Nirav Kothary Head, Industrial Services, India Status & Leverage of Logistics Parks in India.

Nirav Kothary

Head, Industrial Services, India

Status & Leverage of Logistics Parks in India.

© 2011 Jones Lang LaSalle. All rights reserved.

Jones Lang LaSalle Brief

Industrial & Logistic Services, India

Logistic Parks – Current Scenario

Challenges and Way Ahead

Logistics – Where are we placed?

Presentation Structure

Your Point of Contact

Case Study China


Logistics – Where are we placed?


60 Year’s CAGR for Population = 2.0%

59Year’s CAGR for GDP at Factor Cost and Constant Price = 5.2 %

Indian GDP and Population Growth

Note: GDP at factor cost at constant prices relates to 1999-2000 prices upto 2000-01. From 2006-07 onwards, data are based on new series (2004-05) prices.

Source: Economic Survey of India, 2010 -11 and Census of India

* GDP figures relate to 2009-10

Indian GDP and Population Growth

0.360.44

0.55

0.68

0.85

1.03

1.21

44.9

18.6

10.86.44.7

3.32.2

-

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1951 1961 1971 1981 1991 2001 2011

Popu

latio

n (B

illio

n)

-

10.0

20.0

30.0

40.0

50.0

60.0

GD

P at

Fac

tor C

ost (

INR

Tril

lion)

Population (Bn) GDP at Factor Cost (INR Trillion)

*India has the size and its growing fast

India - Huge Market Size


India - Strong Industrial Growth

Strong Industrial production

Is India’s Logistic

Scenario ready to absorb it?

Healthy Industrial Production growth among Top 10 performing countriesIndustrial Production Growh Rate, 2010

6.10%5.30%

15.70%16.60%

10.80%

8.20%

2.10%

10.50%

5.10%

9.70%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

EU

US

A

China

Japan

India

Germ

any

Russia

UK

Brazil

France

Indu

stri

al P

rodu

ctio

n G

row

th R

ate

(%)

Source: CIA World Factbook, 2010


Indian Logistics – Only in transforming state – Long way to go

0.0

1.0

2.0

3.0

4.0

5.0Customs

Infrastructure

Internationalshipments

Logistics competenceTracking & tracing

Domesticlogistics costs

Timeliness Singapore

China

India

Brazil

RussianFederation

30

39

1

61

99

LPI Rank

Figure 2: Logistics Performance Index of BRIC Nations

Source: World Bank Survey "Connecting to Compete", 2007

Countries

“India is 39th in Logistics Performance Index (LPI) in world.”Logistic Performance Index of BRIC Nations

Still a long way to go…..


Drivers of Warehousing Industry

• 5th largest consumer Market in the world by 2025 (McKinsey)

• Retail market to grow to US$ 420Bn by 2025 (McKinsey)

• 18.5% of India’s GDP

• Agri exports grew by 25% in 08-09, expected to be US$ 18 Bn by 2014-15 (APEDA)

• Top 12 producers of manufacturing value added (MVA)

• Investment prospect of US$ 180 Bn. in 5 yrs. (Investment Commission)

• Containerized traffic to grow by average rate of 18% annually over the next decade (SCI)

• Govt. Investment target of US$ 20.38 Bn over the next 2 yrs. in the infrastructure sector. (Planning Commission)

• Expected phase out of Central Sales tax and implementation of Goods and Services Tax (GST)

