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Warehousing Industry ‐Warehousing Industry IndiaJuly 2009
Executive Summary                 Estimated worth INR 20 bn in 2007‐08; Expected to reach INR 55 bn by 2010‐11           ...
•Market Definition•Market Definition•Market Overview•Government Initiatives•Industry Characteristics & Trends•Major Player...
Warehouses constitutes space for temporary storage for raw materials and finished goods for onward transport to customers ...
•Market Definition•Market Definition•Market Overview•Government Initiatives•Industry Characteristics & Trends•Major Player...
Warehouse industry is estimated to grow at an accelerated rate in accordance with the growth in trade and commerce Overvie...
Lack of sophisticated technology, skilled personnel and infrastructure has led to inefficiencies in current warehouses    ...
Warehouses are classified in three categories depending on ownership and usage                             • Owned and ope...
There are two primary models – own and lease with various sub‐options depending on the operator’s preferences             ...
Major Warehouse Hubs – North & East India                                            Warehouse Hubs                       ...
Major Warehouse Hubs – South & West IndiaBhavnagar            Mysore                                                      ...
•Market Definition•Market Definition•Market Overview•Government Initiatives•Industry Characteristics & Trends•Major Player...
The government has taken strong initiatives and implemented various policies for the development of this sector           ...
Phase out of current CST tax system by March 2011 paving way for large and sophisticated warehouses       Until 2006      ...
Negotiable warehouse receipt system will facilitate entry of FIs and create demand for modern warehouses        Key compon...
Policy on Logistics Parks and Free Trade Warehouses providing significant boost to warehouse development • Government poli...
Improving road infrastructure will support road freight, which accounts for nearly half of all freight trafficGolden Quadr...
Dedicated Freight Corridors will create a modal shift from road to rail and need for modern logistic facilities and servic...
•Market Definition•Market Definition•Market Overview•Government Initiatives•Industry Characteristics & Trends•Major Player...
Key Trends                                            Strong macroeconomic                                                ...
Strong macroeconomic fundamentals driving the demand for warehouse servicesEXIM trade                                     ...
Phasing out of CST and introduction of VAT encouraging warehouse outsourcing and value‐added servicesState of logistics ou...
Logistics service provider are focusing on large scale investments in the warehousing segmentHigh Margins                 ...
Players are entering via independent ventures or through JV’s with warehousing development and management companiesReal es...
Growth in the warehouse business has witnessed large scale investments from PE firmsPE activity in warehousing industry• T...
•Market Definition•Market Definition•Market Overview•Government Initiatives•Industry Characteristics & Trends•Major Player...
Market is extremely competitive with a large unorganized sector and the organized sector is dominated by PSU’sOverview    ...
Government Players (1/2)Company Snapshot: Central Warehousing CorporationCorporate Information                            ...
Government Players (2/2)Company Snapshot: Food Corporation of IndiaCorporate Information                                  ...
Private Players (1/5 )Company Snapshot: Blue DartCorporate Information                                               Finan...
Private Players (2/5 )Company Snapshot: Gati Corporate Information                                                Financia...
Private Players (3/5 )Company Snapshot: Indo Arya  Corporate Information                                               Fin...
Private Players (4/5 )Company Snapshot: Transport Corporation of India Corporate Information                              ...
Private Players (5/5 )Company Snapshot: National Bulk Handling Corporation Corporate Information                          ...
Market has observed entry of new private playersGrowing private participation• Private players are entering the warehousin...
•Market Definition•Market Definition•Market Overview•Government Initiatives•Industry Characteristics & Trends•Major Player...
Key DevelopmentsDate         Development25‐May ‐09   Central Warehousing Corporation plans on expanding their infrastructu...
•Market Definition•Market Definition•Market Overview•Government Initiatives•Industry Characteristics & Trends•Major Player...
Appendix I: Free Trade Warehousing Zones across India  Approval                                                           ...
Appendix II: State Wise Storage capacity of FCI, CWC and SWCs (In Million MT)            States              FCI          ...
Appendix III: Logistics Parks Planned         Location             State    Number                      Location         S...
Thank you for your timeFor an updated report or any customized research requirements, please contact:Gaurav KumarE‐Mail: g...
