Warehousing to get Rs5,000 crore investment over next three years
November 11, 2009
India’s warehousing sector is likely to witness investments of over Rs5,000 crore over the next three years that would increase the warehousing capacity by 30 million square feet (sq ft). But this is not sufficient to meet the current deficit of 80 million sq ft, said industry experts.
“The investments being made by major players from the industry are expected to commence shortly and would spread over the next three years,” said Tushar Jani, chairman, logistics sub-committee, CII-Western region.
Major players like Transmart India Pvt Ltd, Gati Ltd, AFL Logistics, SafeExpress, Future group and some real estate developers are planning to invest in warehousing. Transmart alone is planning to invest about Rs1,000 crore over the next three years.
“The investment of Rs5,000 crore is not enough to meet the current deficit of 80 million sq ft. Availability of suitable land is one of the reasons for less investments in the warehousing sector, which led to this deficit of 80 million sq ft,” Jani added.
The capacity addition is likely to take place in metro cities as well as Tier II cities such as Ahmedabad, Coimbatore, Indore and Chandigarh. Transmart is planning to develop warehouses at Chennai, Bangalore and Kolkata.
“We have already built one in Mumbai and are building one in Delhi. All the warehouses would be completed in the next three years,” Jani, the promoter of Transmart, said.
Jani said he feels after capacity addition, users would be able to cut their inventory costs by around 10% to 15%. “Third party logistics services in the warehousing segment will help users avail services at variable costs and thus help cut costs by 10% to 15 % of the inventory costs,” he explained.
The current storage capacity of the organised warehousing sector in India stands at 37.60 million tonnes, including the warehouses owned by state-run Food Corp of India (FCI) and Central Warehousing Corp of India (CWC). - Amritha Pillay[email protected]