• Free Trade Warehousing Zones


Logistic Parks – Current Scenario


Warehousing Hubs in India

Source: Jones Lang LaSalle

Secondary Hubs

Surat

Goa

Chandigarh

Pune

Vadodara

Vizag

Kochi

Coimbatore

Nagpur

Trivandrum

Jaipur

Nashik

Mangalore

Indore

Ludhiana

Tertiary Hubs

Vijayawada

Jalandhar

Mysore

Bhopal

Amritsar

Patna

Lucknow

Kanpur

Agra

Bhubaneshwar

Jodhpur

Guwahati

Allahabad

Varanasi

Meerut

Primary Hubs

NCR-Delhi

Mumbai

Chennai

Kolkata

Bangalore

Hyderabad

Ahmedabad


Logistic Parks in India

NCR Mumbai Chennai Bangalore Kolkata Hyderabad Pune

Avg. Land Cost1 5 -22 6 – 32 5 -16 8 - 22 12 - 29 5 - 23 6 – 20

Avg. Rents2 10 - 18 9 - 23 12 - 16 9 - 14 14 - 21 7 -14 9 - 19

Major Warehousing Locations

Palwal Bhiwandi Sriperumbudur Tumkur rd. Dhulagarh Kompally Chakan

Jamalpur Panvel Irungatukottai Haskote Ankurhati Gundlapochampally Talegaon

Bhorah Kalan Taloja Oragadam Mysore Rd. Hide Rd. Medchal Wagholi

Lohari Rasayani Maraimalainagar Devanahalli Kona Patancheru Shirval

Dharuhera Patalganga Madavaram Hasur Rd. Dankuni Shamshabad

Major Logistic Parks in India

Source: Jones Lang LaSalle; Note: [1] = Avg. Land Cost in INR Million / acres & [2] = Avg. Rents are in INR / sft / month

Major demand generators for warehousing

Source: Jones Lang LaSalle


Case Study China


Case Study China

• Beijing and Tianjin - An Integrated Economy

and Logistics Market

• Dalian and Qingdao - Regional Shipping

Centres

• Cities in Greater Yangtze River Delta- Support Shanghai

• Pearl River Delta - More Ports Along the

Coastal Line - Enhanced Connection

with Hong Kong

• Chengdu and Chongqing - Service West China

Logistic Hotspots in China


Case Study China

Shanghai – China

Focus Shanghai: Major Logistic Parks


Case Study China

Changing WH Usage International Operator Presence

• Deregulation and sophistication

• International operators increase efficiencies

• Growing FDI also globalizes the logistic market

Less

ons

Lear

nt


Challenges and Way Ahead


Critical Challenges Faced by Warehousing Industry in IndiaAvailability of affordable land at desired locations

• Non – transparent and unorganized warehouse real estate market. Unclear title and approvals hassles• Land values attaining peaks in the past 3 – 5 years, the availability of affordable land is a concern.

Integration of various modes of logistics• Key challenge is to integrate all these modes (road, rail, air & sea) to ensure efficient delivery though cost effective means. • Exploring the opportunity of multimodal transport system integrating different geographical scales from the global to the local.

Taxation & regulatory policies• Government’s role to promote organized warehousing with clear cut rules and regulations • The expected phase-out of Central Sales Tax and implementation of Goods and Services Tax (GST)

Standardization of warehouse specifications across geographies

• Lack of standards - Quality and flexibility of available warehousing space is a major concern. •There is a dearth of quality temperature controlled storage spaces across the region,

Infrastructure

•The widening gap between the growth of infrastructure sector and that of organized warehousing • While significant outlay has been done at a macro-level, infrastructure at the warehouse level also needs focus.

Trained and professional manpower

• Skilled work force to manage warehouses of tomorrow will mitigate risks of high inventory levels and poor service offerings


Optimization of Cost

Source: CII Institute of Logistics, India.

Elements of Logistic Cost in India

Inventories, 25%

Transportation, 35%

Losses, 14%

Packaging, 11%

Customer Shopping, 6%

Handling & Warehousing, 9%

Minimizing Losses

Effective Planning of WH positioning

Reducing transportation cost

Effective inventory management

•Efficient storage facilities - warehouses•Unbroken Cold chain

• Locating warehouse in optimal locations keeping in mind both supply and distribution networks.

• Efficient transportation fleet• Shifting to cost efficient transportation mode

• Extensive use of RFID Tagging• Professional Management of inventory

Optimization might be achieved by:


Jones Lang LaSalle Brief


Key Statistics

2011 Revenue$3.6B

Sq ft under management

1.8 Billion

Employees42,000+

Licensed Brokers2,600

Research staff300+

Locations1,000

70 offices535 cities

14 countries

Americas

60 offices126 cities31 countries

EMEA

77 offices156 cities13 countries

Asia Pacific

Locally focused, Regionally co-ordinated, Globally aligned


•Largest geographical footprint – 14 offices in 11 cities

•A growing base of employees, currently over 4,000

•Two out of five professionals in the organised Indian real estate sector work for Jones Lang LaSalle

