Barely a month after finalising the merger of Reliance Petroleum (RPL) with its flagship Reliance Industries Ltd (RIL), the Mukesh Ambani-owned Reliance group is set to consolidate operations of other companies in its fold.

The group has begun an exercise to merge Reliance Ports & Terminals (RPTL) with Reliance Logistics to bring all its logistics operations under a single company.

“In a bull market, companies are created to effectively park risks. You need to think differently in economic downturns. The merger of companies with identical operations will bring about remarkable cost savings,” said a person close to the Reliance group, asking not to be named.

“We are considering the possibility of amalgamating some of our operating companies for enhanced efficiency through integration of operations,” a Reliance group spokesperson told Financial Chronicle.

While the merger plan aims to trim administrative as well as overhead costs, it is also triggered by the view that an integrated entity will be better equipped to handle RIL’s rising captive requirements and external demands, according to a senior port sector official familiar with Reliance’s refinery business.

RPTL has five single-buoy moorings (offshore floating platforms used for loading and unloading from tankers) and jetties at Jamnagar in Gujarat. It will now have to handle additional cargo after the commissioning of RIL’s second refinery in Jamnagar with a capacity of 5,80,00 barrels a day. This has taken the total capacity of the refinery to 1.24 million barrels a day.

“The expertise of larger companies is needed to handle bigger volumes,” said the official.

Reliance Logistics, with 100 distribution centres in 51 locations across India, has the wherewithal to handle larger volumes, according to logistics industry officials.

The operations of the company, headed by Mukesh Ambani’s cousin, Niraj Ambani, are being revamped ahead of the merger. “Very soon you will see a leaner Reliance Logistics which can absorb the operations of Reliance Port,” said a person close to the Reliance group.

While there is no official information on the total number of employees in Reliance Logistics, industry officials say it has around 1,000 people on the rolls after the rationalisation drive.

Several executives left the company to firms such as the Bangalore-based Deccan Cargo, which went on a hiring spree last year. Reliance Logistics’ senior executives operate from its corporate office in Santacruz, a western Mumbai suburb.

The company, which owns around 400 vehicles, moves 16 million tonnes of cargo by road, rail and sea, according to its website. “Reliance Logistics seems to be reducing its external operations as its captive demands are rising,” said the CEO of a logistics company, which had teamed up with Reliance Logistics for a number of projects.

The organised logistics business, which had been growing at 25 per cent, has slowed down after the retail and fast- moving consumer goods business took a hit from the economic slowdown.