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Market Research India - Warehousing Industry in India 2009

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Market Research India - Warehousing Industry in India 2009

  1. 1. Warehousing Industry ‐Warehousing Industry IndiaJuly 2009
  2. 2. Executive Summary  Estimated worth INR 20 bn in 2007‐08; Expected to reach INR 55 bn by 2010‐11  Warehousing accounts for 20% of the total logistics market Market  Major warehousing destinations are Maharashtra, Tamil Nadu, Haryana and West Bengal  Warehouses can be classified as  ‐ public, private and bonded p ,p  Shift to GST tax regime  The Warehousing Act, 2007Government   Private investment in logistics parks and FTWZs Initiatives  Infrastructural developments Infrastructural developments  Development of the dedicated freight corridor  Strong macroeconomic fundamentals  Changing tax policy boosting warehouse outsourcing Trends  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 92% of the market comprising of the unorganized sector The market is fragmented with 92% of the market comprising of the unorganized sector  70‐75% of the organized market is accounted for by PSUs PSU’s Private PlayersMajor Players • Central Warehousing Corporation • Transport Corporation of India  p • Food Corporation of India  • Gati  • State Warehousing Corporation • Blue Dart WAREHOUSING INDUSTRY – INDIA.PPT 2
  3. 3. •Market Definition•Market Definition•Market Overview•Government Initiatives•Industry Characteristics & Trends•Major Players•Key Developments y p•Appendix WAREHOUSING INDUSTRY – INDIA.PPT 3
  4. 4. Warehouses constitutes space for temporary storage for raw materials and finished goods for onward transport to customers Supply Transport Storage Transport End‐customer Road Road Manufacturer Customer Rail Rail Exporter Warehouse Importer Sea Sea S Distributor Customs Air Air • Inbound Logistics: Storage of raw material sourced from suppliers Role • Outbound Logistics: Dispatch/delivery to customer  Core Non‐core or value added services Activities • Receipt/Putaway • Tally with goods receipt • Order processing • Storage • Packaging/re‐packaging • Shipping • Dispatch • Product mixing/bundling Product mixing/bundling • Inventory Management Inventory Management • Primary: Road; located close to manufacturing base or end‐customer Integration • Secondary: Increasingly being integrated directly with rail, sea and air infrastructure WAREHOUSING INDUSTRY – INDIA.PPT 4
  5. 5. •Market Definition•Market Definition•Market Overview•Government Initiatives•Industry Characteristics & Trends•Major Players•Key Developments y p•Appendix WAREHOUSING INDUSTRY – INDIA.PPT 5
  6. 6. Warehouse industry is estimated to grow at an accelerated rate in accordance with the growth in trade and commerce Overview Major Warehousing Destinations•Warehousing in India is estimated to account  Other Logistic Segments for approximately 20% of total logistics costs 80% Warehousing •The current state of warehousing is dismal:  expected to   Inefficient facilities account for 35%  logistic activity by   Lack of technology  2011  Shortage of expertise Shortage of expertise 20%  Small and distributed across states primarily due  Warehousing to the tax structure•Fundamental demand is very strong leading to  large investments and expansion by logistic  large investments and expansion by logistic Market Size and Growth Capacity Expansion p y p service providers and warehousing companies USD bn mn MT•Market is estimated to grow at 40% p.a.  60 +40% 55 150 +10%•The Government’s 11th Five Year Plan targets a  100 110 39 91 capacity of 110 MT by 2012 40 100 83 28 75•Competitive landscape is dominated by state‐ 20 20 50 owned companies although private  participation is also growing significantly 0 0 07‐08 08‐09 09‐10 10‐11 2008 ’09 ’10 ’11 ’12 WAREHOUSING INDUSTRY – INDIA.PPT 6
  7. 7. Lack of sophisticated technology, skilled personnel and infrastructure has led to inefficiencies in current warehouses • Warehouse management in India predominantly follows a Clearing and Forwarding (C&F)  agent model thus most warehouses are primarily a covered storage space acting as depots Current state of  or stocking points and are usually small in size Market  • An agent on contract manages the facility but most are not knowledgeable nor follow  professional methods and practices • Concepts or tools such as warehouse management systems, automation or vertical space  y utilization are virtually non‐existent  • Majority of operators are small‐ to mid‐sized entrepreneurs with limited investment Majority of operators are small to mid sized entrepreneurs with limited investment  capacity State of  • Most investments are from government while private sector investments are sporadic and Infrastructure  are largely concentrated only in the port areasand Resources  Government plans to invest USD 24 bn in overall supply chain infrastructure by 2016 Government plans to invest USD 24 bn in overall supply chain infrastructure by 2016 • Large demand supply gap exists in the warehousing industry for skilled personnel  • A major shortfall exists in the resources required for warehouses to function efficiently   Number of warehouse managers is expected to increase from 14,00 in 2006 to 34,000 in 2015  Demand for new warehouse managers is expected to increase from 3,270 in 2006 to 7,720 in 2015 WAREHOUSING INDUSTRY – INDIA.PPT 7
