Foreign companies are rushing to exploit India’s warehousing sector

Foreign companies are heading to India to tap into the growing warehousing sector as the boom in e-commerce, the China+1 strategy of multinational companies, coupled with a push in the FMCG, food, clothing and pharmaceuticals, lead to high demand for stocking goods.

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

FM Logistic, the €1.4 billion French third-party logistics (3PL) company, has inaugurated its first multi-client facility (MCF) in India owned at Farrukhnagar in Haryana. Located on a 31-acre site approximately 70 km from Delhi, the facility will provide warehousing and handling, co-packing, distribution, e-commerce and omnichannel services to meet customer demands in India and overseas. the stranger.

Alexandre-Amine Soufiani, Managing Director of FM Logistic India, recently said Activity area that it has about 70 lakh square feet of space in India and plans to expand it to 1.2 crore square feet. by 2026, as the demand for 3PL logistics services is expected to grow. “We are in the golden age and we have come at the right time in India,” he said.

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

Vivek Arya, Managing Director, Rhenus Logistics India, “The country’s industrial economy is changing. Expansion of Rhenus’ warehousing facilities in India to 2.4 million square feet. follows a period of sustained growth for the company. We aim to reach approximately 5 million square feet over the next three years.

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

The pandemic, a catalyst

Sandeep Chanda, Managing Director India, Panattoni, said India’s warehousing sector in India has seen significant growth with the pandemic being a major catalyst. The consumer shift towards contactless transactions and fast home deliveries has given the e-commerce sector a huge boost. Several retailers and e-commerce players are looking to expand their warehousing space, fueling the demand for new and modern logistics areas.

India’s quest to become a global manufacturing hub, fueled by the popularity of the “China+1” strategy, is expected to propel the growth of India’s industrial and warehousing space. Along with this, the e-commerce boom, increasing investor interest due to favorable market dynamics and government initiatives such as “Make in India”, GST implementation and status compliance infrastructure to the sector, have all converged to create a long-term structure. Term history for India.

Space required

According to market research firm ‘Research and Markets’, in the financial year 2020, the warehousing market was valued at ₹1.05 trillion. In terms of space required, it amounted to 265 million square feet. in FY21. Total revenue is expected to reach ₹2,243.79 billion in 2026, growing at a CAGR of 10.90%.

The space required is expected to reach 483 million square feet. in 2026, with a CAGR of 12.77%, he said.

On why the warehousing sector attracts foreign companies, Devi Shankar, President, Industrial & Logistics and Data Centers, ANAROCK Capital, attributed it to the growing need for quality industrial and warehousing space by e-commerce players and manufacturing companies. There is cash waiting to be deployed and looking for the right opportunities.

Various other policy measures taken in the past such as state of logistics industry infrastructure, draft logistics policy – ​​which is in the final stages of finalization – give positive outlook for the growth of this sector in India .

Acquiring the right piece of land with a strategic location conducive to e-commerce and manufacturing will be a key differentiator for businesses, she said.

Published on

August 28, 2022

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