12 December 2019

Table of Contents for Warehousing and Warehousing Equipment





Interaction-Anshul Singhal, CEO, Embassy Indl Pa

Our main goal is to meet growing demands

 

 

Embassy Industrial Parks (EIP) is spending almost $1 billion in setting up greenfield and brownfield infrastructure required to run efficient logistics operations across India. They are committed to bringing quality Grade A industrial, light manufacturing and warehousing spaces in close proximity to leading consumer and industrial centres across India. ANSHUL SINGHAL, CEO, EMBASSY INDUSTRIAL PARKS, highlights the latest trends of the warehousing sector, modern technologies and innovations, growth drivers of the industry and a lot more with CONSTRUCTION OPPORTUNITIES.

 

 

 

Briefly give us an overview of the Indian Warehousing sector and the latest trends

 

The Indian economy has been consistently growing at 8.4 percent since 1991(7.7per cent in 2018 and expected to grow at 8.2 per cent in 2018-19 ) which is only next to France ( India stands at 7th rank). Our Population is about 1.31 billion growing at 1.3 percent which is likely to be 1.7 billion later this century. Our Life expectancy has gone up from 69 years from 27 at the time of independence. This means what, that people will have needs and they needs to be supplied. Hence more and more organized warehousing is needed. It is predicted that over 85per cent of all businesses will be digital within the next five years. As such, warehouse operators and logistics firms need to react quickly by implementing the latest technical innovations. Not only will this ensure that companies will be thoroughly future-proofed, but supply chains will be operating at peak efficiency – great for customers and businesses alike.

 

 

Like most other industries, warehousing and logistics is currently confronting major change in India; and this change brings opportunity. Logistics firms are facing an era of unprecedented change as digitization takes the front and customer expectations evolve. A huge percentage of warehouses plan to expand their technology investments in future. From efficient transport management system to data analytics, cloud computing, Internet-of-Things and enterprise mobility solutions, 2018 has seen much more in the logistics industry. 2019 is going to be the year where technological advancements will take logistics & supply chain industry to the next level.2020 will leave behind paper records and focus will be around technology. All third party logistics companies will go for mobile technology.  All this to provide faster and reliable delivery services. Consumers are demanding, faster logistics with more options. It has become essential for the service providers to use innovations to utilize maximum space, manpower, warehouses, vehicles etc. with control on wastage & fuel charges.

 

 

 

Briefly tell us about the role played by your company in the warehousing /logistics space and the services offered? Tell us of the warehousing and logistics capacities of your firm,  geographies, investments?

 

 Grade A and B warehousing stock will grow at a CAGR of 21 per cent year-on-year taking the total tally of warehouse space in India to 297 million sq. ft. by the end of 2021. Warehouses play a vital role in the entire value chain from raw material to customer delight. Embassy Industrial Parks is investing 1 billion USD to address the challenges of companies grappling withinefficient industrial and warehousing spaces in a large, diverse and geographically distributed market like India. Embassy Industrial Parks is committed in bringing quality Grade A industrial, light manufacturing and warehousing spaces in close proximity to leading consumer and industrial centres across the country. We already have presence in 6 key cities - Delhi, Mumbai, Bangalore, Pune, Hyderabad& Chennai. We are rapidly moving to newer markets also.

 

 

We aim to build 35 million sq. ft. of industrial and warehousing space over the next three years across India. We have already signed MOUs with governments of Haryana &Kolkatta for over a billion INR.  The group has been able to build our presence in every real estate vertical and have a profound understanding and market share of this industry. Embassy Industrial Parks is set up as independent business vertical, professionally managed, equipped with the right resources, skill sets, and necessary empowerment

 

 

 

Elaborate on the modern technologies and innovations leveraged in your facilities and  USP’s vis-à-vis competition.

 

An effective CEO has to constantly keep innovating. Embassy Industrial Parks was a start-up not very long ago but today, in various formats, it largely represents the evolution of warehousing in India as an industry. An organizational culture as such has to be deliberately worked on. We are fortunate to belong to a mother ship brand – Embassy Group that possesses such values. We collaborate our internal and external resources to bring expertise and knowledge banks into the organization. We are constantly using digital platforms to maintain process where every area of the company can be managed and tracked. Our partners are well-versed with latest and future trends in the construction industry. Over time the team has become intuitive but we depend on data-analytics. So the project & procurement management are built on it. Our approach is customer driven so at all times we have to offer transparency and customization. We have to be risk averse and provide further mobility to our projects so we strategize and have a long-term perspective.

 

 

 

What are the drivers for warehousing/logistics business and how do you see business through 2019 and onwards?

 

The presence of a robust logistics-related infrastructure and an effective logistics management system facilitates seamless movement of goods from the point of origin to that of consumption, and aids an economy’s movement to prosperity. The progress of logistics sector holds an immense value for Indian economy as well; as such advancement would increase exports, generate employment and give the country a significant place in the global supply chain. As per the Economic Survey 2017-18, the Indian logistics sector provides livelihood to 22 million-plus people and improving the sector would facilitate a 10per cent decrease in indirect logistics cost, leading to a growth of 5-8per cent in exports.