  8. 8. Warehouses are classified in three categories depending on ownership and usage • Owned and operated by private entities or individuals Private • Licensed for exclusive use of goods owned, imported by or on behalf  of licensee only f li l • Licensed by the government to private entities individual or Licensed by the government to private entities, individual or  cooperative society • Permitted to offer storage facilities to general public or other entities  Type Public for a fee • Typically located near transportation points and critical in marketing of  agricultural products • Licensed to accept import goods for storage until payment of customs  duty • Primarily located near ports and operated by government or customs  Bonded authorities and used primarily by importers and exporter • Warehouses give an undertaking or “bond” that goods will not be  removed without prior consent from customs authorities WAREHOUSING INDUSTRY – INDIA.PPT 8
  9. 9. There are two primary models – own and lease with various sub‐options depending on the operator’s preferences Built‐to‐suit  • Low startup time since land consolidation not an  Operational elasticity (BTS) issue No lease renewal/termination Appreciation of land prices Direct land  • Beneficial for large players & long‐term plansOwn/Purchase • Acquisition and consolidation large land tracts purchase  Large initial investment Partnership   Difficulty in obtaining large‐ • Land acquisition & development handled by  size facility size facility with land  realty player & construction is done by operator  Long payback period developer • Identifying ideal partner is a challenge  Condition and technological  Low initial investment  l capabilities of facility bl ff l Built‐to‐suit  Low risk and liabilities  Possibility of high rentals & size  (BTS) Availability of infrastructure constraint issues  High maintenance costs Lease Long‐term  Freedom of customization  Availability of long‐term land lease Low maintenance  Land consolidation issues for larger  Land Lease Integration of technologies sized facilities WAREHOUSING INDUSTRY – INDIA.PPT 9
  10. 10. Major Warehouse Hubs – North & East India Warehouse Hubs Faridabad Pataudi Medinipur WAREHOUSING INDUSTRY – INDIA.PPT 10
  11. 11. Major Warehouse Hubs – South & West IndiaBhavnagar Mysore Warehouse Hubs WAREHOUSING INDUSTRY – INDIA.PPT 11
  12. 12. •Market Definition•Market Definition•Market Overview•Government Initiatives•Industry Characteristics & Trends•Major Players•Key Developments y p•Appendix WAREHOUSING INDUSTRY – INDIA.PPT 12
  13. 13. The government has taken strong initiatives and implemented various policies for the development of this sector Shift to GST tax regime • 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 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 procedure for players Key  Private Investment in Logistics Parks and FTWZs Initiatives • 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 y g g Infrastructural Developments • Impetus has been on developing road infrastructure to support road freight  Q ( ) j • Golden Quadrilateral and NSEW (North‐South‐East‐West) Road Corridor are two major  initiatives forwarded by the government  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 WAREHOUSING INDUSTRY – INDIA.PPT 13
  14. 14. Phase out of current CST tax system by March 2011 paving way for large and sophisticated warehouses Until 2006 Tax system transitions Expected Primary driver  Central Sales Tax (CST) regime for consolidation  & outsourcing & outsourcing Manufacturers/distributors  Fewer but larger  taxed for Inter‐state sales warehouses Phase out of CST by 2010‐11  Warehouses maintained in  Optimized rather  each state to show inter‐state  than tax‐efficient  sales as stock transfers and  location avoid tax Consolidation  Introduction of VAT in 2005 of  Warehouses  • Small‐sized warehouses Scope for value  • Inefficient added services • Minimal or no technology Single‐tax Goods & Services  Tax (GST) on 1st A il 2010 T (GST) 1 April 2010 High distribution costs – Integration of  Logistics spend ~13% of GDP technology Introduction of VAT has increased transparency and eventual incorporation of GST will  Introduction of VAT has increased transparency and eventual incorporation of GST will significantly reduce logistics costs WAREHOUSING INDUSTRY – INDIA.PPT 14
  15. 15. Negotiable warehouse receipt system will facilitate entry of FIs and create demand for modern warehouses Key components of the Warehousing (Development and Regulation) Act, 2007 • Warehousing Development and Regulatory Authority (WDRA) for registration and certification of warehouses  • Accreditation agencies also appointed to facilitate registration of warehouses Warehouse  • Certification granted condition to warehouse meeting prescribed norms such as:  Storage worthy for different category of goods Regulator  Equipment and apparatus for weighing, handling, sampling, grading, fire fighting and pest management  Trained staff having knowledge and expertise for scientific storage of goods  • Certified warehouses will be permitted to issue Negotiable Warehouse Receipt (NWR) • Fully negotiable instruments at a national level  Negotiable  • Uniform paper or electronic format containing all necessary detailsWarehouse Receipt • Backed by enforceable laws to protect rights of holder • Legal protection along with dispute settlement mechanism enforces trust in NWR as negotiable instruments Legal protection along with dispute settlement mechanism enforces trust in NWR as negotiable instruments Trade & Finance • Freely transferable between buyers and sellers making it a tool of trade • Enabling large‐scale entry of financial institutions and resultant credit flow to rural areas and farmers • Shorter and more efficient supply chains Logistics Costs • Lower cost of financing due to reduced risk • Rewards for quality & grading Demand for warehouses with modern equipment, processes and technology will be a  Demand for warehouses with modern equipment, processes and technology will be a must to support the objectives of Warehousing Act WAREHOUSING INDUSTRY – INDIA.PPT 15
