Evolv­ing Ware­hous­ing in­fra­struc­ture

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An­shul Sing­hal

The in­creas­ing need for In­dian in­dus­tries to com­pete in a global mar­ket across cost, qual­ity and ser­vice di­men­sions re­quire ef­fi­cient ware­hous­ing strate­gies. An­shul Sing­hal, ceo, em­bassy in­dus­trial Parks elab­o­rates.

Over a pe­riod of time ware­hous­ing in­dus­try in In­dia has evolved from just brick and mor­tar shel­ters for the pur­pose of stor­ing goods to highly so­phis­ti­cated stock­rooms, where, thanks to ad­vanced track­ing mech­a­nism, each con­sign­ment can be tracked on a real time ba­sis at the click of a but­ton. With­out these state-of-theart fa­cil­i­ties it would have been a Her­culean task for com­pa­nies to ship and de­liver con­sign­ments to the des­ig­nated con­signee, and the rise of the e-tail in In­dia would have re­mained but a fairy tale.

Not just e-tail, in any in­dus­try seg­ment, which deals with phys­i­cal goods, ware­houses play a vi­tal role in the en­tire value chain from raw ma­te­rial to cus­tomer de­light. In­dia’s lo­gis­tic and ware­hous­ing sec­tor is poised for ac­cel­er­ated growth, led by GDP re­vival, ramp up in trans­port in­fra­struc­ture, e-com­merce pen­e­tra­tion, im­pend­ing GST im­ple­men­ta­tion, and other ini­tia­tives like ‘Make in In­dia.’

In­dia’s Third Party Lo­gis­tics (3PL) mar­ket is ex­pected to grow with CAGR of 6% over the next five years. The to­tal stock of Grade A and Grade B ware­houses in the coun­try grew about 16% in 2016. The global mar­ket for ware­hous­ing ser­vices is on pace to grow to ris­ing de­mand from the man­u­fac­tur­ing, phar­ma­ceu­ti­cal, and health­care sec­tors. As per the JLL re­port, 2018 fore­casted sup­ply for ware­houses stock is 157 mil­lion sq. feet in Grade A and Grade B, the in­cre­men­tal de­mand be­tween 2016 and 2020 is ex­pected to be 218 mil­lion sq. ft. The deficit be­tween pro­jected de­mand and sup­ply be­tween 2016 and 2020 cur­rently is 129 mil­lion sq. ft. With the im­ple­men­ta­tion of GST, many man­u­fac­tur­ing in­dus­tries would shift fo­cus to­wards the hub­spoke model of ware­hous­ing which would even­tu­ally re­duce the smaller ware­houses present across lo­ca­tions and in­crease big­ger ware­houses.

With the im­ple­men­ta­tion of GST, many man­u­fac­tur­ing in­dus­tries would shift fo­cus to­wards the hub-spoke model of ware­hous­ing which would even­tu­ally re­duce the smaller ware­houses present across lo­ca­tions and in­crease big­ger ware­houses.

The ware­house and dis­tri­bu­tion cen­tres form im­por­tant nodes in a sup­ply chain net­work. They sup­port the move­ment of ma­te­ri­als, stor­ing goods, pro­cess­ing prod­ucts, de-ag­gre­gat­ing ve­hi­cle

loads and cre­at­ing stock keep­ing & as­sem­bling ship­ments. Thus, ef­fi­cient man­age­ment of ware­houses helps to op­ti­mise the pro­duc­tion and dis­tri­bu­tion pro­cesses, cost re­duc­tion and ser­vice en­hance­ment. In sync, ware­hous­ing in­dus­try in In­dia has evolved from just brick and mor­tar shel­ters for stor­ing goods to highly so­phis­ti­cated stock­rooms. With ad­vanced track­ing mech­a­nism, each con­sign­ment can be tracked on a real time ba­sis at the click of a but­ton. With­out these state-of-the-art fa­cil­i­ties, the rise of e-tail in In­dia would have re­mained but a fairy tale.

com­pany’s Present Projects AND lo­ca­tions

Em­bassy In­dus­trial Parks is a joint ven­ture be­tween the Em­bassy Group and War­burg Pin­cus. The tie up has helped and al­lowed Em­bassy In­dus­trial Parks to lever­age the global ex­pe­ri­ence of War­burg Pin­cus in in­dus­trial real es­tate to bring qual­ity Grade A in­dus­trial, light man­u­fac­tur­ing and ware­hous­ing spa­ces in In­dia.

