Pune-based FM Logistic India, a subsidiary of France’s FM Logistic a 3PL player, is looking to set up intra-city warehousing units across Mumbai, Delhi and Bangalore, including by converting some abandoned mills into such facilities, amid an increasing demand for quick deliveries by online customers.
The company says it is in discussion with a closed mill owner in Mumbai and is exploring similar possibilities in Delhi and Bangalore. In addition, FM Logistic says it is also open to set up completely new intra-city warehousing facilities as well.
The French 3PL (third-party logistics) player made a foray into the Indian market after acquiring Pune-based warehousing firm Spear Logistics in 2016.
Alexandre Amine Soufiani, MD, FM Logistic India, says that in the post-Covid-19 scenario, having an intra-city warehousing facility is a must to be able to deliver the goods to the end-customer within hours of placement of an order. But, acquiring land in cities is a costly affair.
"We are scouting for warehousing facilities inside the cities of Mumbai and Delhi to either build new multi-story warehouses, which is a new concept, or to refurbish abandoned cotton mills in Mumbai within the city," added Soufiani.
He said he has to partner with e-commerce and other omni-channel retail companies and offer them multi-customer facilities with intra-city warehouses. At present, FM Logistic India has presence in over 90 locations, and provides warehousing and distribution logistics services for the FMCG, retail, automotive, e-commerce, engineering, telecom, pharma and other sectors.
According to Soufiani Mumbai which has many closed mills, FM Logistic India was looking at partnering with owners of those mills and transforming them into intra-city warehousing.
"In Mumbai, we are in talks with one of the mill owners, we are carrying out due diligence and looking at how we can make it safety-compliant, as we do not want to compromise on the safety aspects at all," said Soufiani.
He further states that there are two models, one is to take on lease a closed mill land or a sick factory unit, refurbish them with all safety measures like fire alarms and proper exit gates and use them as intra-city warehouses. The second model is to build from scratch vertically instead of horizontally to deal with the issue of land, which is both scarce and expensive.
"Besides requiring less land, a vertical warehousing facility for less gives the possibility of separation between the different customers and also has the advantage for the cold storage for pharma," he added.
For FY2019-20 FM Logistic India says it witnessed 15 percent growth in revenue, despite slowdown in the automotive sector as well as economy in general. Last year, the company announced setting up of a 31-acre multi-client logistics facility at Jhajjar in Haryana at an investment of $30 million (Rs 222 crore). This project is part of the company's plans to invest $150 million (Rs 1,110 crore) over the next five years in setting up warehouses in India, announced in March last year.