market research report : warehousing market in india 2014 - sample

Warehousing Market – India

October 2014

2

Executive Summary

Market

Competition

Warehousing market in India is poised to grow at a significant rate till 20-- making it one of the prime investment segment of the logistic industry

Demand for warehousing requirement is expected to grow at ~b% CAGR till 2020

Unorganized vs. organized breakup of warehousing sector is in the ratio of x : y

Segmentation split of warehousing requirement: Cold storage, Industrial/Retail, CFS/ICD and Agriculture

Major Players

Player 1 Player 2 Player 3 Player 4

Player 5 Player 6 Player 7 Player 8

Drivers & Challenges

Challenges Strategic Challenges

Operational Challenges

Government Initiatives

Trends Consolidation in the Warehousing Market

Changing Tax Policy and Outsourcing of Warehousing to 3PLs

State of Automation in the Warehousing Industry

PE Activity in Warehousing Market

Adoption of New Technologies

WAREHOUSING MARKET IN INDIA 2014.PPT

Drivers Rapid Growth in Organized Retail & Major Industry

Segments

Growth in E-commerce

Growth in International Trade

Growth in Containerization

Rising Domestic Consumption

Increased Demand from Farmers

Initiatives by the Department of Food and Public Distribution

Shift to GST tax regime

Warehousing Act

Private Investment in Logistics Parks and FTWZs Infrastructural Developments Development of the Dedicated Freight Corridor

3

•Macroeconomic Indicators

•Introduction

•Logistic Market Overview

•Warehouse Market

•Warehouse Classification

•Business Models

•Establishment Criteria

•Drivers & Challenges

•Government Initiative

•Warehousing Opportunities in India

Opportunities in Rural Areas

•Trends

•Competitive Landscape

•Strategic Recommendation

•Appendix


4

Macroeconomic Indicators (1/3)

12

13

14

15

16

a4

Q3

c3 b3

Q2

a3

Q4

c4

b4

INR tr

c2

b2 a2

Q1

d1

c1 b1 a1

GDP at Factor Cost: Quarterly

Inflation Rate: Monthly

ABC MARKET IN INDIA 2014.PPT

2013-14 2012-13 2011-12 2014-15

-2

-1

0

1

2

t

s

Oct 2013 - Nov 2013

q

Aug 2013 - Sep 2013 Jul 2013 - Aug 2013

r

Sep 2013 - Oct 2013

p

%

Nov 2013 - Dec 2013

5

Warehousing – Value Chain

Text Text Text Text Text

Text Text Text Text Text

Logistics

Transportation Warehousing Value-added Services

• Text


SAMPLE

6

Prime Logistics Function in India


Asia – Pacific Market Overview

• Text

• Text

• Text

• Text

Mature

Unique

Mid-level

Developing

Text

Text

Text

Transportation Warehousing

Value added services

Note: WMS - Warehouse Management System

7 WAREHOUSING MARKET IN INDIA 2014.PPT

Logistics market in India has witnessed an exponential growth rate over the past decade

• Logistics is defined as a business planning framework involving procurement, maintenance, distribution, and replacement of personnel and material

In 20--, the global annual logistics spend has been valued at about INR x tr

The annual logistics cost in India is valued at INR x bn and it is growing at a-b% annually

The annual logistics cost in India is estimated to be c% of the GDP

The Transportation, Logistics, Warehousing and Packaging Sector in India is dominated by the unorganized segment, while the organized segment accounts for less than d% of the logistic sector in India

Globally, logistics industry represents a significant part of the economy, as it generally constitute between e-f % of the GDP of a country

• India is still on the evolving stages in the logistic Industry with much of its focus being on enabling ‘physical distribution’ rather than ‘progressive integrated logistics management’

0

+x%

2013

x6

2014e

x5

2015e

x4

2016e

x3

2017e

x2

2018e

x1

INR bn

z

p

y

o

x

n

2014

w

m

2012 2010 2007

World Rank(proportion to highest ranking nations) LPI score

Logistics Market Overview – India

Logistics Performance Indicator Logistic Market Size & Growth

8

Warehousing market in India is poised to grow due to rapid expansion of agriculture and industrial sectors in India


Warehousing Market – Overview (1/2)

