With its plans to set up A grade facilities in all metro cities and ‘dynamic economic areas’, especially multi-customer units, and focus on urban logistics, FM Logistic looks to attain leadership position in the sector
Third party logistics company, FM Logistic plans to double its warehousing space to 1.2 crore sq. feet in three to four years from 60 lakh sq. feet at present as it expects demand for such facilities to increase in the aftermath of the pandemic. Elaborating about this decision, Alexandre Amine Soufiani, Managing Director and CEO, FM Logistic, said, “We expect sales to return to the pre-pandemic levels by March 2021 as 90% of the business has already recovered by December.” With its plans to set up A grade facilities in all metro cities and ‘dynamic economic areas’, especially multi-customer units, and focus on urban logistics, FM Logistic looks to attain leadership position in the sector.
Grade A warehouses are categorised on the basis of construction quality, available space, location, amenities and clients, among others. In March 2019, FM Logistic had outlined its plans to invest USD 150 million over the next five years to set up new warehouses in India, with focus on multi-client warehouses. “When we acquired Spear Logistics in 2016, there was only 20 lakh sq. feet space and four warehousing units. Today we have 60 lakh sq. feet in four years and we want to double this to take it to 1.20 crore sq. feet under our operations in the next 3-4 years,” Soufiani said.
The company has already announced its plans to add 40 lakh sq. feet warehousing space in the next three years that will take its total space to 1 crore sq. feet, he said, adding that it could add another 20 lakh sq. feet. He said the company has added a total of 10 lakh sq. feet space in the last six months, all for multi-customers facilities, including omni-channel, pharmaceuticals, e-groceries, FMCG, food, industrial, among others. FM Logistic plans to have multi-customer facilities in Bengaluru, Delhi, Kolkata, Hyderabad and Chennai in the next 2-3 years.
The company is expected to soon commence operations at its Bhiwandi facility in Maharashtra, which is spread over 4 lakh sq. feet space with a part of it dedicated for pharmaceutical clients. The upcoming state-of-the art warehousing facility at Jhajjar in Haryana will also be operational in the second quarter of 2021. Earlier this month, FM Logistic had signed a strategic partnership with Welspun Logistic Park to develop 9 lakh sq. feet space in Bhiwandi in the next three years. “We could realise a quarter of our 40 lakh sq. feet. There is another 10 lakh sq. feet of space that we have also signed for which 4 lakh sq. feet we are going to get this month and another 4 lakh sq. feet we will be getting in April or May next year,” he said.
The omni-channel strategy has now become a central strategy for most of the companies which are into retail, FMCG, groceries and pharmaceuticals, among others, and has given a big opportunity to third party logistics providers. However, in the wake of pandemic, safety, compliance and quality have become a must and players in segments such as FMCG, pharmaceuticals and e-commerce are pushing more and more for A grade warehousing facilities, Soufiani said. The company has signed five new contracts during the pandemic period. While omni-channel and auto segment account for 25% of the company’s overall business, pharmaceuticals accounts for 10% of business and the rest comes from other segments.
“We expect revenue from omni-channel to grow to 40% in the next 3-4 years as this is going to be the future. Auto revenue we expect to stay at the same level. However, we are also looking to double revenue from pharmaceuticals to 200% in the 3-4 years period as against 10% at present,” he said. “Overall, we are looking at 35-40% year-on-year growth in our revenue, going forward,” Soufiani added. The company wants to continue building new multi-customer facilities and signing big contracts. “In addition to the overall portfolio of services that we offer, omni-channel and urban or intra-city logistics are also extremely important for us,” he said. The company has added 1,000 people in the last six months, taking its total head count to 6,000 from 2,500 in 2016. He said many of the projects are part of the Rs 1,200 crore investment plan announced by the company in March last year. “We have already consumed Rs 200 crore of this. The pending Rs 1,000 crore is still available for creating state-of the art A grade facilities in all the metro cities and the dynamic economic areas of the country,” he said. Besides, it will also be used for intra-city logistics facilities, IT systems as well as automation. Though full-automation in warehouses is not feasible in the country due to certain barriers, the company is going to have provision for automation in areas such as loading/uploading, inventory stock-taking, among others, he said.