Post pandemic, what are the trends shaping the warehousing sector in India?
The warehousing industry has actually performed well during the pandemic and its aftermath. In fact, the utility of the organized warehousing sector was most evident during the pandemic, as it played a cardinal role in keeping the country moving despite the lockdowns. Along with improved logistics activity, warehousing helped ensure that essential goods and supplies were delivered to the remotest of places across the country. Despite hints of global recession, leading to slowdown in e-commerce, the warehousing industry in India has continued to grow. In fact, the vacuum created by e-commerce players has been filled by third-party logistics (3PL) providers supported by the warehousing industry. This has helped to sustain the growth of the industry and to sum up,Indian warehousing industry still has the growth appetite for the developers.
How has your organization performed in the last three years?
Apeejay Surrendra Group is a well-diversified group with interests in shipping, hospitality, real estate and retail. Apeejay Surrendra Group has been able to weather the challenging past few years and emerged from the pandemic with improved numbers across all four verticals. This is a testament to the group's resilience and adaptability in the face of adversity. Apeejay’s shipping division has also been performing extremely well, as this is a key industry that plays a critical role in global trade. Real estate led by warehousing has also bolstered the group’s growth and we have been able to claw back to more than 95% occupancy level. Last year we raised a significant Rs 300 crore NCD from BREA Credit for the development of our warehouses. Investors backing us with growth capital is a testament to the strength of our business performance in last 3 years and the confidence that investors have in our growth potential.
Which are the major warehousing projects you have completed in FY2022-23?
We have successfully completed 50% of ground coverage in our NCR warehousing park in Ballabhgarh, Faridabad besides kicking off further development work in our projects at Kalinganagar, Orissa and Haldia, West Bengal. With a successful start for development of almost 1.4 million square feet accomplished last year for each of these Greenfield projects, we are now moving ahead aggressively.
What are the value-added services you provide to your clients? Please do share the sustainability features of your projects
We offer our clients a range of value-added services, including a Build-to-Suit (BTS) options for those who are solely interested in warehousing. This option allows us to construct a shed that meets the client's specific requirements, while ensuring that quality is not compromised during the construction process. In addition, we also have a logistics arm that enables us to handle our clients' products in our warehouse. We offer a range of additional services, including customs bonded warehousing, transportation, and handling of bulk, break bulk, and container cargo. These value-added services, combined with our fully compliant warehouses with clearance from statutory bodies helps us offer our clients with a comprehensive solution to meet their warehousing and logistics needs.
What are the challenges faced by the warehousing sector in India?
The warehousing sector in India is still in the process of development, with many businesses transitioning from traditional godowns to more modern facilities. One of the newer trends in the industry is the shift towards per pallet space rental calculations, as opposed to the traditional per square foot method. There are still some non-compliant and less modern warehousing options available in the market, which may take some time to fade out. However, with more and more corporates entering the warehousing sector, we believe that there will be a significant push towards the adoption of modern warehousing practices and standards. This, in turn, will lead to the development of the sector into a more competitive and innovative industry. As businesses begin to prioritize efficiency, safety, and compliance in their warehousing operations, we anticipate that the demand for modern facilities and services will continue to grow, ultimately leading to a more robust and sophisticated service oriented warehousing sector in India.
Which are the sectors that will drive the growth of the warehousing sector in FY2023-24?
The manufacturing industry is going to be a key driver for the warehousing sector in the current fiscal year. With the implementation of the National Logistics Policy (NLP), we can also expect to see a significant increase in demand for warehousing services from manufacturers, as they look to streamline their supply chain and improve their logistics capabilities.
Which sector will contribute the maximum revenue for your organization in FY2023-24?
We cater to a wide array of industries and sectors ranging from heavy industries requiring storage and movement of materials such as coal, ferrochrome, and project cargo, to white goods, IT, retail, and manufacturing or engineering giants working with 3PL providers. We have solutions that can be tailored to meet the unique requirements of each client. Our new sheds, which are under development, will mostly be taken up by 3PL players and we look at them being the major contributors.
How can the government assist in the growth of the warehousing sector? What are the policy and regulatory tweaks needed?
The government has already done a lot by implementation of GST which has acted as a catalyst for the growth of this sector. We are now looking forward to recognition for this sector as an Industry by all State Governments so that the benefits which the industry players get can be passed on to the warehouse developers. Government must recognise that warehousing and logistics provides the second largest employment in India after agriculture and so by recognising it as an industry and not as a commercial activity it will inspire more corporates and organised players to develop sustainable warehousing with compliance of law and regulatory authorities which will attract more investments in terms of foreign investments and add value to the industrial sector. Also recently, Government of India has come up with National Logistics Policy and implementation of Gati Shakti by integrating 17 ministries under one umbrella. This shows focus of the Government of India on logistics as this is going to reduce costs on the entire logistics activity which in turn will add to GDP only.
Can you please share with us the latest trends and technological developments going on in the warehousing sector in India?
It's true that the development of modern warehousing has brought about an influx of technological advancements, including the use of automatic dock levellers and rolling shutters, insulation, air exchange systems, forklifts, robotics, and RFID tracking. These technologies have revolutionized the industry, allowing for more efficient and streamlined operations, improved inventory management, and increased productivity. To add on this warehouses provides a perfect platform for generation of solar power, which will go a long way to reduce the carbon footprint in the country.
The unabated growth in the warehousing sector has led to increased demand for skilled and efficient manpower. What are the steps you are taking in this regard?
We have taken steps to train our employees and educate them on the benefits of incorporating technology into our warehouse operations. By doing so, we have been able to improve our efficiency levels, which has ultimately led to a reduction in operational costs, benefiting our bottom-line. Our focus on leveraging technology has allowed us to streamline our processes and enhance our overall productivity, enabling us to deliver greater value to our customers.
What are your growth plans for your organization for the next three years?
Our plan is to completely develop the current holding of 237 acres of land for warehousing, and work has already begun towards this goal. Once completed, we will be managing over 5 million square feet of warehouses and we plan to acquire more lands and expand our warehousing division across the country. Our current focus remains on North and East India, where we are in the process of expansion and plan to add an additional 5 million square feet of warehouses. Our unique selling proposition is to provide value-added services in conjunction with 3PL services to our esteemed clients and be one of the top five composite service providers in the country.