  16. 16. Policy on Logistics Parks and Free Trade Warehouses providing significant boost to warehouse development • Government policy to invite private sector to build logistics parks and Free Trade Warehouse Zones (FTWZ) is one the  most important drivers for growth in warehousing in India• Although there are distinctions between Logistics Parks and FTWZs, they share a common function to provide state‐ of‐art warehousing facilities, multimodal connectivity, and services pertaining to domestic and EXIM tradeParameter Logistics Park Free Trade Warehouse Zone (FTWZ)Description Includes warehouses, container facilities and cold chain  Includes warehouses container facilities and cold chain Special form of SEZ with focus on warehousing and  Special form of SEZ with focus on warehousing and infrastructure international tradingComponents • Container and product‐specific terminals & warehouses • Standard and Bonded Warehouse • Rail & road connectivity; air where applicable • Rail & Road sidings • Allied facilities like commercial space and banks • Processing area •H t l f d Hotels, food parks and entertainment facilities permitted k d t t i t f iliti itt dFocus Domestic market EXIM trade – international marketsRegulatory • Considered as within the DTA (Domestic Trade Area) • Designated as foreign territory  • Classified under Infrastructure industry • Governed under the SEZ Act, 2005 & SEZ Rules, 2006Specification N.A. NA • Minimum built up area of 0 5 mn sq mtrs Minimum built up area of 0.5 mn sq. mtrs • Minimum outlay: INR 1 bnIncentives • 22% income tax exemption for continuous operations of  • Same as SEZ 10 years • Developers and operators can avail benefits • Granted only to developersLocation • Majority are near SEZs & Dedicated Freight Corridors FTWZ itself is considered as an SEZ WAREHOUSING INDUSTRY – INDIA.PPT 16
  17. 17. Improving road infrastructure will support road freight, which accounts for nearly half of all freight trafficGolden Quadrilateral and NSEW (North‐South‐East‐West) Road Corridor•Despite being more expensive than rail, roads  account for 50% of freight transport with  national highways alone accounting for 40%•As part of road infrastructure development:  Six‐laning of Golden Quadrilateral and select  national highways g y  Four‐laning on NSEW corridors  Four‐laning 20, 000 km of National Highways•Roads will remain a crucial component of  freight movement since railway freight is: freight movement since railway freight is:  More popular for movement of bulk goods   Hindered by limited reach in hinterland  More expensive than road transport WAREHOUSING INDUSTRY – INDIA.PPT 17
  18. 18. Dedicated Freight Corridors will create a modal shift from road to rail and need for modern logistic facilities and services•Government has proposed two dedicated rail freight corridors along the west and east.   Western corridor is a part of the Delhi Mumbai Industrial Corridor (DMIC) and is to be commissioned by 2012   Eastern corridor is yet at a proposal stage•Private sector participation is sought for logistic infrastructure and trade services along the corridor Pi t t ti i ti i ht f l i ti i f t t dt d i l th idDedicate Freight Corridors ‐ Route Map Delhi Mumbai Industrial Corridor • Length: 1,483 km • Short‐listed Industrial Areas (IA):  Meerut‐Muzaffarnagar (U.P) ‐ Engineering/Manufacturing   Faridabad‐Palwal (Haryana) ‐ Engineering/Manufacturing   Jaipur‐Dausa (Rajasthan) ‐ Marble/Leather/Textile  Vadodara Ankleshwar (Gujarat) General Manufacturing Vadodara‐Ankleshwar (Gujarat) ‐ General Manufacturing  Nimach‐Nayagaon (Madhya Pradesh)   Dighi Port (Maharashtra) ‐ Industrial area with greenfield  port • Indian Railways has identified 11 sites for multimodal  logistics hubs and will invite private sector  participation through SPVs With major development along Delhi Mumbai corridor and golden quadrilateral project  With major development along Delhi‐Mumbai corridor and golden quadrilateral project in parallel, the region is likely to witness maximum development and investment WAREHOUSING INDUSTRY – INDIA.PPT 18
  19. 19. •Market Definition•Market Definition•Market Overview•Government Initiatives•Industry Characteristics & Trends•Major Players•Key Developments y p•Appendix WAREHOUSING INDUSTRY – INDIA.PPT 19
  20. 20. Key Trends Strong macroeconomic  fundamentals Large scale investments from  L l i t t f Changing tax policy boosting  Ch i t li b ti private equity firms warehouse outsourcing Trends Most profitable segment in  Realty players foraying into the  logistics leading to large scale  market  investments WAREHOUSING INDUSTRY – INDIA.PPT 20
  21. 21. Strong macroeconomic fundamentals driving the demand for warehouse servicesEXIM trade Retail Market INR bn USD bn8,000 , 400 Export +14% 14% 3126,000 Import 300 262 230 186 2054,000 2002,000 , 100 0 0 2001 2002 2003 2004 2005 2006 2007 2008 2001‐02 2002‐03 2003‐04 2004‐05 2005‐06Industrial Production Index Share of Organized Retail 400 Basic Goods Base: 1993‐94 = 100 % Growth of  Capital Goods 350 Consumer Goods 20 organized retail is  direct driver for  300 Intermediate Goods 15 warehousing Manufacturing 250 IPI 10 200 150 5 100 0 2001 2002 2003 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2009 2010 WAREHOUSING INDUSTRY – INDIA.PPT 21
