1. Madhya Pradesh: Means Business
Logistics Industry

2. Overview Overview Madhya Pradesh (MP) – State that means business
MP is the second largest State in the Country stretching over 308,000 sq kms.
The State is blessed with large mineral resources of coal, diamond, limestone, methane etc.
MP is among the top 4 states of the Country for industrial investments.
Economic Snapshot
Madhya Pradesh is emerging as a key growth center for the Country
Per capita GSDP USD 369**
Manufacturing sector USD 8.5 bn**
(Registered & Unregistered)
Gross state domestic product (GSDP) USD 23, Mn**
Average growth rate % per annum
Advantage MP
Madhya Pradesh has one of the upcoming industrial base in India
The State is centrally located
Investor friendly Government policies
Total electricity generation capacity , MW*
India’s first greenfield SEZ Indore SEZ
Industrial Centers
Power
Electricity generation capacity at present is 6, MW and estimated to rise to a surplus in
MP is rich in low grade coal suitable for power generation.
Potential of hydro-energy generation.
Installed power capacity (MP’s share)
Hydel Power Generation: MW*
Thermal Power Generation: 2,147.5 MW*
*Ministry of Power (powermin.nic.in)
**Source: Indiastat.com (as on 23 Feb 2006)

3. Enabling Infrastructure
The State is well connected with the rest of India with almost 425 trains passing through the State on a daily basis. Of these 175 trains pass through the State capital Bhopal alone.
MP IS CENTRALLY LOCATED AND WELL CONNECTED WITH ALL MAJOR CITIES IN INDIA
RAILWAY NETWORK
25 airstrips.**
Convenient air links from key Indian cities like Delhi & Mumbai to Bhopal, Jabalpur, Gwalior, Indore and Khajuraho.
5 operational airports.
Indore airport has the capability of handling international cargo.
An international airport proposed in Bhopal.
GWALIOR
AIRPORTS
KHAJURAHO
INDORE
BHOPAL
JABALPUR
The total length of roads spanning MP is 67,600 kms.**
National highways of 5,200 kms run through the State.*
18 National highways including trunk routes of Delhi-Mumbai, Delhi-Chennai, Delhi-Bangalore, Delhi- Hyderabad.
The total length of State highways in the State is 9,885 kms.**
Convenient linkages to western ports i.e. Kandla Port, Jawahar Nehru Port Trust.
ROAD NETWORK
*Source: Department of Road Transport & Shipping (morth.nic.in)
**Source:

4. Madhya Pradesh: A Preferred Investment Destination
31% of the State under forest cover with a largely unexploited species of rare, valuable medicinal- herbal plants
Over 2,000 kms of roads being developed with Private Partnership (BOT)
India’s 1st operational Greenfield SEZ at Indore
Offers diverse tourists destinations catering to various segments of tourism such as religious (Bhojpur), eco/ adventure (Panchmari), heritage (Sanchi, Khajuraho) tourism etc.
Over 100 agricultural farms with an area of over 20,000 acres is available on lease to investor
Third largest producer of cement in India*
Favourable climatic conditions for cotton and over 40,000 power-looms are driving the textile industry
Various blocks available for power, cement, iron and steel units
Largest producer of pulses and oilseeds in the Country (~75% of soyabean production)
Over 18,000 technical graduates and 230,000 graduates add to workforce each year
Availability of coal and natural gas (G.A.I.L pipeline) along with support from Government to make investment in Thermal Power Plants lucrative
Over 144 BCM of coal bed methane reserves available
12 blocks with reserves totalling 2,585 million tons of coal has been identified
*Source: & Brochure: MP Means Business

