Logistics major D B Schenker aims to double warehousing space to 7 million sq. ft

      05/13/2019

European logistics major D B Schenker aims to nearly double warehousing space to 7 million square feet in India in three years as it sees growing demand from corporates for such facilities, especially after the GST implementation, a top official has said.

The company expects its top-line from the logistics businesses comprising of contract logistics for companies and other land-based activities to grow at a faster pace of 20 per cent.

"We are at 4 million square feet of space under management and will take it to 7 million square feet in three years," its country chief executive Vishal Sharma told in an interaction.

From an investments perspective, it will not be a large tab as much of this space will be owned by other developers and will be contracted on a longer term basis, he said.

It can be noted that in the last few months, there have been a slew of announcements by realty developers about creating warehousing space. Sharma expressed happiness about getting the necessary space as required.

He said, the next three years will see a doubling up of space per centre to 1.50 lakh sq ft as the warehousing activities have become more concentrated aided by GST.

"In the pre-GST era, it was necessary to have warehousing at multiple locations. The same is now shifting to hubs," he said.

The company will have about 25 warehouses, with 10-12 of them being bigger warehouses, he said, adding that the NCR, West and southern market comprising the Bengaluru-Chennai belt are the clusters which will see a bulk of development of this space.

The company had posted a revenue of above Rs 1,400 crore in 2017-18 and, has been growing at an average of 18 per cent in the last three years, he said.

He said it is not looking at any particular asset in India from mergers and acquisitions (M&A) perspective, even though as a group it is not averse to such an idea. It is expanding its trucking business in the country which is again done as an asset-light model by having tie-ups with trucking companies.

Nearly, half of the company's revenue comes from the air logistics business where it has contracts with airliners to fly cargo to destinations.

It had to activate business continuity plans in the wake of the grounding of Jet Airways, Sharma said, adding the gradual grounding helped the logistics sector.

The company is impressed with the last mile delivery companies in the country and will be crystallising its terms of engagement with such innovative start-ups by the end of the year, he said.