  22. 22. Phasing out of CST and introduction of VAT encouraging warehouse outsourcing and value‐added servicesState of logistics outsourcing Outsourced activities•Until 2006, manufacturers maintained their  Outbound Transport 56% own warehouses for stock transfers and  avoided taxation on inter‐state sales under  id d i i l d Inbound Transport Inbound Transport 52% CST Clearing and Forwarding 52%•With phasing out of CST and introduction of  VAT regime, manufacturers are increasingly  EXIM Management 35% opting to outsource logistics functions opting to outsource logistics functions Outbound Warehousing 34%•Based on a 2007 survey: Inbound Warehousing 30%  Warehousing is a frequently outsourced function,  including outbound and inbound warehousing Labelling & Packaging 29%  Warehousing services such as labeling & Warehousing services such as labeling &  packaging, order picking, and inventory  Fleet Management 29% management are also being outsourced Order Picking 27%•Logistics outsourcing to 3PLs:  High prevalence in industries such as automotive  Inventory Management 24% and IT hardware & electronics Respondents: 130 companies in 15 industries  Low in consumer goods and pharmaceutical Source: Centre for Supply Chain Management, MDI, Gurgaon, India Growth in logistics outsourcing will provide an impetus to the organized sector and 3PL  Growth in logistics outsourcing will provide an impetus to the organized sector and 3PL operators, which currently account for less than 10% of Indian logistics WAREHOUSING INDUSTRY – INDIA.PPT 22
  23. 23. Logistics service provider are focusing on large scale investments in the warehousing segmentHigh Margins Expected Investment Levels (in USD mn)•Future investments estimated in the logistics  10‐20 market is expected to be dominated by large  >50 scale investments 20% %•A substantial share of these large investments  Majority of  45% logistics service  is expected to be made in the warehousing  providers making  space p 35% large investments large investments•Logistics players are primarily focusing on the  20‐50 warehousing market as the margins are  substantially higher than the other segments  Warehousing dominates Capex of the supply chain  of the supply chain•In comparison to other segments of logistics  M&A industry like transportation, which yield profit  IT 5% Logistics players  margins of ~20%, warehousing offer net  22% focussing on the  margins on EBITDA ~35‐40% margins on EBITDA ~35 40% most profitable  sector 42% 31% Warehousing Fleet expansion WAREHOUSING INDUSTRY – INDIA.PPT 23
  24. 24. Players are entering via independent ventures or through JV’s with warehousing development and management companiesReal estate companies foray into warehousing• In the current market scenario, real estate players are looking at generating revenues in the short run through  investments in logistics• Demand – supply mismatch allows real estate players to breakeven in5‐7 years as return on investment with  rentals alone yields between 12‐14% p.a. Company Investments • JV: Entered into a partnership with ProLogis a US based industrial real estate JV: Entered into a partnership with ProLogis, a US based industrial real estate  developer, for setting up warehouses across IndiaK. Raheja Corp • MOU: With West Bengal Industrial Infrastructure Development Corporation towards  expanstion at an investment of INR 23 bn • Acquisition: Planning to acquire land for projects in Bangalore, Chennai and Mumbai • JV: With Jebel Ali Free Zone (Jafza) International of Dubai towards developing 27 Tata Realty and  businesses and logistic parks across India at an investment of INR 100 bnInfrastructure Ltd  • Expansion: Large tracts of land have been identified and each park will take between (TRIL) six to seven years for completion • Expansion: Plans on developing warehouses in Chennai, Bangalore and Pune at an Nitesh Estates investment of INR 20 bnAkruti City • Expansion: Plans on developing 20 warehouses across India WAREHOUSING INDUSTRY – INDIA.PPT 24
  25. 25. Growth in the warehouse business has witnessed large scale investments from PE firmsPE activity in warehousing industry• The level of investment, by 2012, towards the development of warehousing space is estimated to be USD  500mn • Investments of USD 1 bn is expected towards developing 110  logistics parks by 2012 expanding over 3500  acres Year Logistics Company PE Investor Stake (%) Deal Size (USD mn) Apr ‐ Apr 2008 TVS Logistics Services Ltd TVS Logistics Services Ltd Goldman Sachs Goldman Sachs’ NA 20 Jan ‐ 2008 Om Logistics Merrill Lynch NA 24Aug ‐ 2007 Transport Corp (TCIL) Fidelity 7 11Aug ‐ 2007 Vikram Logistics Guggenheim Global  33 NAMar ‐ 2007 Sical Logistics IDFC NA 25Mar ‐ 2007 Delhi Assam Roadways Corp IDFC NA 11Mar ‐ 2007 DRS Group Kotak Mahindra PE NA 22.5 Jan ‐ 2007 BLR India Reliance Capital 31 12 Jun ‐ 2006 BLR India Reliance Capital 31 12 Jan ‐ 2006 Allcargo Movers New Vernon PE 6 13.3 WAREHOUSING INDUSTRY – INDIA.PPT 25
  26. 26. •Market Definition•Market Definition•Market Overview•Government Initiatives•Industry Characteristics & Trends•Major Players•Key Developments y p•Appendix WAREHOUSING INDUSTRY – INDIA.PPT 26
  27. 27. Market is extremely competitive with a large unorganized sector and the organized sector is dominated by PSU’sOverview Organized Sector (2008)•70‐75% of the organized market is accounted  Unorganized by PSUs 92%  Central Warehousing Corporation  Food Corporation of India   State Warehousing Corporation•Other major player Other major player  Transport Corporation of India  8%  Blue Dart OrganizedGrowth in Organized Sector•Existing and new players are constantly  expanding operations and are expected to  State Warehousing Central Warehousing 25% Corporation  continue to develop warehousing  Corporation infrastructure 14% Organized 2008 2012 CAGR 33% Food Corporation Area (mn. sq.ft.) 174 255 10% of India 28% Capacity (mn. MT) ( ) 80 125 12% Others WAREHOUSING INDUSTRY – INDIA.PPT 27