5. MP: The Right Place with the Right Environment
Savings in Office Space Rates
(A comparison of rates in Central Business Districts)
DESTINATION MADHYA PRADESH
Fastest mover* in overall performance among the big States in the Country.
(780 Kms)
Mumbai
(MPV )
(800 Kms)
Pune
(MPV )
(1400 Kms)
Bangalore
(MPV )
(1430 Kms)
Chennai
(MPV )
Hyderabad
(840 Kms)
(MPV )
Delhi
(740 Kms)
(MPV )
Ahmedabad
(570 Kms)
(MPV )
(1350 Kms)
Kolkata
(MPV )
Key Markets
(Distance From Bhopal)
MPV – Market Potential Value
Fastest mover in agriculture
Fastest mover in infrastructure development.
Bhopal and Indore have substantial cost advantages, even when compared to other Tier III and IV cities.
Savings in Land Cost
Ranks 2nd in terms of governance.
(Estimated Values for Multi-product SEZs)
Ranks 3rd in terms of law & order
Cost of skilled labour is USD 2.4/day vis-a-vis USD 3.5 – USD 4.0/day in metros
The cost of land is one of the lowest in the Country. Even central hubs such as Indore and Bhopal fare well against other cities in terms of low land cost.
MP is centrally located. The State is at an easy distance from all the key consumer markets in the Country.
* Fastest mover is the State where the rate of improvement between 2003 & 2006 was greater than that between 1991 & 2003
**Source: India Today (September ‘06 Issue)
Source: (Reference: RK Swamy)
- Distances rounded off

6. SPECIALIZED INFRASTRUCTURE
Industrial Policy: Catalyst for the Investments
The Government of MP has devised an investor friendly industrial policy, which is aimed at achieving global competitiveness. The policy emphasizes on industrial growth in the state through adopting cluster approach, establishing specialized infrastructure and offering favourable incentives.
The main thrust of this policy is:
Establishment of a Madhya Pradesh Trade and Investment Facilitation Corporation which would take decisions about rationalization of taxes, facilities of mega projects and other related matters.
Enacting an Industrial Facilitation Act and to change the rules of business with a view to make single window system decisive and result oriented.
Developing infrastructure for supporting the identified industrial clusters
Reviving closed down/ sick industrial units by granting special packages.
Attractive incentive schemes.
SPECIAL INCENTIVES
Special package for Mega Projects on project basis by apex level investment promotion empowered committee headed by the Chief Minister.
Industrial investment promotion assistance – 50% to 75% of commercial tax for 3-10 years
Concessional registration charges and stamp duty exemption for Term Loans.
Interest subsidy on term loan for 5 – 3% to 5%.
For thrust sector industries, 25% capital subsidy would be provided limiting up to a maximum of USD 56,000
Land on 75% concessive rate for Mega Projects limited to USD 4.4 million.
Entry tax exemption for 5 years.
5 years electricity duty exemption on captive power generation
15% capital subsidy to SSI up to USD 33,000 in backward areas
Infrastructure grant up to USD 0.22 million crore for developing private sector industrial parks
Partial reimbursement for Project report, ISO Certification, Patent and Technology Purchase cost
CLUSTER APPROACH
Indore – Pharmaceutical, Textile, Food Processing, IT, Auto Components
Bhopal – Engineering, Biotechnology, Herbal, IT, Food Processing
Jabalpur – Garment, Mineral, Forest & Herbal, Food Processing
Gwalior – Electronics, IT, FMCG, Engineering, Food Processing
Rewa – Refractories, Lime Stone, Forest Based
Sagar – Mineral Processing
Crystal IT Park
Indore
Food Parks
Mandsaur, Khargone, Chhindwara, Hoshagabad, Mandla and Bhind
Stone Park
Katni
Herbal Park
Rewa
Granite Park
Chhatarpur
Life Sciences Project
Bhopal
Apparel Park
Indore (SEZ)
Gems & Jewellery Park
SPECIALIZED INFRASTRUCTURE

