Status & Leverage of Logistics Parks in India Logistics Parks – A Catalyst For Growth A. Nagendra

Definition A logistic park is the hub of a specific area where all the activities relating to transport, logistics and goods distribution, both for national and international transit, are carried out on a commercial basis by various activities

Key Differentiating Factors Key factors differentiating a logistics park from ICD, CFS, or warehouses are the VAS such as Cross-docking Customization Stacking Labeling Management reporting Merge – in – Transit Pick and pack Repair or refurbishment Reverse logistics Contract logistics Freight consolidation Packaging Purchase order management Quality control

Essential Requirements Suitable location Rail terminal Air cargo complex Intermediate container terminal Warehousing (temperature controlled and ambient) VAS Food processing zones Open stocking yards Ancillary production

Key Differentiating Factors Economies of scale Scope and co-location Efficiency in transportation Co-location of VAS providers Reduced inventory requirements Single window clearances Greater industrialization Reduced pollution

Market Size & Growth Container trade is witnessing a growth rate of about 14 – 15% Market size for CFS/ICD stood at Rs. 38 billion CFS share estimated to be 70% ICD share estimated to be 30% Increasing level of containerization for erstwhile break-bulk commodities (Steel, cement, rice, sugar) Growth in India’s Containerised Traffic at ports in ‘000 TEUs

Growth Drivers Growth in Exim Traffic India’s merchandise exports registered a growth of 39.6% in FY’11 compared to 3.8% in the previous year Imports in India registered a growth of 35.9% in FY’11 compared to 7.1% in the previous year Increase in Container Traffic at Major Ports During the last 5 years container traffic at Indian ports has increased at a CAGR of 10.06% Majority of the container traffic in India is handled Development of DFC & DMIC along the North West Corridor are expected to drive the demand for container logistic infrastructure Increasing thrust on developing container terminal on the East and the West Cost of India

Growth Drivers Electronics FMCG Textiles and Garments Currently worth $ 32 Billion Largest segment is consumer electronics while the largest export segment is of components FMCG 4th largest sector in the Indian economy valued at Rs. 850 billion Spends about 10 – 12% o f their operating cost on logistics and warehousing With the increase in population the demand for FMCG is bound to increase, fuelling the demand for warehousing and cold storage Textiles and Garments The total market size of Indian textile industry is $52 billion of which exports constitutes $20 billion Logistics, including warehousing, account for around 5% of the total costs of production and distribution MMLP & Mega Food Parks

Issues & Concerns Cumbersome Land Acquisition Process Nomination Premium Issues Low Level of Containerization in India Lack of Skilled Manpower Inadequate IT Initiatives Absence of a Hub Port

Key Players Company / Organization Area in Sqft. Location Investment in Million Rs. Safexpress 200,000 Agra 300 270,000 Mahudanchavadi (Tamil Nadu) 250 Apeejay Infra Logistics 39,20,400 Haldia 2 Billion 13,06,800 Kalinganagar (Orissa) 500 Shree Subham Logistcs 400,000 Jodhpur Indev Group 871,200 Chennai 1.25 Billion

Upcoming Projects Company / Organiation Location Investment in Bilion Rs. Balmer Lawrie & Company Visakhapatnam 1.55 Safexpress Across the country 6 Vision India Real Estate Haldia 2,000 Apeejay Infra Logistics Bangalore & Chennai Bangalore – 60 Million Chennai – 50 Million Anil Group Vadodara 2 Union Government 7.5 Dedicated Freight Corridor Corporation of India Ltd. Delhi - Mumbai Industrial Corridor NA Cochin Port Trust Vallarpadam Future Supply Chain Solutions Ltd. 9 Cities in India Concor Rajasthan, Andra Pradesh, Gujarat

Future Outlook – Existing Hubs Logistics Hubs Features Mumbai Financial capital of the country Two major ports – Mumbai and the JNPT (near Mumbai) handle about 60 per cent of the country’s container traffic. Mumbai is the busiest airport in terms of cargo traffic. The city has one operational electronics and gems and jewellery SEZ. Formal approval has been given to 19 SEZs of which nine are information technology (IT)/ information-technology enabled services (ITes) based, two each for multi services and gems and jewellery7, and one each for an FTWZ, biotechnology, light engineering, pharmaceuticals and multiproducts and port-based multiproducts.

Future Outlook – Existing Hubs Logistics Hubs Features Chennai Chennai and its surrounding areas continue to be the most important industrial centre in the state of Tamil Nadu. Four major national highways link Chennai to Mumbai (via Bangalore), Kolkata, Tiruchirapalli (Trichy) and Tirupati. Chennai Port is the second largest in terms of container traffic The airport is the second busiest cargo terminus in the country. The city has four operational SEZs (three IT / ITeS and one multiproduct). Formal approval has been given to 22 SEZs, of which 16 are IT/ITeS based, and one each of multi services.

Future Outlook – Existing Hubs Logistics Hubs Features Kolkata Major manufacturing hub of West Bengal. The city has four operational SEZs (two IT/ITeS and one each of gems and jewellery and software development). Formal approval has been given to eight SEZs, one is for leather products.

Future Outlook – Emerging Hubs Logistics Hubs Features Gurgaon Gurgaon is the industrial and financial centre of Haryana. Gurgaon has the advantage of being situated on the Golden Quadrilateral with easy access to the DFC giving it a clear advantage of developing a logistics hub. An eight lane expressway runs between Delhi and Gurgaon and connects to NH-8 (Delhi-Jaipur-Mumbai national highway). Indira Gandhi International Airport, Delhi is 15km from the city centre, and the city is well connected to the airport by the Delhi Gurgaon expressway. The city has three IT/ITeS based operational SEZs. Formal approval has been given to 38 SEZs, of which 29 are IT/ITeS based, three each for multi services and biotechnology, and one each for gems and jwellery, engineering and textiles.

Future Outlook – Emerging Hubs Logistics Hubs Features Visakhapatnam Visakhapatnam is one of the major cities on the east coast of India connected by NH-S, a major national highway and a part of the Golden Quadrilateral system of Indian highways connecting Chennai and Kolkata The Visakhapatnam port is one of the busiest ports in India . The shipbuilding yard situated at Visakhapatnam is the largest in India. The Visakhapatnam airport is the busiest airport in coastal Andhra. The city has seven operational SEZs (three IT/ITeS, two pharmaceutical, and a multiproduct and textile). Formal approval has been given to 12 SEZs, of which six are IT/ITeS based, three pharmaceutical, and one multiproduct, textile and aluminum refining each.

Future Outlook – Emerging Hubs Logistics Hubs Features Nagpur Nagpur is located at practically the geographical centre of India. All major highways NH-7 (Varanasi Kanyakumari) and NH-6 (Mumbai-Sambalpur-Kolkata) and major railway trunk routes (Mumbai, Chennai, Howrah and Delhi) pass through the city. Nagpur holds a strategic position in international aviation routes. A multi-modal international cargo hub and airport are being developed at Nagpur. The city has one operational SEZ (multiproduct). Formal approval has been given to four SEZs, one each for IT/ITeS, multiproduct, textile and FTWZ.

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