GST propels Pune’s warehousing sector

Rujuta Parekh
Tuesday, 3 October 2017

Pune: Good living conditions, connectivity with big cities and being an important logistics hub (thanks to many automobile and engineering companies) has made Pune an important market for the warehousing sector. Many national and international logistics companies are setting base here as the industry looks towards larger consolidated warehouses instead of smaller city-centric warehouses. 

Pune: Good living conditions, connectivity with big cities and being an important logistics hub (thanks to many automobile and engineering companies) has made Pune an important market for the warehousing sector. Many national and international logistics companies are setting base here as the industry looks towards larger consolidated warehouses instead of smaller city-centric warehouses. 

FM Logistic, from France, recently acquired Pune-based Spear Logistics to launch their India operations. Strategic Project Director and Director Operations-Asia Pacific, FM Logistic, Stephane Descarpentries said the company will start a new 2.5 lakh square feet warehouse in Chakan.

Descarpentries said, “In order to have immediately a critical size in the market, we decided to enter India through an acquisition and Spear Logistics was the perfect choice with its strong and skilled team, a national footprint of 2.9 million sq ft of warehousing space and prestigious customers like Siemens, Crompton, Atlas Copco, Indus Tower, Godrej, Honeywell, ITC and others.”

About expansion plans in Pune, he stated that the India headquarters for the company is in Pune. “Pune is a very important city for us. It is a good choice as Pune provides good conditions of living to our employees, besides good connections to other big cities. 

“And as we are growing, we will need more and more talent to support our development, which is available here. And secondly it is an important logistics hub with majority of auto and engineering companies. We have already 700 employees in Pune, and we will continue to develop our activities in the Pune’s region. We will soon start a new warehouse of 2,50,000 sq ft in Chakan for an international retailer,” he said. 

He added that in parallel, logistics will become omni-channel in India. “This means that from the same warehouse, we will have to be able to prepare orders for shops, wholesalers as well as for final customers as e-commerce is developing very fast. It also means more complex processes and IT tools to support these different channels of distribution. So the logistics sector will see many investments within the next years, and will see an increase of the technical and management skills,” he said. 

Speaking about expansion plans for India, he said, “We aim at investing Euro 50 million within the next three to five years in creation of multi-client sites close to the main Indian cities, development of a new version of our WMS (warehouse management system), innovation and technology and  training of our teams and managers at our internal school named Spear Academy. 

We will start our first multi-clients warehouse by end of this year in Mumbai (2,52,000 square feet, 35,000 pallet positions). We have signed our first two customers for this warehouse and are in discussion with several others. 

We are very close to signing a deal to buy land near Gurgaon where we will create 600,000 sq ft of our second such facility in India. In parallel we will develop our transport and distribution network,”  Descarpentries concluded. 

GST a game-changer in Logistics
† The logistics sector is fragmented, with many small local players, but the Goods and Services Tax (GST) will change the logistics network of warehouse sector customers in a few months.
† This will lead to bigger warehouses, which can only be managed by professional logistics providers through professional tools like WMS, racking systems, firefighting systems and others.
† Most warehouse sector customers, especially in consumer goods, retail, cosmetics and health sectors, have concrete plans to reduce smaller warehouses by 50 per cent and move to bigger warehouses.

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