7. Total units established
Doing Business Made Easy Through MPAKVN
In a bid to build a competitive environment; industries and their ancillaries would be promoted in clusters based on the availability of raw materials, skilled labour and market potential. Under this Industrial Policy through Madhya Pradesh Audyogik Kendra Vikas Nigam Ltd (MPAKVNs) scheme, the State Government, has identified industrial clusters. Many of the industrial giants have their establishments in these areas, however 44% of developed area is still untapped and open for investment.
Area Developed: 1,330 Hectares
Allotted: 618 Hectares
Units established: 286
Major Groups:HEG, Crompton Greaves, P&G, Godrej, Lupin, IFB, Oswal, Nahar
Special Infrastructure: ICD, Food Park
Area Developed: 2,262 Hectares
Allotted: 800 Hectares
Units established: 326
Major Groups: JK, Surya Roshini, Godrej, Grasim, Cadbury, Hotline, Crompton Greaves
Special Infrastructure: ICD, Food Park
Area Developed: 790 Hectares
Allotted: 125 Hectares
Units established: 52
Major Groups: Raymond, Hindustan Petroleum, PBM, Ayur
Special Infrastructure: Stone Park, Food Park
Area Developed: 273 Hectares
Allotted: 115 Hectares
Units established: 121
Major Groups: Birla, Jaypee
Special Infrastructure: Integrated infrastructure development centres (IIDC)
BHOPAL AKVN
GWALIOR AKVN
JABALPUR AKVN
REWA AKVN
Area Developed: 2,492 Hectares
Allotted: 1431 Hectares
Units established: 575
Major Groups: Tata, Ranbaxy, Eicher, Bridgestone, Hindustan Motors, Kinetic, SRF, S Kumars, Gajra, Nicholas Piramal, Indorama, IPCA, Bhilwara
Special Infrastructure: SEZ, Crystal IT Park, Food Park, Apparel Park
Malanpur, Malanpur Phase II, Banmore, Chainpura, Siddhgawan, Pratappura
Source:
Total developed area
7,147 Hectares
Total allotted area
3,089 Hectares
Total units established
1,360
Growth centres 19
Rewa, Waidhan
INDORE AKVN
Mandideep, Pillukhedi, Mandideep Phase II
Borgaon, Maneri, Purena
Pithampur, Kheda, Dewas, Maksi, Megh Nagar
Source: MPSIDC

8. Logistics

9. Sector Profile : Logistics
Logistics : Evolving Landscape in India
MP’s Infrastructural Backbone of Logistics Industry
MP. Offers a Strong Value Proposition
MP: A Preferred Investment Destination
Way Forward

10. Logistics : Evolving Landscape in India
Indian logistic market from the manufacturing sector alone is estimated to be around US$ 14.3 bn in 2004 and is expected to increase to US$ bn by with a CAGR of nearly 6.4%. The contribution of logistics industry to country’s GDP has increased from 7.4% in to 9.3% in
India spends around 13% of its GDP on logistics, compared to a global average of %. Globally better supply chain management has reduced logistics costs by nearly 1% over last 10 years. However Supply Chain Management still remains a very new concept for Indian industries which are increasingly looking to gain competitive edge by adopting logistics and Supply Chain Management concepts and practice.
Key trend in the industry is towards outsourcing logistics requirements to Third Party Logistics (3PL) players. The demand is specially driven by the entry of MNCs and increasing export focus of Indian companies .The estimated market for 3PL players in 2003 was US$ 250 mn and is likely to grow at a CAGR of more than 20% during next five years.
Consistent good performance of the economy (over 8% growth rate), is the key force, driving the growth in the logistics sector. Vibrant economic scenario of the country has ignited the activities in manufacturing/infrastructure sector.
2009
2004
14.31
19.54
CAGR 6.38%
Indian Logistics Market Projections
US$ Bn
Key Contributing Sectors
Automotive
Efficient supply chain ensures continuous assembly lines
Manufacturing
Just in time approach requires efficient logistics and distribution
FMCG
Strong distribution is the key to success
Retail
High inventory turnover requires efficient distribution and transportation
Healthcare
Cold chains are imperative for distribution of vaccines and biological products
Textiles
Efficient distribution reduces costs
Estimated Cost Saving by Reducing Logistics Cost by 1%
Indian logistic market is estimated to be around US$ 14.3 bn in 2004 and is expected to increase to US$ bn by 2009* with a CAGR of nearly 6.4%.
The contribution of logistics industry to country’s GDP has increased from 7.4% in to 9.3% in (source: Business Standard 14th August 2006)
Estimated cost saving table ( source: cygnus Estimates)
*(source: Credit Analysis & Research Limited)
Indian companies can save substantial cost by adopting modern supply chain and logistics solutions
Functions
At 13% of GDP
(US$ bn)
At 12% of GDP (US$ bn
Amount Saved (US$ bn
Transportation
32.45
29.95
2.50
Inventory
23.18
21.40
1.78
Packaging
10.20
9.41
0.78
Handling and Warehousing
8.34
7.70
0.64
Others
18.54
17.12
1.43
Total Logistics Costs
92.72
85.58
7.13
*(source: Credit Analysis & Research Limited)