• Warehousing forms a crucial link in the overall logistics value chain

• A warehouse provides facilities for processing, packing, blending, grading of the goods for the purpose of sale

• Prospective buyers can inspect the goods kept in a warehouse

• Warehousing capacity (agriculture) as per planning commission working committee report 20-- is b MMT

Recent estimates suggest that it has increased to q MMT by Mar, 20--

• Growing at a rate of c-d% every year warehousing market in India is expected to grow more than INR y bn approx by 20--

• Broadly classified, the Indian warehouse market majorly consists of two segments – Agricultural and Industrial/Retail warehousing

• Further segmentations are done on the basis of services provided, and analyzed subsequently

• Agricultural produce is estimated to grow upto z MMT by 20--

• As per Government figures of food production in 20--, the gap between agri-warehousing supply and demand stands at nearly n MMT

• Agri - warehousing market was estimated at about INR f bn in 20--

• Industrial sector growth slowed to a 20 year low of e% in 20--, raising fresh worries about the health of the crucial sector, however the same is expected to grow at close to g% in 20--

Warehousing – Market Size & Growth

Market Segmentation – Application Based

B4%

B3%

B2%

B1%

Freight Forwarding

VALs

Transportation

Warehousing

C1% C3%

C4%

C2%

Agriculture

CFS/ICD

Industrial Retail

Cold Storage

Logistics Market Warehousing Market Note: Market size of warehousing does not include temperature controlled warehousing

20--

INR bn

a6 +X% a5

a4

2017e

a3

2018e

a2

2016e

a1

2015e 2014e 2013

9

The warehousing market exhibits tremendous potential for growth and investment opportunities


Warehousing Market – Overview (2/2)

• Text

Industrial Warehousing (IW) Market

Agricultural Warehousing (AW) Market

Note: Market size of warehousing does not include temperature controlled warehousing

d5

2016e 2018e

d6

2017e

d4

+x%

INR bn

2015e

d3

2014e

d2

2013

d1

INR bn

e1

2015e

e2

2017e

+y%

2014e

e6

2013

e5

2018e

e4

2016e

e3

10

Warehousing attractiveness – comparative analysis

Demand growth

Capital requirement

Entry barriers

CFS

ICD

Agricultural warehousing

Cold warehousing

Logistics park

FTWZ

Small scale independent warehousing

Large independent high end warehouse

Network of large high end warehouse

Parameters

Note: Parameters are ranked in accordance with the following scale : 1 – Very High > 2 – High > 3 – Medium > 4 – Low ICD - Inland Container Depot , CFS - Container Freight Station, FTWZ - Free Trade and Warehousing Zones


Sub-segments

11

India’s fast paced international and domestic trade by air provides tremendous scope for warehouse market


• Text

Classification Volume (2006) Volume (2011) Growth in CAGR Major airports

Tier-II hubs (metros)

Text Text C% Pune, Kochi, Kozhikode, Ahmedabad, Trivandrum

Tier-II hubs (non metros)

Text Text F% Amritsar, Nagpur, Jaipur, Guwahati, Coimbatore

Emergence and Growth of New Cargo Centers

Government Initiatives •Text

Plan Investment

10th Plan (20--) Text

11th Plan (20--) Text

12th Five-Year Plan (20--) Text

2012-13

d1

d2

2009-10

c1

c2

2011-12

b1

b2

2010-11

a1

a2

2008-09 2007-08 2006-07 2005-06

+x%

h1

h2

g1

g2

f1

f2

e1

e2

Domestic International

Air Cargo Output through All Indian Airports

MMT

12

90 % by volume and 70 % by value of India’s external trade is via maritime traffic


• Text

Government Initiatives Schemes to develop new airports in Tier I and Tier II cities will be launched for implementation through the Airport Authority of India or the PPP mode

Maritime Agenda : Vision 2020

A Government of India (GoI) initiative

Text

Text

Text

Text

a3

a1 b1

2009-10

a2 b2

2019-20e

b3

2011-12

a4

b4

2016-17e

Capacity

Traffic

Phase 1 Phase 2 Phase 3

mn tons

13

SAMPLE Two primary business models based on operator’s preferences

Model A

Model B

Text

Text

Built-to-suit (BTS)