  28. 28. Government Players (1/2)Company Snapshot: Central Warehousing CorporationCorporate Information Financial PerformanceEstablished 1957 Revenue Revenue Profit INR mn INR Profit / Loss INR mn INRHeadquarters Mumbai 7,762 8,000 6,864 1,500Capacity 9.8 mn tonnes 6,000 1,000Location 499 warehouses , 4,000Key People • B.B.Pattanaik (Chairman and MD) 500 2,000 • D.K.Panwar (Chairman and MD) • Naveen Prakash( Joint Secretary) 0 0 2006‐07 2007‐08Business Highlights Business Outlook• Provides storage facilities for a wide range of products,  • Expansion: Plans on expanding existing warehousing  from agricultural to industrial goods from agricultural to industrial goods capacity in Kerala by 20,000 tonnes in 2009‐10 capacity in Kerala by 20 000 tonnes in 2009‐10• It has a market share of 14 % (2008) • MOU: Formed an association with the Ministry of • The company handled 941,872 TEUs in ’08 against  Consumer Affairs, Food & Public Distribution for  773,536 TEUs handled in the previous year, registering a  creating  additional storage capacity of 50,000 MT growth of 21.8% at their CFSs / ICDs growth of 21.8% at their CFSs / ICDs • MOU: With FACT as it plans to set up a modern state‐ With FACT as it plans to set up a modern state of‐the art CFS facility near the Kochi Port WAREHOUSING INDUSTRY – INDIA.PPT 28
  29. 29. Government Players (2/2)Company Snapshot: Food Corporation of IndiaCorporate Information Business HighlightsEstablished 1965 • Warehouses are extensively used for storing eatable  items Headquarters New Delhi • The corporation sees opportunity in diversifying and Capacity 24.5 mn tonnes  catering to warehousing of commodities apart from Location 1451 warehouses foodKey People • V.K.Malhotra (Chairman & MD) ( • Market Share: 33% (2008))Company Snapshot: State Warehousing CorporationsBusiness Highlights• These are under dual control of the respective State Government and CWC• Total share of capital is contributed equally by CWC and concerned state corporation• M k Sh Market Share: 25% (2008) 25% (2008)• Capacity: 18.73 mn tonnes (07‐08); 1576 warehouses • Maharashtra State Warehousing Corporation (MSWC) has the largest network of warehouses (693) in 165  centres with capacity of 11.71 lakh tonnes• Expansion: MSWC signed a MOU with NCDEX Spot Exchange Ltd towards developing 20 warehouses across MSWC signed a MOU with NCDEX Spot Exchange Ltd towards developing 20 warehouses across  Maharashtra WAREHOUSING INDUSTRY – INDIA.PPT 29
  30. 30. Private Players (1/5 )Company Snapshot: Blue DartCorporate Information Financial PerformanceEstablished 1983 Revenue Revenue Profit INR mn Profit / Loss INR mnHeadquarters Mumbai 9,825 10,000 8,118 800Capacity 0.15 mn sq ft (07‐08); 50 warehouses 8,000 6,698 600Location Bonded warehouses at Ahemdabad,  6,000 4,227 400 Bangalore, Chennai, Delhi, Mumbai,  B l Ch i D lhi M b i 4,000 Kolkata and Hyderabad 2,000 200Key People • Sharad Upasani (Chairman) 0 0 • Anil Khanna (MD) 2005 2006 2007 2008Business Highlights Business Outlook• Entered into surface movement of goods, with its  • Expansion: Establish 58 new warehouses by 2010  product offering named SurfaceLine towards building  product offering named SurfaceLine towards building translating to over 1 mn sq ft of warehousing space  translating to over 1 mn sq ft of warehousing space extensive capacity in the warehousing segment by investing INR 1 bn • It has set up 22,000 sq ft warehouse at Kona Expressway  • Expansion: Planning to build 7 warehouses in the  near Kolkata catering to its India‐Bangladesh service  east by 2010 adding 90,000 sq ft  route, launched jointly with DHL.   Locations identified are Bohoragora in Bengal, Orissa,  g g , ,• Developed their first 40,000 sq ft facility in Bangalore Assam border, Kona Express highway and Guwahati  highway WAREHOUSING INDUSTRY – INDIA.PPT 30
  31. 31. Private Players (2/5 )Company Snapshot: Gati Corporate Information Financial PerformanceEstablished 1989 Revenue Revenue Profit INR mn INR INR mn INR Profit / LossHeadquarters Secunderabad  6,000 5,755 2,500 4,577 4,610Capacity Mechantronic warehousing facilities  2,000 of 2 mn sq ft across all major cities 4,000 3,613 1,500LocationL i 22 warehouses across India 22 h I di 2,000 1,000Key People • Mr. K.L.Chugh (Chairman) 500 • Mr. Mahendra Agarwal (MD & CEO) 0 0 2004‐05 2005‐06 2006‐07 2007‐08Business Highlights Business Outlook• Introduced its 3PL services in 1997. A concept which was  • Expansion: Planning to increase capacity to 2.5 mn sq  not popular in India  not popular in India ft by June 2009 by investing INR 1.5 bn ft by June 2009 by investing INR 1 5 bn• Introduced state‐of‐the‐art mechantronics warehouses  • New Facility: Launched its 1.8 lakh sq ft modern  with APL racking and modern handling equipment in  mechantronic express distribution centre (EDC) at  major cities across India Jeedimetla in Hyderabad equipped with the most  modern warehousing technologies and equipment WAREHOUSING INDUSTRY – INDIA.PPT 31
