26-09-2013, 12:37 PM
Construction of modern warehouses
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Project Description
Logistics spending in India is
currently estimated to be around
13% of GDP. The Indian logistics
industry is valued at approximately
Rs. 4,068 billion. The total logistics
cost / spending in India is estimated
at 4.59% of sales and 10% of value
added. Warehousing industry in
India is largely (nearly 50%)
controlled by the unorganised sector.
Warehousing accounts for 20% of
the total domestic logistics industry.
The current warehousing capacity in
India stands at 60-70 million MT.
Project’s Value Proposition
27% of the logistics cost is incurred toward warehousing. However, only 30% of the industry
outsources warehousing function in India, as against 76% globally. Rest of them cater to their
warehousing requirements through their own assets and investments.
At the service provider end, only less than 50% of total service providers in the warehousing
space are organized players. There is approximately 2900 million square feet of warehousing
space in the country. Out of these, more than 80% measure less than 10000 square feet which
signifies that the warehousing sector is still fragmented.
Of the total warehousing space almost 82% is not mechanized. However, those that are
mechanized have just forklifts or hydraulic hand pallet trucks. These numbers clearly indicate that
there is an acute need of organized, large scale, and good quality warehousing and storage
infrastructure in the country.
Moreover rationalization of indirect taxes regime through abolition of CST and introduction of
state level VAT, paves the way for companies opting for centralized warehouses
Size of sector is expected to grow more than USD 120 billion (Rs. 5,400 billion approx.) by 2015.
Though the Government is taking all the measures to revive this sector and develop it, it would
not be possible without private sector participation. Expertise of the private players is required to
boost this sector and to make it more organised.
MP’s value proposition
The state government through MPWLC has introduced a joint venture scheme, wherein the
warehouses are constructed jointly by MPWLC and private party by entering into a joint venture
agreement. Thus there is a good Government support available to boost this sector.
MP produces large quantities of agricultural and industrial produce. The centrally located state is
well connected to entire country through rail, road and air networks, thus making it easily
accessible.
Land is available in MP in abundance at lesser rates than other regions in India. The labour rate
in MP is Rs.135-150 per hour as compared to Rs. 225-250 per hour in metros. There is a larger
pool of qualified manpower available in MP.
Madhya Pradesh has total road length of 91968 km all over the state. There are 16 national
rd
highways passing through the state with total length of 4670 km. MP has the 3 largest network
of highways among all the states in India. The length of state highways in the state is 10249 km.
MP is well connected with the rest of India through railways with almost 425 trains passing
through the State on a daily basis. Itarsi railway station strategically located in the centre of
country.
There are 5 operational airports in MP. Indore airport has the capability of handling international
cargo. An international airport is under construction in Bhopal.