Foreign companies are taking a direct line to tap into the warehousing sector in India

Foreign companies are taking a beeline to India to take advantage of the fast-growing warehousing sector with the e-commerce boom, as the China+1 strategy for multinational corporations, along with a boom in the FMCG, food, apparel and pharmaceutical sectors, is driving up demand for warehousing.

Since April, three major multinationals – FM Logistic, Rhenus and Panattoni – have announced major plans in India.

FM Logistic, the €1.4 billion French offshore logistics (3PL) company, has opened India’s first multi-client owned facility (MCF) at Farrukhnagar in Haryana. Located on an area of ​​31 acres about 70 kilometers from Delhi, the facility will provide warehousing, handling, co-packing, distribution, e-commerce and multi-channel services to meet the requirements of clients in India and abroad.

Alexander Amin Sfyani, General Manager of FM Logistic India, recently told business line It has an area of ​​about 70,000 square feet in India and plans to expand it to 1.2 crore square feet. By 2026 the demand for 3PL logistics is set to expand. “We are in the golden age and we came just in time to India,” he said.

The German Rhenus Group recently expanded its storage in India by launching two new multi-user chemical warehouses in Jamalpur (Gurugram) and Bhiwandi (Mumbai).

Vivek Arya, Managing Director of Rhenus Logistics India, “The country’s industrial economy is undergoing an evolution. Expansion of Rhenus warehousing facilities in India to reach 2.4 million square feet. After a period of continuous growth for the company. We aim to reach around 5 million square feet in the three years coming.”

The latest entrant is US-based Panattoni, which plans to invest $200 million in India, to develop four industrial and logistics parks across major cities where it sees huge growth potential amidst the increasing demand for warehouses.

pandemic, catalyst

Sandeep Chanda, Managing Director of India, Banatuni, said the Indian warehousing sector in India is experiencing broad growth, with the pandemic being a major catalyst. Consumers’ shift towards contactless operations and express delivery at the door has boosted the e-commerce sector significantly. Many retailers and e-commerce players are seeking to expand their storage space, thus increasing the demand for new and modern logistics areas.

India’s quest to become a global manufacturing hub, buoyed by the popularity of the “China+1” strategy, is expected to drive the growth of India’s industrial and warehousing space. Besides, the e-commerce boom, increased investor interest due to favorable market dynamics and government initiatives such as “Make in India”, implementation of Goods and Services Tax (GST) and alignment with the development of sector infrastructure, have combined to create a long-running story-line structure for India.

Space requirements

According to the market research company “Research and Markets”, in the fiscal year 2020, the value of the storage market amounted to 1050 billion Russian rubles. In terms of space required, it has amounted to 265 million square feet. In fiscal year 21. Total revenue is expected to reach $2,243.79 billion in 2026, expanding at a compound annual growth rate of 10.90 percent.

Space requirements are expected to reach 483 million square feet. He said the growth in 2026 is at a compound annual growth rate of 12.77 percent.

On the reasons why the warehousing sector is attracting foreign companies, Devi Shankar, President of Industry, Logistics and Data Centers, ANAROCK Capital, attributed this to the growing need for high-quality industrial and warehousing spaces by e-commerce and manufacturing firms. There is liquidity waiting to be published and looking for suitable opportunities.

Several other policy measures in the past such as the state of logistics industry infrastructure, and the draft logistics policy – which is in the final stages of completion – give a positive outlook for the growth of this sector in India.

She said that having the right plot of land with a strategic location suitable for e-commerce and manufacturing will be a major distinguishing factor for the companies.

Posted in

August 28, 2022

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