Since our com­mence­ment, over the last 2.5 years, we have ac­quired im­por­tant parcels of land across the coun­try. Em­bassy In­dus­trial Parks aims to build 15-20 mil­lion square feet of in­dus­trial and ware­hous­ing space over the next 5 years across In­dia. We have al­ready signed lands which are at var­i­ous stages of ac­qui­si­tion in Chen­nai, Delhi, Pune, Mum­bai & NCR and we are ac­tively work­ing to ac­quire lands in Gu­jarat and Kolkata. Em­bassy In­dus­trial Parks has in­vested a to­tal cost of INR 140 crore in Gur­gaon pro­ject and has also in­vested INR 350 crore to build a 1.1-mil­lion sq ft in­dus­trial park at Chakan, Pune.

Em­bassy In­dus­trial Parks pro­vides build-to-suit fac­tory build­ing and 100% legally com­pli­ant ware­houses on lease ren­tal ba­sis which means no up­front cap­i­tal in­vest­ment by the com­pany. The value propo­si­tion that Em­bassy In­dus­trial Parks of­fers to clients in­clude: • Us­ing pre-en­gi­neered steel

build­ings • Tak­ing strate­gic land po­si­tions • De­ploy­ing cap­i­tal to scale with

the clients • Fol­low­ing cus­tomers across key

mar­kets in In­dia • Em­ploy­ing con­sul­ta­tive ap proach and do­main ex­per­tise to op­ti­mize con­trol costs and im­prove ef­fi­ciency • Ex­e­cute projects “on time, at

cost and as per de­fined specs” • Fol­low due au­dit, con­trac­tual, leas­ing, le­gal, and statu­tory & gov­er­nance pro­cesses to meet the needs of MNC clients - • Of­fer post con­struc­tion fa­cil­ity man­age­ment through Em­bassy Ser­vices, the prop­erty & fa­cil­ity man­age­ment wing

We pro­vide rain wa­ter har­vest­ing, so­lar pan­els, en­ergy man­age­ment and so on. Our parks have the right ameni­ties such as truck park­ing, traf­fic man­age­ment, 24/7 CCTV con­trolled se­cu­rity, fire man­age­ment, In­cu­ba­tion ware­houses, ATM’S emer­gency med­i­cal ser­vices and so on.

the fu­ture OUTLOOK FOR the sec­tor

The main chal­lenges the in­dus­trial and lo­gis­tics com­pa­nies face are in­ven­tory ac­cu­racy & lo­ca­tions, in­fra­struc­ture is­sues, re­dun­dant process and pick­ing op­ti­miza­tion. The lo­gis­tic sec­tor in In­dia is also frag­mented and un­der de­vel­oped with rel­a­tively high lo­gis­tics costs due to poor in­fra­struc­ture and a lay­ered tax sys­tem con­tribut­ing to sig­nif­i­cant de­lays & in­ef­fi­ciency. GST regime prom­ises one coun­try; one tax that will im­mensely en­able lo­gis­tics and trans­porta­tion sec­tors and im­prove the ease of do­ing busi­ness.

The do­mes­tic ware­hous­ing in­dus­try will see con­sol­i­da­tion with the roll-out of the goods and ser­vices tax. Fa­cil­i­ties will re­lo­cate to con­sumer-driven and trans­porta­tion net­work ar­eas from the cur­rent tax-friendly lo­ca­tions. We even expect sec­tors like ecom­merce, au­to­mo­tives, con­sumer elec­tron­ics, phar­ma­ceu­ti­cals; FMCG will own/lease larger ware­houses at prime lo­ca­tions like Mum­bai, Delhi, Ahmed­abad, Chen­nai, Ben­galuru and Hy­der­abad.

GST will en­sure that In­dia for the first time will be ex­posed to con­sol­i­dated large space cen­tral ware­hous­ing parks in­stead of the cur­rent scat­tered poor qual­ity stand­alone spa­ces. The com­pany plans to build about 20 mil­lion sq ft of lo­gis­tics parks over the next five years at a to­tal in­vest­ment of about USD 1 bil­lion. We are cur­rently fo­cussing at tak­ing good land po­si­tions in key mar­kets—close to con­sump­tion cen­tres with ac­tive in­dus­trial pres­ence like Mum­bai, Delhi, Ben­galuru, Chen­nai and Pune.

Ware­hous­ing and in­dus­trial lo­gis­ti­cal re­quire­ments are grow­ing and this growth is here to stay. The big­gest in­di­ca­tor of its fu­ture is that the gov­ern­ment of In­dia plans to build mul­ti­modal lo­gis­tic parks across the coun­try with an in­vest­ment of INR 33,000 crore in a bid to bring down costs in­curred n lo­gis­tics. It will also lay low the over­all freight cost re­duce ve­hic­u­lar pol­lu­tion and con­ges­tion and will en­able re­duc­tion of ware­hous­ing costs of the coun­try.

An­shul SING­HAL

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