  32. 32. Private Players (3/5 )Company Snapshot: Indo Arya  Corporate Information Financial PerformanceEstablished 1970 INR mn Revenue 5,000Headquarters New Delhi 4,200 4,000 3,500Capacity 0.83 mn sq ft; 0.3 mn sq ft under  construction  3,000 2,500LocationL i Delhi, Hyderabad, Bangalore and  D lhi H d b d B l d 2,000 2 000 Indore among others 1,000Key People Mr. R.P.Arya (Director) 0 2006‐07e 2007‐08e 2008‐09eBusiness Highlights Business Outlook• Management: It is undertaking warehouse management  • Expansion: The company plans to set up warehousing  for a clientele base which includes companies such as  for a clientele base which includes companies such as capacity of 2 mn sq ft by 2010 in  Kolkata, Chennai  capacity of 2 mn sq ft by 2010 in Kolkata Chennai ITC Foods, Pantaloon, Reliance, Nestle, Coca‐Cola and  and Mumbai  P&G  • Acquisition: Plans on acquiring freight forwarding • PE: Bolstered by the growth prospects, it is also  firms in India, France, Germany and China contemplating a 20% equity stake dilution to fund  • New Clientele: Providing Aditya Birla Retail exclusive New Clientele: Providing Aditya Birla Retail exclusive   investments warehousing space for its retail operations WAREHOUSING INDUSTRY – INDIA.PPT 32
  33. 33. Private Players (4/5 )Company Snapshot: Transport Corporation of India Corporate Information Financial PerformanceEstablished 1958 Revenue Revenue Profit INR mn Profit / Loss INR mnHeadquarters Gurgaon 15,000 400Capacity 7.5 mn sq ft (07‐08);9 mn sq ft (08‐10) 10,896 12,029 9,140 300 10,000Location Across India  7,359 200Key People • Mr. S. N. Agarwal (Chairman) 5,000 100 • Mr. D. P. Agarwal (Vice‐Chairman &  Managing Director) 0 0 2004‐05 2005‐06 2006‐07 2007‐08Business Highlights Business Outlook• Largest Indian integrated supply chain player India  • Expansion: Plans on developing warehouses in •L Large fleet size of 7000 trucks and 6 cargo ships  fl t i f 7000 t k d6 hi Chakan, Gurgaon at an investment of INR 300 mn. It  Chakan Gurgaon at an investment of INR 300 mn It is expected to be operational by 2009• JV: Forayed into third party logistics solutions by forming  a joint venture with Mitsui & Co in 1999  • PE/VC: Fund managers such as, ICICI, Kotak Mahindra  and Fidelity have been looking to invest in TCI • PE: Plans on raising INR 500 ‐ 750 mn in 08‐09(3Q) by Plans on raising INR 500  750 mn in 08 09(3Q) by  selling  10% of its promoter holding in the company WAREHOUSING INDUSTRY – INDIA.PPT 33
  34. 34. Private Players (5/5 )Company Snapshot: National Bulk Handling Corporation Corporate Information Business HighlightsHeadquarters Mumbai • Expansion: Plans set up 200 warehouses between  2011‐13 at an investment of ~INR 50 bn Capacity 1.8 mn MT, 381 storage facilities;  manages 3000+ storage facilities with  • MOU: With Haryana Warehousing Corporation  total of over 4+ mn MT (HWC) towards a strategic collaboration in  commodity and warehousing management servicesLocation Pan India presence Pan‐India presence • MOU: With Bank of India to work in warehouse‐Key People • Mr. Anil K Choudhary (MD & CEO) based receipt financing services in 2007 Company Snapshot: Kalpataru GroupCorporate Information Business HighlightsHeadquarters Mumbai • Expansion: 40 warehousing and agriculture logistics Capacity 200,000 MT of dry storage and 32,000  parks in 2009‐2012 parks in 2009 2012 MT of cold storage  First phase – Plans to build 11 parks at a cost of INR 1.4 bn. Location 4 warehouses across Rajasthan  Second phase – 14 parks will be in Maharashtra and Madhya Pradesh Key People y p Mr. Ajay Munot( Director ) j y ( )  Third Phase Mr. Manish Mohnot ( Director) – Cover Andhra Pradesh, Haryana and Punjab WAREHOUSING INDUSTRY – INDIA.PPT 34
  35. 35. Market has observed entry of new private playersGrowing private participation• Private players are entering the warehousing sector to capitalize on the tremendous growth opportunities g p• Private investment in warehousing is restricted to port areas• The emergence of 3PL industry has led to various international players investing in developing warehousing facilities  in India Company Investment and PartnershipsAllcargo Global Logistics ll l b l i i • Expansion: Planning to invest INR 3.4 bn in order to set up ten logistic parks at  Mumbai, Hyderabad, Kolkata, Bangalore, Ahmedabad, Nagpur and DelhiReliance Logistics Ltd (RLL) • Expansion: It plans on setting up logistics parks in all forthcoming SEZs namely in  p p g p g p g y Navi Mumbai, Haryana, Jamnagar and others WAREHOUSING INDUSTRY – INDIA.PPT 35
  36. 36. •Market Definition•Market Definition•Market Overview•Government Initiatives•Industry Characteristics & Trends•Major Players•Key Developments y p•Appendix WAREHOUSING INDUSTRY – INDIA.PPT 36
  37. 37. Key DevelopmentsDate Development25‐May ‐09 Central Warehousing Corporation plans on expanding their infrastructure in the State of Kerala. It plans  on adding an additional capacity of ~20,000 tonnes through four warehouses expected to be developed  by 2009‐10.16‐May‐09 NCDEX initiated a warehouse receipt‐based delivery system in rubber futures. Towards this endeavour,  they entered into a partnership with Central Warehousing Corp. who will be responsible for the  examination and storage of rubber. It forwarded this plan as there are small margins in rubber trade and  requires a fast turnaround time.5‐May‐09 The Central Board of Excise and Customs included Thiruvallur district, beyond north Chennai, as on of the  The Central Board of Excise and Customs included Thiruvallur district beyond north Chennai as on of the destinations where export warehouses can be developed. It will benefit players as container traffic at the  Chennai port has increased substantially delaying operations and it will allow warehouses to be located  closer to customers leading to cost efficiencies. 26‐Apr‐09 Infrastructures Kerala Ltd (Inkel) plans on developing construction parks in Thiruvananthapuram, Kochi,  Thrissur and Kozhikode which will have provisions for manufacturing of building materials and  h d h k d h h ll h f f f b ld l d warehousing. An investment of ~INR 6.6 bn is estimated.3‐Feb‐09 Uniworld Logistics Private Limited plans on setting up their first integrated logistics park at  Irungattukottai. The project is expected to cost USD 10 mn. The facility will be equipped with an ICD,  airfreight station, bonded warehouses, customs clearance, general warehousing and a distribution  airfreight station bonded warehouses customs clearance general warehousing and a distribution centre.  WAREHOUSING INDUSTRY – INDIA.PPT 37
