Forbes & Company Limited Status & Leverage of Logistics Parks in India Logistics Parks – A...

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Status & Leverage of Logistics Parks in India

Logistics Parks – A Catalyst For Growth

A. Nagendra

Forbes & Company Limited 2

Definition

A logistic park is the hub of a specific area where all the activities relating to transport, logistics and goods

distribution, both for national and international transit, are carried out on a commercial basis by various activities


Key Differentiating Factors

Key factors differentiating a logistics park from ICD, CFS, or warehouses are the VAS such as

Cross-docking

Customization

Stacking

Labeling

Management reporting

Merge – in – Transit

Pick and pack

Repair or refurbishment

Reverse logistics

Contract logistics

Freight consolidation

Packaging

Purchase order management

Quality control


Essential RequirementsSuitable location

Rail terminal

Air cargo complex

Intermediate container terminal

Warehousing (temperature controlled and ambient)

VAS

Food processing zones

Open stocking yards

Ancillary production


Key Differentiating Factors

Economies of scale

Scope and co-location

Efficiency in transportation

Co-location of VAS providers

Reduced inventory requirements

Single window clearances

Greater industrialization

Reduced pollution


Market Size & Growth

Container trade is witnessing a growth rate of about 14 – 15%

Market size for CFS/ICD stood at Rs. 38 billion CFS share estimated to be 70%

ICD share estimated to be 30%

Increasing level of containerization for erstwhile break-bulk commodities (Steel, cement, rice, sugar)

Growth in India’s Containerised Traffic at ports in ‘000 TEUs


Growth Drivers

Growth in Exim TrafficIndia’s merchandise exports registered a growth of 39.6% in FY’11 compared to 3.8% in the previous year

Imports in India registered a growth of 35.9% in FY’11 compared to 7.1% in the previous year

Increase in Container Traffic at Major PortsDuring the last 5 years container traffic at Indian ports has increased at a CAGR of 10.06%

Majority of the container traffic in India is handled

Development of DFC & DMIC along the North West Corridor are expected to drive the demand for container logistic infrastructure

Increasing thrust on developing container terminal on the East and the West Cost of India


Growth Drivers

ElectronicsCurrently worth $ 32 Billion

Largest segment is consumer electronics while the largest export segment is of components

FMCG4th largest sector in the Indian economy valued at Rs. 850 billion

Spends about 10 – 12% o f their operating cost on logistics and warehousing

With the increase in population the demand for FMCG is bound to increase, fuelling the demand for warehousing and cold storage

Textiles and GarmentsThe total market size of Indian textile industry is $52 billion of which exports constitutes $20 billion

Logistics, including warehousing, account for around 5% of the total costs of production and distribution

MMLP & Mega Food Parks


Issues & Concerns

Cumbersome Land Acquisition Process

Nomination Premium Issues

Low Level of Containerization in India

Lack of Skilled Manpower

Inadequate IT Initiatives

Absence of a Hub Port


Key Players

Company / Organization

Area in Sqft. Location Investment in Million Rs.

Safexpress 200,000 Agra 300

Safexpress 270,000 Mahudanchavadi (Tamil Nadu)

250

Apeejay Infra Logistics 39,20,400 Haldia 2 Billion

Apeejay Infra Logistics 13,06,800 Kalinganagar(Orissa)

500

Shree Subham Logistcs 400,000 Jodhpur

Indev Group 871,200 Chennai 1.25 Billion


Upcoming Projects

Company / Organiation Location Investment in Bilion Rs.

Balmer Lawrie & Company Visakhapatnam 1.55

Safexpress Across the country 6

Vision India Real Estate Haldia 2,000

Apeejay Infra Logistics Bangalore & Chennai Bangalore – 60 MillionChennai – 50 Million

Anil Group Vadodara 2

Union Government Across the country 7.5

Dedicated Freight Corridor Corporation of India Ltd.

Delhi - Mumbai Industrial Corridor

NA

Cochin Port Trust Vallarpadam NA

Future Supply Chain Solutions Ltd.

9 Cities in India NA

Concor Rajasthan, Andra Pradesh, Gujarat

NA


Future Outlook – Existing Hubs

Logistics Hubs Features

Mumbai Financial capital of the country

Two major ports – Mumbai and the JNPT (near Mumbai)

handle about 60 per cent of the country’s container traffic.

Mumbai is the busiest airport in terms of cargo traffic.

The city has one operational electronics and gems and

jewellery SEZ. Formal approval has been given to 19 SEZs of

which nine are information technology (IT)/ information-

technology enabled services (ITes) based, two each for multi

services and gems and jewellery7, and one each for an FTWZ,

biotechnology, light engineering, pharmaceuticals and

multiproducts and port-based multiproducts.




Chennai Chennai and its surrounding areas continue to be the most

important industrial centre in the state of Tamil Nadu.

Four major national highways link Chennai to Mumbai (via

Bangalore), Kolkata, Tiruchirapalli (Trichy) and Tirupati.

Chennai Port is the second largest in terms of container traffic

The airport is the second busiest cargo terminus in the

country.

The city has four operational SEZs (three IT / ITeS and one

multiproduct). Formal approval has been given to 22 SEZs, of

which 16 are IT/ITeS based, and one each of multi services.




Kolkata Major manufacturing hub of West Bengal.

The city has four operational SEZs (two IT/ITeS and one each

of gems and jewellery and software development). Formal

approval has been given to eight SEZs, one is for leather

products.


Future Outlook – Emerging Hubs


Gurgaon Gurgaon is the industrial and financial centre of Haryana.

Gurgaon has the advantage of being situated on the Golden

Quadrilateral with easy access to the DFC giving it a clear

advantage of developing a logistics hub. An eight lane

expressway runs between Delhi and Gurgaon and connects

to NH-8 (Delhi-Jaipur-Mumbai national highway).

Indira Gandhi International Airport, Delhi is 15km from the

city centre, and the city is well connected to the airport by

the Delhi Gurgaon expressway.

The city has three IT/ITeS based operational SEZs. Formal

approval has been given to 38 SEZs, of which 29 are IT/ITeS

based, three each for multi services and biotechnology, and

one each for gems and jwellery, engineering and textiles.




Visakhapatnam Visakhapatnam is one of the major cities on the east coast of

India connected by NH-S, a major national highway and a

part of the Golden Quadrilateral system of Indian highways

connecting Chennai and Kolkata

The Visakhapatnam port is one of the busiest ports in India .

The shipbuilding yard situated at Visakhapatnam is the

largest in India.

The Visakhapatnam airport is the busiest airport in coastal

Andhra.

The city has seven operational SEZs (three IT/ITeS, two

pharmaceutical, and a multiproduct and textile). Formal

approval has been given to 12 SEZs, of which six are IT/ITeS

based, three pharmaceutical, and one multiproduct, textile

and aluminum refining each.



Logistics

Hubs

Features

Nagpur Nagpur is located at practically the geographical centre of India.

All major highways NH-7 (Varanasi Kanyakumari) and NH-6

(Mumbai-Sambalpur-Kolkata) and major railway trunk routes

(Mumbai, Chennai, Howrah and Delhi) pass through the city.

Nagpur holds a strategic position in international aviation routes.

A multi-modal international cargo hub and airport are being

developed at Nagpur.

The city has one operational SEZ (multiproduct). Formal

approval has been given to four SEZs, one each for IT/ITeS,

multiproduct, textile and FTWZ.

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