Post Date : May 13, 2019
DB Schenker, a European logistics giant has plans to increase its warehousing space in India to 7 million square feet in three years. The company sees a surge in demand for better facilities from corporate post GST implementation, a company official said.
The company has a vision to grow at 20 percent faster pace through its top line in logistics business comprising of contract logistics and surface cargo activities for corporate.
“We are at 4 million square feet of space under management and will take it to 7 million square feet in three years,” said DB Schenker’ country chief executive Vishal Sharma. From an investment’s perspective, it will not be a large tab as much of this space will be owned by other developers and will be contracted on a longer-term basis, he said.
It can be noted that in the last few months, there have been a slew of announcements by realty developers about creating warehousing space. Sharma expressed happiness about getting the necessary space as required. He said, the next three years will see a doubling up of space per centre to 1.50 lakh square ft as the warehousing activities have become more concentrated aided by GST.
“In the pre-GST era, it was necessary to have warehousing at multiple locations. The same is now shifting to hubs,” he said. Nearly, half of the company’s revenue comes from the air logistics business where it has contracts with airliners to fly cargo to destinations. It had to go for business continuity plans in the wake of the grounding of Jet Airways, Sharma said.
The company will have about 25 warehouses, with 10-12 of them being bigger warehouses, he said, adding that the NCR, West and southern market comprising the Bengaluru-Chennai belt are the clusters which will see a bulk of development of this space. The company had posted a revenue of above Rs 1,400 crore in 2017-18 and, has been growing at an average of 18 percent in the last three years, he said.
He said it is not looking at any particular asset in India from mergers and acquisitions (M&A) perspective, even though as a group it is not averse to such an idea. It is expanding its trucking business in the country which is again done as an asset-light model by having tie-ups with trucking companies.
The company is impressed with the last mile delivery companies in the country and will be crystallising its terms of engagement with such innovative start-ups by the end of the year, he said.