  38. 38. •Market Definition•Market Definition•Market Overview•Government Initiatives•Industry Characteristics & Trends•Major Players•Key Developments y p•Appendix WAREHOUSING INDUSTRY – INDIA.PPT 38
  39. 39. Appendix I: Free Trade Warehousing Zones across India Approval  Area  Developer  District State  Status (Hectares)Notified J Matadee Eco Parks Private Limited Kancheepuram Tamil Nadu 40.625Formal Balaji Infra Projects Limited (BIPL) Balaji Infra Projects Limited (BIPL) Raigadh Maharashtra 100Formal Chiplun Infrastructure Private Limited ‐ Maharashtra 40Formal J. Matadee Eco Parks Pvt. Ltd. Kancheepuram Tamil Nadu 40Formal Jafza Chennai Business Parks Private Limited Tirvallur Tamil Nadu 136.38Formal Jhunjhunwala Vanaspati Ltd. Chandauli Uttar Pradesh 103.63Formal Haldia Free Trade Warehousing Private Limited Haldia West Bengal 45.72In‐principle LMJ Warehousing Private Limited Kandla Gujarat 40In‐principle Shipco Infrastructure Private Limited (SIPL) ‐ Karnataka 120In‐principle Arshhiya Technologies International Limited (AIL) Panvel Maharashtra 68In‐principle Vibrant IL&FS Consortium Naigaon Maharashtra 46.94In‐principle DLF Universal Limited Amritsar Punjab 40In‐principle Greater Noida Integrated Warehousing Pvt. Ltd. Greater Noida Uttar Pradesh 80 WAREHOUSING INDUSTRY – INDIA.PPT 39
  40. 40. Appendix II: State Wise Storage capacity of FCI, CWC and SWCs (In Million MT) States FCI CWC SWC Total States FCI CWC SWC TotalAndhra Pradesh 3.48 1.37 2.58 7.43 Manipur 0.02 0.00 0.00 0.02Arunachal Pradesh 0.02 0.00 0.00 0.02 Meghalaya 0.03 0.00 0.01 0.04Assam 0.25 0.06 0.26 0.57 Mizoram 0.02 0.00 0.00 0.02Bihar 0.52 0.11 0.25 0.88 Nagaland 0.03 0.01 0.00 0.04Chattisgarh 1.31 0.21 0.83 2.35 Orissa 0.68 0.32 0.42 1.42Goa 0.01 0.05 0.00 0.06 Punjab 6.62 0.7 5.7 13.02Gujarat 0.59 0.70 0.14 1.43 Rajasthan 0.9 0.72 0.86 2.48Haryana 2.13 0.53 1.37 4.03 Sikkim 0.01 0.00 0.00 0.01Himachal Pradesh 0.03 0.07 0.00 0.10 Tamil Nadu 0.75 0.60 0.65 2.00Jammu & Kashmir 0.12 0.00 0.00 0.12 Tripura 0.04 0.02 0.00 0.06Jharkhand 0.12 0.03 0.00 0.15 Union Territories 0.54 0.18 0.00 0.72Karnataka 0.59 0.45 0.89 1.93 Uttar Pradesh 2.52 1.10 2.83 6.45Kerala 0.53 0.13 0.20 0.86 Uttaranchal 0.16 0.08 0.00 0.24Madhya Pradesh 0.56 0.56 1.17 2.29 West Bengal 1.00 0.77 0.21 1.98Maharashtra 1.62 1.48 1.18 4.28 Total1 25.2 10.25 19.55 55.00 Storage Capacity Constructed 2001‐ 07‐08  Achieved (as of  NOTE: 1 ‐ As on 01‐04‐2007  Player 02‐03 03‐04 04‐05 05‐06 06‐07 02 (target) 31.12.07) 2 ‐ Includes 0.16 mn MTs constructed for FCI  FCI 0.16 0 16 0.09 0 09 0.13 0 13 0.09 0 09 0.02 0 02 0.02 0 02 0.02 0 02 0.01 0 01 under 7 years guarantee scheme d 7 t h CWC 0.32 0.352 0.29 0.11 0.27 0.37 0.213 0.18 3 ‐ Includes railside warehouses under CRWC Ltd. WAREHOUSING INDUSTRY – INDIA.PPT 40
  41. 41. Appendix III: Logistics Parks Planned Location State  Number Location State  NumberAmbala Haryana 2 Indore Madhya Pradesh 5Chandigarh Punjab/Haryana 1 Nagpur Maharashtra 4Sonepat Haryana 4 Mumbai Maharashtra 8Jaipur Rajasthan 2 Nashik Maharashtra 1Kanpur Uttar Pradesh 1 Ahmedabad Gujarat 1Muzzaffarpur‐Hajpur Bihar 3 Gandhinagar Gujarat 1Ranchi Jharkhand 1 Hyderabad Andhra Pradesh 5Jamshedpur Jharkhand 1 Vizag Andhra Pradesh 1Kolkata West Bengal 4 Chennai Tamil Nadu 3Guwahati Assam 3 Bhopal p Madhya Pradesh y 2Raipur Chattisgarh 1 Bangalore Karnataka 3 WAREHOUSING INDUSTRY – INDIA.PPT 41
  42. 42. Thank you for your timeFor an updated report or any customized research requirements, please contact:Gaurav KumarE‐Mail: gaurav.kumar@netscribes.com; sales@netscribes.comPhone: +91 33 4064 6214; +91 983 030 9715Netscribes’ Services:RESEARCH & ANALYTICSRESEARCH & ANALYTICS MARKET INTELLIGENCE MARKET INTELLIGENCE CONTENT SOLUTIONS CONTENT SOLUTIONSInvestment Research Market Monitoring & Competitive  Social Media MarketingEnterprise Market Research Intelligence Marcom Support ServicesPatent Research Sales & Prospect Intelligence Content Management ServicesSyndicated Market ResearchS di t d M k t R h Listening & Media Monitoring Li t i & M di M it i Book Packaging Services B kP k i S i Brand SurveillanceFor further details, visit us at: www.netscribes.comAbout NetscribesNetscribes supports the organic and inorganic growth objectives of global corporations through a combination of Enterprise Market, Investment & Patent Research, Market & Sales Intelligence, Social Media Monitoring & Management and Custom Publishing solution.Disclaimer: This report is published for general information only. High standards have been used for preparing this market research report; Disclaimer: This report is published for general information only High standards have been used for preparing this market research report;however, Netscribes, Inc. or “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes and prior permission is required for guidelines on reproduction. WAREHOUSING INDUSTRY – INDIA.PPT 42

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