11. Logistics : Evolving Landscape in India
India’s Infrastructure Snapshot
Overview of Logistics Industry
Roads
Rail
Air
Sea
2nd largest in the world with a total of more than 3.34 mn km road length.
200 km of expressway, km of National Highway
128,000 km of state highways and 470,000 km of district roads.
Covers almost all parts of the country with routes covering a total length of 63,940 km
20 international airports
180 minor and intermediate airports
6000 km of natural peninsular coastline
12 major ports and 187 minor ports
Channels of Logistics
Components of Freight Logistics
Surface Transport
Roads
Railways
Air Transport
Water Transport
Freight Transportation
Warehousing
Packaging
Custom Clearing and Forwarding
Inventory Management
Labeling and Order Processing
Freight
Snapshot of Logistics Operations via Major Channels
Major ports handle 90% of seaborne trade
In major ports together have handled mn tonnes of cargo traffic out of the total mn tonnes of cargo from all ports in the country
Container traffic has gone up by 14.2% during
Cargo handled at airports has gone up at a CAGR of 7.8% from 0.65 mn tonnes in to 1.3 mn tonnes in
International cargo handled has increased at 6.8%per annum, while domestic has increased at 9.9 % per annum
5 major airports have accounted for 90% of total cargo handled in the country
15% of passenger traffic and 30% of freight transport
Freight contributes over 65% of its revenue
In it handled 602 mn tonnes of freight
95% of revenue comes from the bulk commodities such as Coal, iron ore, cement, fertilizers and food grain. Coal alone constitutes nearly 50% of all bulk freight
Road transport accounts for 85% of passenger traffic and 70% of freight traffic
Currently Indian roads handles over 1,176 bn tonnes Km of freight per annum
Total number of goods vehicle has increased from 82,000 in 1951 to 4.04m in 2005
Water
Air
Railways
Roads
2nd largest in the world with a total of more than 3.34 mn km road length. (source: NHAI)
200 km of expressway, km of National Highway (source: NHAI)
128,000 km of state highways and 470,000 km of district roads. (source: NHAI)
Covers almost all parts of the country with routes covering a total length of 63,940 km*
6000 km of natural peninsular coastline*
12 major ports and 187 minor ports*
Road transport accounts for 85% of passenger traffic and 70% of freight traffic.*
Currently Indian roads handles over 1,176 bn tonnes Km of freight per annum (source: CII Logistics and Freight News)
Total number of goods vehicle has increased from 82,000 in 1951 to 4.04m in 2005
15% of passenger traffic and 30% of freight transport.*
Freight contributes over 65% of its revenue*
In it handled 602 mn tonnes of freight.*
95% of revenue comes from the bulk commodities such as Coal, iron ore, cement, fertilizers and food grain. Coal alone constitutes nearly 50% of all bulk freight*
Cargo handled at airports has gone up at a CAGR of 7.8% from 0.65 mn tonnes in to 1.3 mn tonnes in *
International cargo handled has gone up by 6.8%per annum, while domestic has increased at 9.9 % per annum*
5 major airports account for 90% of total cargo handled in the country*
Major ports handle 90% of seaborne trade.*
In major ports together have handled mn tonnes of cargo traffic out of the total mn tonnes of cargo from all ports in the country*
Container traffic has gone up by 14.2% during *
*(source: Business Standard)
*(source: Business Standard)

