a tight business plan was drawn up in 2010. The preparations started in 2011 and by 2012 Logicash was up and running. While the number of ATMs in India grows from 100,000 to 180,000 in two years, Logicash cars and mopeds drive through virtually the entire country to refill them with rupees. By mid-2014, the Indian company, led by a local director, was profitable. Meanwhile, Logicash already has 15 offices and employs more than 3,000 people. This is expected to grow to 40 offices and over 10,000 employees in the coming years.
Financing is the only thing that seems to slow down Logicash's meteoric growth. Since Syntech's Dutch house bank does not dare to finance the growth of the subsidiary, the company makes use of the Dutch Good Growth Fund, a government fund that helps SMEs to do business in emerging markets.