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Govt initiatives to drive warehousing sector

Warehousing and logistic sector is expected to grow further and attract investment on the back of the government’s plan to set up multimodal logistic parks and other initiatives to seamless connect urban transport.

The Union Budget 2022 emphasised the execution of PM GatiShakti National Master Plan encompassing the seven engines for economic transformation, seamless multimodal connectivity and logistics efficiency.

The projects pertaining to these seven engines in the National Infrastructure Pipeline (NIP) will be aligned with the PM GatiShakti framework. The touchstone of the Master Plan will be world-class modern infrastructure and logistics synergy among different modes of movement, both of people and goods, and the location of projects.

The announcement by the Union government for building 25,000 km of new highways, GatiShakti Masterplan for expressways, 100 new cargo terminals with multimodal logistic park and initiatives to connect urban transport to railways will give the much needed boost to new warehousing and logistics facilities across the country.

The data exchange among all mode operators will be brought on the Unified Logistics Interface Platform (ULIP), designed for the Application Programming Interface (API). This will provide for efficient movement of goods through different modes, reducing logistics cost and time, assisting just-in-time inventory management, and eliminating tedious documentation.

Moreover, contracts for the implementation of multimodal logistics parks at four locations through public-private partnership (PPP) mode will be awarded in 2022-23. A favourable regulatory environment, along with the Centre’s support through policy and reforms will lead to higher spending in infrastructure and will lift the overall demand for modern warehousing.

Buoyed by the thrust on manufacturing by the Union government through various schemes like the Production Linked Incentive (PLI), warehousing companies are expanding to Tier-II cities and Tier-III cities.

Recently, Snowman Logistics completed construction of a temperature-controlled warehouse at Coimbatore, Tamil Nadu. The facility, with a total capacity of 4,020 pallets, became operational in February 2022. It is a multi-temperature facility designed to store products ranging from ambient temperature to -25 degree centigrade with eight chambers, six loading bays with related infrastructure that includes G+ five racking system, modern handling equipment and ample refrigerated truck parking space.

The facility will mainly cater to the storage, handling and transportation of quick service restaurants, poultry, ready-to-eat food, ice cream, dairy products, confectionery & bakery products, fruits & vegetables, pharma, among others.

The company has also started its SnowServe facility – a fulfilment centre for Amazon India in Pune, Maharashtra. The facility is spread across 12,000 sq ft area and has sorting, grading, packing and labelling process lines.

Amazon India has leased 1,54,000 sq ft warehousing facility in Khed, Pune for 20 years from industrial real estate and logistics parks developer IndoSpace. The company has leased the space through its subsidiary Amazon Transportation Services from Rohan Landspace, an affiliate entity of IndoSpace. The total lease tenure of 20 years includes a lock-in period of first five years.

Apart from this, the ecommerce company is also in talks with Horizon Industrial Parks, to lease another half a million sq ft of warehouse space in Delhi and Alipore in Kolkata. The Delhi in-city warehouse will come up on 36 acre land bought by Blackstone in Delhi from TARC in a deal valued at Rs 295 crore.

Coldman Logistics, a player in the cold chain industry, has already leased out around five lakh sq ft of warehouse space to multinational FMCG customers in the locations like Rajpura in Punjab, Ahmedabad, JNPT near Mumbai and Baramati. With the demand rapidly increasing, the company plans to achieve one million sq ft of warehousing space by FY23 with upcoming warehouses in Hyderabad, Noida, Coimbatore and Kolkata.

Prozo is planning to expand its warehousing portfolio to around one million sq ft in the next one-and-half years. In Phase-I, the company intends to create its presence in Tier-1 and Tier-2 cities. The company intends to have presence in 20 centres by 2023 and to 100 fulfilment centres by 2025.

The company is currently present in Mumbai Metropolitan Region, Hyderabad, Kolkata, Delhi, Noida and Bengaluru, and is now looking to create its warehouses in Chennai, Cuttack, Bhubaneswar, Lucknow, Guwahati, Bhatinda, Ludhiana, Jammu, etc. It has so far raised USD three million in total three rounds from high networth individuals (HNIs), family offices and venture capital firm Earlsfield Capital Partners.

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