12. MP’s Infrastructural Backbone of Logistics Industry
Madhya Pradesh has a well developed transport infrastructure of roads, rails and airports km of National Highway runs across the state with total length of the roads in the state estimated around 67,600 km. The state also has 5000 km of rail networks with 425 trains passing through the state daily.
MP has 5 operational domestic airports. The Indore airport has the capability to handle international flights. The mammoth transport infrastructure of the state provides connectivity with all the key cities and major ports.
Under the National Highway Development Programme of NHAI, 1254 km of the existing roads are being converted into four lane highway.
State Wise Length of National Highways Km
3rd largest network of National Highways among states
Madhya Pradesh
Tamil Nadu
Maharashtra
Karnataka
orissa
Bihar
Gujarat
Rajasthan UP AP
Road Map of MP
Equidistance Connectivity - Key Strength
Delhi
744 km
Mumbai
779 km
Ahmedabad
568 km
Hyderabad
839 km
Bangalore
1401 km
Kolkata
911 km
Pune
802 km
Vadodara
509 km
Distances of key Cities from Bhopal
5200 km of National Highway (source: ministry of road and surface transport)
The state also has 5000 km of rail networks with 425 trains passing through the state daily. (source: Destination MP FICCI)
5 operational domestic airports. The Indore airports has the capability to handle international flights. (source: ministry of civil aviation)
Madhya Pradesh is striving to create state-of-the art infrastructure essential to sustain modern supply chain and logistics industry with a vision to transform the state into a key logistics hub of the country.

13. Warehousing – A Value Proposition
The state requires an immediate addition in capacity at strategic locations to ensure quality services to the target market.
The partition of the state has affected its warehousing capacity. The Government is taking several initiatives to promote investments in this area to rebuild its warehousing and logistics might.
The state offers a lucrative utilisation rates of 80-85%, which can be as high as 90-95% at strategic locations.
The Governments also invites private developers through lucrative business value propositions.
The economic growth of the country is further facilitating the growth of the industry in the State.
Item-wise Break-up of Warehousing Capacity
Changing Utilisation Trend of Storage Capacity
Partition of State
Capacity Usage & Utilization Rate

14. The Proposed Hubs For Logistics & Warehousing
Warehousing - Building Capacity
Along with the logistical hub for the Country, MP also has a substantial internal demand for warehousing.
Post partition, around 32% of states capacity was given to Chhattisgarh. This has created a significant shortage in warehousing capacity.
Government is taking several initiatives to upgrade the existing capacities and building capacities in the State.
Madhya Pradesh Warehousing & Logistics Corporation is the nodal agency of the GoMP with 1.2 million MT of capacity and presence in 232 locations.
Government also invites private players to take part in its drive to position MP as the logistical hub of the Country.
The Government has identified 11 locations as the hubs requiring immediate attention and have the capacity to become the major distribution centers for logistical activities and management. Further, 23 other locations require capacity building to meet requirements.
The Proposed Hubs For Logistics & Warehousing
Most Suitable Locations - Identified hubs for capacity building on the basis of expected demand, urgency of demand, road-rail connectivity and availability of land.
Based on estimated demand an additional capacity of 2.16 Million MT was to be generated between However, only ~ 1 million MT was created during the same period. Hence, there is a shortfall of 1.6 million MTs in capacity.
Other Potential Locations - Identified on the basis of expected demand, road-rail connectivity and availability of land.

15. MP Offers a Strong Value Proposition
Central location of MP facilitates equidistance connectivity with major Indian cities. The strategic location is the key incentive for various industries to establish their logistics hub in the state.
MP is the connecting link between the northern & southern states and eastern & western states of the Country. All major highways and rail routes passes through the state.
On completion, the North-South and East-West corridor passing through the state will provide further impetus to the logistics sector due to improved connectivity with key metro cities.
Companies can save a maximum of 25% of the transportation cost by locating their warehouse in MP via locating it in North. Similarly saving of 17%, 23% and 16% can be made in MP via locating it in southern, eastern and western part of the country.
Since 90% of the operational cost of a logistics company lies in transportation, substantial savings can be made by locating the company in the central region.
The peaceful labour environment in the state makes MP a favorable business destination.
Well developed infrastructure of roads and airports facilitates timely and expedite movement of goods across the country.
Key Ingredients of a Logistic Hub
Geographic location
Being centrally located, MP provides inherent advantage as a logistic and distribution hub for companies
Linkage with other cities
Well connected through roads, rail and by air with other major cities
Convenient linkages to Kandla Port, Jawahar Nehru Port etc.
Infrastructure
MP has well developed transport infrastructure.
Indore airport has the potential to handle international flights, international airport is also proposed at Bhopal
Skilled labour
Cost of labour US$ 2.3 per day as compared to US$ per day at metros
Labour peace
Man days lost due to strikes & lockouts is less than 0.5% of the total available man days
MP has Advantage Across All
Matrix of Distance From Central vis-à-vis Others parts of country
North
South
East
West
Central
Distance
450
2100
1400
1250
750
350
1500
1200
1300
400
2000
800
300
MP’s inherent strength coupled with advantage of connectivity and cost makes it an ideal investment destination