•Perfect combination of global best practices and local, grass-root level insights

•An expanded presence in growing Tier II and Tier III cities

Tier 1 Cities

Tier 2 Cities

CHANDIGARH

DELHI

KOLKATA

MUMBAIPUNE

HYDERABAD

CHENNAIBANGALORE

COIMBATORE

KOCHI

AHMEDABAD

Delhi, Mumbai, Hyderabad, Bangalore, Chennai

Chandigarh, Ahmedabad, Pune, Kolkata, Kochi, Coimbatore

Tier 3 and Other Cities – Foothold in 90 + cities

AllahabadAgraAmritsarAnandAurangabadBarodaBhavnagarBhilaiBhubaneshwar

DurgaurGoaGorakhpurGuwahatiGwaliorHawraHubliIndoreJabalpur

JodhpurKalyanKanpurKharagpurKolhapurLucknowLudhianaMangaloreMeerut

MehsanaMoradabadMysore NashikNandedPanipatRaipurRajkotSiliguri

SuratThaneThiruvananthapuramUjjainVapiVizagVijaywada

Jones Lang LaSalle, India


World’s Most Ethical Companies

(for four years in a row)

Ethics Inside Certification

Rigid Code of EthicsRigid Code of Ethics

Account ManagementAccount Management

Research SuiteResearch Suite

• Single point of contact

• Empowered account managers

• Ensures consistent delivery

What keeps us ahead of the Curve ?


Industrial & Logistic Services, India


Americas

US: 169 Canada: 9Mexico: 11Brazil: 3

196 industrial professionals

Australia: 74China: 60Hong Kong: 5India: 14Indonesia: 1Japan: 2Korea: 1New Zealand: 10

Asia PacificEMEA

Belgium: 6CEE: 8France: 11Germany: 28Holland: 13

132 industrial professionals 181 industrial professionals

# Industrial transactions: 1,146

Total $ consideration: $3.7 billion

Total s.f.: 76 million

Italy: 4Russia: 9Spain: 20UK: 33

Philippines: 2Singapore: 4Taiwan: 2Thailand: 4Vietnam: 2Malaysia: 2Asia Regional: 2

2010 2010

# Industrial transactions: 900



2010

# Industrial transactions: 850



Panama: 1Argentina: 2Chile: 1

Jones Lang LaSalle – Global Industrial & Logistic Footprint


24

100+ Transactions

12+ Mn.

Sft. transacted

14Team Members

40+Consulting

7City Presence

Industrial tenant representation

Industrial property marketing

Supply chain & Logistics Solutions

Industrial asset disposition

Project Development Services

Energy and sustainability

Site selection/incentives

Industrial Valuation

Port, airport & multi modal services

Our Service Offerings:

Business Location Consulting

Industrial & Logistic Service Offerings & Footprint in India


“I would like to commend JLL’s performance in managing our Chakan MIDC transaction to a successful outcome. JLL managed the purchase process from concept through to negotiation and completion in a very efficient and professional manner. This delivered a result by the team which met our expected timeframe and targeted purchase value and savings.”

Ruairi McCaffertyManager of Real Estate Europe, Middle East & Africa

Federal-Mogul Corporation

“JLL has found a very good location and followed up very diligently on all the items, with the landowners and was very professional & competent in the managing of the real estate aspects.”

Peter AllenLubricants LSC Business Development Manager

Shell

“Jones Lang LaSalle had worked with us for a few months on the relocation & expansion project of our plant at Bangalore. JLL gave us valuable inputs with their excellent market knowledge and technical expertise in this assignment. They were professional in their approach and efficient. I thank JLL for their close collaboration and support on this important project.”

David StanleyManaging Director & CEO

AMC India

Built to Suit Acquisition / DispositionConsulting

Select Clientele and Testimonial



Nirav KotharySr. Vice President Head – Industrial Services, India

E-Mail: [email protected]

Hand phone: +91-97277 58027



Thank You

Nirav Kothary Head, Industrial Services, India Status & Leverage of Logistics Parks in India.

Documents

Transcript of Nirav Kothary Head, Industrial Services, India Status & Leverage of Logistics Parks in India.