The Rs 700-crore Indian supply chain and logistics company Safexpress has operationalized a mega warehousing and logistics park in Indore with an investment of Rs 85 crore. Spread over an area of 1.15 million sq. ft. along the Agra-Mumbai stretch of National Highway 3, it is billed as central India’s largest warehousing facility.
Vineet Kanaujia, GM-Marketing, Safexpress, said: “This huge logistics park will fulfill the warehousing needs of companies located in and around Indore and enable us to provide clients with cutting-edge trans-shipment and 3PL services. By creating at least 500-1000 local jobs, it will trigger an economic revolution in the region and transform Indore into a supply chain mega-hub of India.”
Commenting on the choice of location for the new logistics park, Pawan Jain, CMD, Safexpress, said: “Indore is the 17th largest city in India, the only one to have both an IIT and IIM. It is already a prominent commercial and trading center. The city has the potential to morph into a major economic hub because of its central location. We expect the economy of the Indore region to continue growing at a healthy rate. Keeping this in mind, we have made this significant investment to create an impressive supply chain and logistics infrastructure in the area.”
Anticipating the introduction of GST in the near future, Safexpress is developing 32 logistics parks at key industrial centers all over India with an investment of Rs 600 crores. The Indore facility is the 17th such park to be set by the company, with 15 more to come up in the next few years. According to Safexpress officials, this is the second largest logistics park in India after the company’s Nagpur facility which is spread across 1.2 million sq. ft. After Indore, Safexpress intends to build logistics parks at Guwahati and Kochi.
Safexpress Learning Center
Safexpress has also opened a Learning Center at the Indore logistics park with residential facilities, training rooms, modern equipment and a library. It will offer training to 60 Safexpress employees at one go in soft (vocational) as well as hard skills (operational aspects) needed for the logistics trade. To begin with, the company will use the Center to augment the skills of its own employees located all over India. Later, its services may be extended to other organizations, according to company officials.
Said Kanaujia: “The Indian logistics and supply chain business, which is the backbone of the economy, is suffering from a huge skills gap. It is a manpower-intensive industry with a turnover of USD 110 billion which directly employs 45 million people, most of whom have not received any type of training. With 4-5 million more people set to join the industry in the next five years, the problem will worsen unless something is done on the training front. The Learning Center is a step in that direction.” Safexpress has recently tied up with CII to hold a variety of programs over the next one year to bridge the skills gap.
Impact of GST
The introduction of GST will transform the logistics and supply chain industry, according to Kanaujia. Taxation will become simple and uniform pan-India. Most companies will adopt newer supply chain models because warehousing will no longer be driven by taxation but by business needs. They will no longer have to operate a huge number of warehouses and depots all over India to save on taxation, like they do now, by showing stock transfers and local billings.
“With GST, companies will be able to do pan-Indian billing from any distribution center in the country, thus eliminating the need to operate warehouses in every state to save taxes,” Kanaujia explained. “They will increasingly outsource their supply chain and logistics needs to 3PL service provider such as Safexpress while minimizing their own warehousing infrastructure. We are opening ultra-modern logistics parks all over India to benefit from the opportunity when companies shrink their depots and look to outsource warehousing activities.”
He said that GST will end the age of mass brands in India while ushering in a new era of smaller brands. “Bigger brands and companies will not be able to succeed as much as they are doing now once GST comes into effect. Many smaller brands with nimble supply chains will emerge to give them a run for their money,” Kanaujia added, stressing that in the post-GST world, companies will look for a logistics company having warehouses all over India which can move goods from one part of the country to another in two to three days.
Safexpress, which has 566 offices, 2500 employees and 7 million sq. ft. of warehousing space all over India, is expecting to close the current financial year with a turnover of Rs 1,000 crores. It plans to add an additional 3 million sq. ft. of warehousing space over the next two years. Kanaujia said Safexpress currently holds 27 percent share of India’s logistics and warehousing market.