16. MP : A Preferred Investment Destination
MP provides an ideal combination of location, cost and infrastructure, factors critical for the efficient operations of the logistics industry. The State offers opportunities for logistic service providers specially the 3PL players as more and more companies are outsourcing their logistics requirements to specialized companies.
The Container Corporation of India has three operational inland ports in the state, at Mandideep Bhopal, Pithampur Indoor and Malanpur Gwalior.
Companies in the FMCG, manufacturing and textiles, sectors are increasingly looking at MP for establishing their storage and distribution networks.
Container Corporation of India has 3 operational dry ports in Madhya Pradesh
For entire FMCG products P&G have located their central warehouse in Bhopal
Malanpur, Gwalior
Mandideep, Bhopal
Proctor & Gamble, the international FMCG giant choose Bhopal to located their central warehouse for all FMCG products. The cost saving due to critical location has helped the company in slashing the price of their products, thus gaining a vital competitive edge in the price sensitive market.
Pithampur, Indore
Proposed MP’s Sectoral Hub
MP 3C’s Cost Advantage
Government Proactive Initiatives
Major Auto Manufacturing Hub
Hub for Manufacturing Radial Tyres in India
Largest Soya Processing Hub
FMCG Consumer Electronics Hub
Pharmaceutical and Herbal Product Hub
Rapidly Growing Textiles and Apparel Hub
Gems and jewellery Center
More than 1200 kms of National Highways being 4-laned under the NHDP
13 strategic stretches of State Highways covering 1871 kms being upgraded through BOT
MP Road Development Corporation constituted to spearhead road development in the state
5500 kms of fibre-optic network laid
Indore & Bhopal Airports are being upgraded as International Airports
Cost
Logistics Dependent Sectors
Infrastructure is the key
Connectivity
Conveyance
Creative Conducive and Competitive business environment to support your business

17. Way Forward Integrated Ware-housing Hub Central Warehouse
Madhya Pradesh offers multiple opportunities in the logistics sector specially for companies engaged in manufacturing and distribution activities.
A central warehousing facility would facilitate uninterrupted supply of raw materials and speedy distribution of finished goods across the country. Decrease in lead time will further result in substantial cost saving for the company.
Cold chain facilities have the potential to cater to the needs of pharmaceutical, biotechnology and food processing companies. A central unit will facilitate distribution in the wider area without locking investment in creating such expensive facilities in multiple places.
Madhya Pradesh State Industrial Development Corporation (MPSIDC) is planning to construct a state-of-the-art Integrated Transport Terminal, which will provide one stop-shop solution for all the logistics requirements of a company. The State Government is willing to partner with private players, foreign investors and other domestic and international companies in its endeavour.
The investment opportunities are ideal specially for 3rd Party Logistics and 4th Party Logistics services provider to make MP as the key hub for their various services component operations.
Integrated Ware-housing Hub
Handling Facilities
Octroi/Sales Tax check points
Material Handling & Storage
Transport Services
Trading and Regulatory Points
Trading
House
Repair and
Maintenance
Parking Space
infrastructure
Office & Social
Warehouses
CFS / ICD
Refrigerated Storage
Proposed MPSIDC project
Central Warehouse
Inland Container Ports
Integrated Transportation Hub
Cold Chain Facilities
Key Investment Opportunities
The untapped opportunities of the sector has the potential to render key competitive and strategic advantage for companies establishing their logistics operations in Madhya Pradesh.

18. Connecting Further Madhya Pradesh Warehousing & Logistics Corporation
M.P. State Industrial Development Corporation
Madhya Pradesh Road Development Corporation Ltd.
Madhya Pradesh Portal
Government of Madhya Pradesh