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Supported by its parent Mahindra & Mahindra (M&M), Mahindra Logistics has steadily grown its non-M&M related business to almost 50 per cent of its total turnover from a miniscule 12 per cent in the past. Pirojshaw Sarkari, Chief Executive Officer, Mahindra Logistics, talks to INFRASTRUCTURE TODAY about industry trends in warehousing such as contract manufacturing and e-commerce logistics.
Today, for instance, we operate a 450,000 sq ft warehouse for a leading FMCG company in Vapi, Gujarat, from where we are distributing not only to Gujarat but also to Maharashtra, post the rollout of the Goods and Services Tax (GST). Technology has enabled us to bring a difference to a company like Hindusthan Unilever, who was dealing with small-time clearing and forwarding (C&F) agents or transporters prior to GST. A C&F agent can run a good arm for you, but he cannot run a 450,000 sq ft facility because the accuracy that we can deliver cannot be achieved without good technology in the warehouse.
These were typically the models before GST. But, post GST, we started taking positions in warehouses even before a customer gives us his warehousing requirements.
For instance, we took a 200,000 sq ft warehouse in Gurgaon. We then went out and started marketing it. This is becsuse, post GST, we strongly believe large format warehouse consolidations are going to take place. While bigger customers want their own warehouses, smaller customers want those locations, but cannot always afford large warehouses of their own. Therefore, we give readymade spaces that we take in advance.
We have done two so far, one in Gurgaon and a 300,000 sq ft warehouse in Chakan near Pune, which is a part of the auto belt. In Gurgaon, we have five customers and the warehouse is full. We have three customers in Chakan and this is also full.
While Gurgaon was taken six or eight months ago, we are yet to start operations in Chakan, and it is already full! As I said, this whole auto belt is looking for warehousing. Our Chakan facility was taken from Embassy Towers, while our Gurgaon facility was from a local developer.