Warehousing Industry - India July 2009

Executive Summary Estimated worth INR XX bn in 2007-08; Expected to reach INR YY bn by 2010-11 Warehousing accounts for a% of the total logistics market Major warehousing destinations are A,B,C and D Warehouses can be classified as - public, private and bonded SAMPLE Market Government Initiatives Trends Major Players Shift to GST tax regime The Warehousing Act, 2007 Private investment in logistics parks and FTWZs Infrastructural developments Development of the dedicated freight corridor Strong macroeconomic fundamentals Changing tax policy boosting warehouse outsourcing Most profitable segment in logistics leading to large scale investments Realty players foraying into the market Large scale investments from private equity firms The market is fragmented with b% of the market comprising of the unorganized sector u-v% of the organized market is accounted for by PSUs PSU’s Private Players Company 1 Company 2 Company 3 Company 4 Company 5 Company 6

Estimated worth INR XX bn in 2007-08; Expected to reach INR YY bn by 2010-11

Warehousing accounts for a% of the total logistics market

Major warehousing destinations are A,B,C and D

Warehouses can be classified as - public, private and bonded

Shift to GST tax regime

The Warehousing Act, 2007

Private investment in logistics parks and FTWZs

Infrastructural developments

Development of the dedicated freight corridor

Strong macroeconomic fundamentals

Changing tax policy boosting warehouse outsourcing

Most profitable segment in logistics leading to large scale investments

Realty players foraying into the market

Large scale investments from private equity firms

The market is fragmented with b% of the market comprising of the unorganized sector

u-v% of the organized market is accounted for by PSUs

Company 1

Company 2

Company 3

Company 4

Company 5

Company 6

Market Definition Market Overview Government Initiatives Industry Characteristics & Trends Major Players Key Developments Appendix

Market Definition

Market Overview

Government Initiatives

Industry Characteristics & Trends

Major Players

Key Developments

Appendix

Warehouse industry is estimated to grow at an accelerated rate in accordance with the growth in trade and commerce SAMPLE Overview Major Warehousing Destinations Source: u 07-08 v 08-09 w 09-10 x 10-11 y USD bn m% Warehousing n% Other Logistic Segments f ’ 12 c ’ 10 d ’ 11 e mn MT a b 2008 ’ 09 Market Size and Growth Capacity Expansion Warehousing expected to account for L% logistic activity by 20 - - Warehousing in India is estimated to account for approximately z% of total logistics costs The current state of warehousing is dismal: Inefficient facilities Lack of technology Shortage of expertise Small and distributed across states primarily due to the tax structure Fundamental demand is very strong leading to large investments and expansion by logistic service providers and warehousing companies Market is estimated to grow at y% p.a. The Government’s 11 th Five Year Plan targets a capacity of XX MT by 20-- Competitive landscape is dominated by state-owned companies although private participation is also growing significantly

Warehousing in India is estimated to account for approximately z% of total logistics costs

The current state of warehousing is dismal:

Inefficient facilities

Lack of technology

Shortage of expertise

Small and distributed across states primarily due to the tax structure

Fundamental demand is very strong leading to large investments and expansion by logistic service providers and warehousing companies

Market is estimated to grow at y% p.a.

The Government’s 11 th Five Year Plan targets a capacity of XX MT by 20--

Competitive landscape is dominated by state-owned companies although private participation is also growing significantly

The government has taken strong initiatives and implemented various policies for the development of this sector Major transition from Central Sales Tax to the existing VAT regime coupled with the introduction of Single-tax Goods & Services Tax (GST) allowing for the lower logistics costs Expected to lead to large warehouses offering various services via integration of technology Shift to GST tax regime Key Initiatives Warehousing Act The Warehousing Act, 2007 introduced a negotiable warehouse receipt (NWR) system NWR’s are expected to facilitate FI’s as it provides cost advantages and eases trade procedure for players Development of the Dedicated Freight Corridor Government plans to create a dedicated rail freight corridor along the east and the west Private participation is expected for developing modern logistics facilities and services Infrastructural Developments Impetus has been on developing road infrastructure to support road freight Golden Quadrilateral and NSEW (North-South-East-West) Road Corridor are two major initiatives forwarded by the government Private Investment in Logistics Parks and FTWZs Government has been encouraging private players to develop logistics parks and Free Trade Warehouse Zones in order to boost this sector by drawing in large scale investments

Major transition from Central Sales Tax to the existing VAT regime coupled with the introduction of Single-tax Goods & Services Tax (GST) allowing for the lower logistics costs

Expected to lead to large warehouses offering various services via integration of technology

The Warehousing Act, 2007 introduced a negotiable warehouse receipt (NWR) system

NWR’s are expected to facilitate FI’s as it provides cost advantages and eases trade procedure for players

Government plans to create a dedicated rail freight corridor along the east and the west

Private participation is expected for developing modern logistics facilities and services

Impetus has been on developing road infrastructure to support road freight

Golden Quadrilateral and NSEW (North-South-East-West) Road Corridor are two major initiatives forwarded by the government

Government has been encouraging private players to develop logistics parks and Free Trade Warehouse Zones in order to boost this sector by drawing in large scale investments

Key Trends Strong macroeconomic fundamentals Realty players foraying into the market Most profitable segment in logistics leading to large scale investments Changing tax policy boosting warehouse outsourcing Large scale investments from private equity firms Trends

Government Players (1/2) SAMPLE Corporate Information Business Highlights u 2006-07 v 2007-08 Revenue Profit / Loss Revenue INR mn Profit INR mn Source: Provides storage facilities for a wide range of products, from agricultural to industrial goods It has a market share of t% (2008) The company handled x TEUs in ’08 against y TEUs handled in the previous year, registering a growth of z% at their CFSs / ICDs Financial Performance Expansion: Plans on expanding existing warehousing capacity in Kerala by a tonnes in 20-- - -- MOU: Formed an association with the Ministry of Consumer Affairs, Food & Public Distribution for creating additional storage capacity of b MT MOU: With C as it plans to set up a modern state-of-the art CFS facility near the D Port Business Outlook Company Snapshot: Company 1 Established 19-- Headquarters Mumbai Capacity A Location B warehouses Key People C (Chairman and MD) D (Chairman and MD) E (Joint Secretary)

Provides storage facilities for a wide range of products, from agricultural to industrial goods

It has a market share of t% (2008)

The company handled x TEUs in ’08 against y TEUs handled in the previous year, registering a growth of z% at their CFSs / ICDs

Expansion: Plans on expanding existing warehousing capacity in Kerala by a tonnes in 20-- - --

MOU: Formed an association with the Ministry of Consumer Affairs, Food & Public Distribution for creating additional storage capacity of b MT

MOU: With C as it plans to set up a modern state-of-the art CFS facility near the D Port

C (Chairman and MD)

D (Chairman and MD)

E (Joint Secretary)

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