The French firm FM Logistic, a leading international organization specializing in warehousing, transportation and co-packing, is planning to invest $150 million over five years as part of its strategy to grow in India.
The company has also announced the appointment of Mr. Alexandre Amine Soufiani as the new Managing Director of its India operations. He will take over from Mr. Gautam Dembla, one of the founders of Spear Logistics which FM Logistic acquired in 2016, who is set to retire after an illustrious career of 30+ years in the field of contract logistics.
Addressing a press conference in New Delhi, Mr. Jean Christophe Machet, Global CEO, FM Logistic, said: “India is one of the key strategic markets for FM Logistic. In 2016, we entered India through the acquisition of the Pune-based Spear Logistics. We see a huge untapped potential in India. The company is planning to make strategic investments in India to support its long-term growth. The GST reform provides a huge opportunity. Thanks to the new positive policies in India, our operations have become even more streamlined and efficient. We expect a very strong double-digit growth in India in FY 2019-20. Overall the company’s activities in India have been growing by an average 25% + YoY for the past 10 years.”
He added: “FM Logistic plans to strengthen its position in India by delivering on its post-GST strategy of focusing on developing multi-client facilities (MCF) in the most important Indian Economic Zones.”
The successful opening of FM Logistic’s first MCF in Mumbai (with extension in progress) will be followed by another MCF in Delhi NCR (near Gurugram), which is expected to commence operations from April.
FM Logistic has also acquired 31 acres of land in Jhajjar, near Gurugram. With the help of its real estate sister company NG Concept, construction activities are set to start soon. The Jhajjar MCF, the second one in the NCR region, will offer 700,000 square feet of warehousing space and will store about one lakh pallet positions once fully constructed. With these new projects FM aims to create 500 jobs in the next 12 months.
“FM Logistic in India has not only invested in transportation and warehousing activities, providing better warehousing and distribution services to its customers, but also in the digitalization of its various functions, notably in the Warehouse Management System (WMS) and Transport Management System (TMS) that offer a quality service and real-time visibility to customers”, stated the CEO.
Speaking on his new role as Managing Director of FM Logistic’s India operations, Mr. Alexandre Amine said: “I am delighted and deeply thankful to the Board for giving me the opportunity to strengthen FM Logistic’s Indian operations. I am also thankful to Gautam Dembla, my predecessor, and one of the founder members of Spear Logistics, who made FM Logistic one of the preferred 3PL companies in India. My role is to ensure that India becomes one of the best performing countries for FM Logistic and our team is committed to make FM Logistic India the leading player in the domain of warehousing, distribution and transportation.”
FM Logistic has recently added a few marquee clients in India, including Caterpillar for pan-India transportation managing 1000+ suppliers with a control tower, and TMS, a European retail major in Pune, to manage their B to B & B to C Distribution Center (800,000 sq. ft.), a major Indian retail company – 80,000 sq. ft. for their mother warehouse in Mumbai MCF, and a BIC Cello for managing their large in-plant warehouse at Vapi in Gujarat.
‘We want to be a strategic partner for our customers’
Interaction with Mr. Jean Christophe Machet, Global CEO, FM Logistic
Could you elaborate on the timing of your investment in the Indian market?
We started our operations in France, then expanded to the rest of Europe, Russia, China, Brazil, and now to India. We have been studying the Indian market closely since 2013. With 1.3 billion people, it is an obvious market of importance for us. India’s agenda is a perfect fit for our strategy with the GST being a significant evolution in favour of organized players like us.
How has your acquisition of Spear Logistics in 2016 helped your Indian market ambitions?
We acquired Spear Logistics in 2016 and the last three years have been fantastic in terms of consolidation with our partner. We are already among the top three in India in the dedicated 3PL space.
It is easy to make an acquisition but not so to ensure the acquisition is a success. We came across a report that stated 92 per cent of acquisitions fail due to bad integration, but in our case, we did not lose even a single customer nor a key employee after taking over Spear Logistics. We were fortunate to have the same foundation, values and corporate culture between Spear Logistics and FM, and feel Spear did a great job in integrating the two companies.
What kind of growth potential do you see for FM Logistic in India?
India already accounts for 13 per cent of FM Logistic’s global workforce and is the third largest, after Russia and France. With the kind of growth expected in India, it will overtake France in terms of number of people FM Logistic employs in five years’ time.
On the business side, we want to be a strategic partner for our customers by being flexible and agile in the solutions we deliver them.