 

 

Further, the Survey estimates that the worth of Indian logistics market would be around US$ 215 billion in next two years compared to about US$ 160 billion currently. The boom in next couple of years is expected largely due to the implementation of Goods and Service Tax (GST). Given this background, the interest on behalf of the foreign funds is likely to remain robust. The sector will see a lot of deals, especially in the logistics real estate space. Logistics Real Estate is going to see an ocean of change considering that the funds are looking to build high quality yield assets with top notch tenants. The sector on the whole will see a lot of investment activity coupled with consolidation down the road.

 

 

 

What are the challenges that come your way in developing warehousing infrastructure?

 

In a highly price sensitive market, acceptance of the premium required to operate out of modern Grade A spaces could be seen as a challenge initially. However when companies realize the lifecycle benefits in terms of long term costs and operational efficiency we feel confident that there will be a significant upshift in demand for such space.

 

 

 

Key learning’s from your experience and how they can be applied to the forthcoming projects?

 

Since our inception, it has been a learning curve for us. Having a first mover’s advantage means you enjoy that position till other’s catch up, the other side of that coin is that you apply all new innovations and strategies before others and hence have no chance to learn from other’s mistakes. We at Embassy take pride in our ability of identifying the future a little before it’s time.

 

 

This allows great learning for us as well for the entire industry. The most important learning has been to secure strategic land locations in key micro markets at the right micro market price and zone. We have been doing so for 4 years now. We have bought important parcels of land across the country; each state in India possesses unique challenges like land-laws, approvals, conversion-process, titles related diligence & cultural challenges. We have learnt to deal with these in any part of the country. We have also mastered construction of Grade A quality facilities & further know how to maintain & manage these developments.

 

 

 

What are the key differences between warehousing infrastructure in other countries and India?

 

The warehousing in the other countries is a fairly established concept. These warehouses are highly automated and quite advanced. Infrastructure is another key area where India and the West stand poles apart. Our counterparts in the developed countries are equipped with modern equipment for various tasks such as material handling, loading and unloading of goods. Although India is quiet progressive in their attempt to develop this, technology stands to be another differentiator. Our Indian warehousing industry is still at a nascent stage. It has access to abundant and cost- effective labour but the mechanism to train the staff is not efficient. The Indian warehousing sector is yet to develop its design, automation and technology. However it seems to be evolving rapidly.

 

 

Which are the promising regions for warehousing infrastructure development and what are your company’s plans to tap these opportunities.

 

Talking specifically, we are looking to cater to the booming needs for logistics and warehouses space from sectors such as e-commerce, pharma, healthcare, FMCG, apparels and telecom, among others. We are acquiring land tracts which can be used to set up modern and well-planned industrial, light manufacturing and warehousing facilities.

 

 

We are looking at cities that are major consumption centres where there is a large demand for grade A warehouse.  Most of the warehousing today is Non- compliant and are not well constructed. There are maintenance issues with leaking roofs and chipped floor; and hence, the demand for grade A warehouses.  We plan to ambitiously go out there and cater to all such growing demands.

 

 

 

Detail us on your company’s expansion plans and future investments

 

We were very clear about our five-year vision at step 1. We are planning to set up about 8 to 10 parks around eight key-cities that include Mumbai, Delhi, Bangalore, Pune, Chennai, Hyderabad, Kolkata and Ahmedabad.  There will be more than one park in Delhi and Mumbai; 9 parks, over the next 3 years which will total to 35 million sq. ft. of potential development . We plan to buy land with our equity line of 250 million USD.

 

 

 

Future outlook for the industry and from a company perspective?

 

After a long time, the Indian government has implemented investor friendly policy decisions. GST and Make in India campaign have facilitated infrastructure growth especially for the logistic business. Since the government is in decision to launch multimodal logistics parks and a host of such policy level changes allowing ease of business. I feel 2019 will see encouraged inflow of FDI and to encourage today’s digital India, it will bring about solutions for the challenges of digital divide and accelerate efforts to make India the next driver in innovation. While we have seen a lot of technology conversions over the last few years, what is even more fascinating is the expectation that the next two decades will see technology innovations being moved up at a faster pace than ever before.

 

 

Technological change will continue to expand in the newly acquired - Infrastructure status and will further simplify approval process for affordable projects, create clear guidelines and increase transparency in the segment. This will further make this market more accountable and attract debt and pension funds to invest in the warehousing segment. In the current markets, Grade A quality industrial real estate has proven to be the most dependable asset class. What commercial offices did for realty a few years ago, is what industrial real estate is on it’s way to be. The returns for organized players have been exciting. Our main goal is to meet growing demands. Well-located industrial parks will yield promising returns.




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