Future Group arm plans to expand logistic supply chain
posted on Jun 17, 2015
Future Supply Chain Solutions Limited (FSC), the logistics and supply chain vertical of Future group, is planning expansion to enhance their logistic supply chain business across the country. As part of expansion, the company will invest about Rs 200 crore to strengthen its warehouse capacity in India.
FSC recently acquired Delhi-based Brattle Foods and its logistic arm Laxman Logistics as part of its expansion. This deal has added 17,000 pallets and taken the total cold chain capacity to 22,000 pallets in seven cities. FSC launched a state-of-the-art integrated cold storage warehouse in Mehsana district in North Gujarat on Wednesday.
"There is a huge opportunity for cold storage warehouse business in India and looking at the growth of the sector, we are planning to add more 30,000 to 40,000 pallets in our cold warehouse business in the next two years," said Anshuman Singh, managing director and CEO of FSC.
The company is planning to invest about Rs 100 crore in cold storage warehouse expansion in two phases.
Singh said, "First we will move to those cities where urbanisation growth is high and where there is demand for frozen items."
The company has drawn 9/11 strategy for it. In its first phase, it will launch cold storage warehouses in Mumbra, Delhi, Kolkata, Bangalore, Ahmedabad, Pune, Hyderabad, Nagpur and Surat. After that, it will cover 11 tier-II cities in India.
Set up in 2007 to provide back-end services to Future Group's retail ventures like BigBazaar and Pantaloons, FSC has since started providing logistics services to third party companies such as automotive spare parts, all large FMCG players, electronics and also ATM makers, pharma, light engineering and lifestyle retailing and home furnishing players. FSC is also in process to increase dry warehouses capacity across the country. Currently, it is having nearly 5.5 million square feet of warehouse area and it plans to double it in the next two years with an investment of Rs 100 crores.
It has also tied up with Snapdeal as logistic partner in e-commerce segment.
Talking about overall industry, Singh said that India is having 30 million tonnes of cold storage capacity and out of it, 75 per cent space is consumed by potato only with the remaining being utilised by other food and FMCG items.
"The irony of the industry is lack of proper transportation availability. There are two million trucks available for dry items transportation but to shift temperature maintain items transportation, only 8,000 trucks exist in India.
FSC is also considering to enter the equity market but the time-frame has not yet been decided.
Kishore Biyani-owned Future Group holds 74 per cent stake in FSC and while the remaining 26 per cent stake is held by Hong Kong-based private equity Fung Capital.