• Text

Direct land purchase

Partnership with land developer

• Text

• Text

Built-to-suit (BTS)

Long-term Land Lease

Text Text

Text Text


14

SAMPLE Key parameters for building warehouses

Parameters

Text

Text

Text

• Text

• Text

• Text

Text • Text


Text • Text

15

SAMPLE Warehousing attractiveness – Indian cities

Types of Hubs Definitions Cities

Primary Hubs • Text Text

Secondary Hubs • Text Text

Tertiary Hubs • Text Text


16

Drivers & Challenges

Drivers

Rapid Growth in Organized Retail & Major Industry Segments

Growth in E-commerce


Growth in Containerization


Increased Demand from Farmers

Challenges

Strategic Challenges

Operational Challenges


17

Presence of extremely affordable and desirable e-Commerce options is driving demand for warehousing in India

• Text

Growth in e-Commerce Impact


e-Commerce Market Size & Growth e-Commerce Market Segmentation (2013)

4

INR tr

+x%

2013

a6

2014e

a5

2015e

a4

2016e

a3

2017e

a2

2018e

a1

B1%

B3%

B2%

B5%

B4% Retailing

Online Travel

Classifieds

Online Other Services

Financial Services

18


Growth in international trade is providing huge impetus to the growth of warehousing sector

• Text

Impact


India’s Total Export India’s Total Import

INR bn +x%

2011-12

a5

2013-14

a4

2012-13

a3

2009-10

a2

2010-11

a1

0

b2

2012-13 2013-14

b1

2010-11 2009-10 2011-12

+y% b5 b4

b3

Government of India plans to double India’s exports of goods and

services of by 2014-15

INR bn

Imports into India are also expected to grow

further, particularly of oil and capital good

19

Rising containerized cargo traffic has led to growth of CFSs and ICDs

Impact Growth in Containerization (1/2)


• Text

Growth in Overall Containerized Cargo

+x% a5

a2

2012

a3

2013

a4

2011 2010

a1

2009

Containerized Traffic (Volume in mn TEU)

20


Rising income and consumption levels will indirectly push the demand for better warehousing in India

Aggregate Consumption (INR tr) Aggregate Disposable Income (INR tr)

>1000

500-1000

200-500

90-200

<90

Household Income Brackets (INR ‘000)

Impact Impact


• Text

100%

80%

60%

40%

20%

0%

2025e

p3

M1%

p1

N5%

M2%

N4%

N2%

N1%

p2

Q5%

Q4%

Q3%

Q2% Q1%

N3%

M3% M4%

M5%

2005 2015e

Deprived

Aspirers

Seekers

Strivers

Globals

0%

60%

40%

20%

80%

100%

D2%

D3%

D4%

D5%

a2

C1%

C2%

C3%

C4% C5% B5%

B1%

B4% B3%

B2%

a1

2015e

a3

D1%

2005 2025e

21

Skewed distribution of warehouses is a major concern for the farmers


Necessity of warehouse in rural India • Text

Region Wise Distribution of Agricultural Storage Capacity (2013)

B3%

B5% B6%

B4%

B1%

B2%

West

East

North-East and UT

Central

South

North

Rural india godown profile

three or more chamber X1%

two chamber

X3% single chamber

X2%

Y1%

godowns sanctioned

by NCDC

godowns sanctioned

by NABARAD

Y3% Y2%

all surveyed godowns

Capacity Utilization

Increased Demand from Farmers (2/2)

22

Strategic Challenges (6/7)

• Text

Lack of Power Supply & Rising Cost

Future Power Demand-Supply Scenario

2007 2012e 2017e Supply

a6

Y6%

Demand

a5

X5%

Y5%

Supply

a4

X4%

Y4%

Demand

a3

X3%

Y3%

Supply

a2

X2%

Y2%

Demand

a1

X1% Y1% X6%

Peak Base

Peak Power Scenario in India (2013)

Impact


30

10

50

North- East

‘000 MW

b5 a5

East

b4 a4

South

b3

a3

West

b2 a2

North

b1 a1

Peak Demand Met Peak Demand

23

Operational Challenges (4/5)

Low Level of IT Penetration (2/3)


• Text

Service Sector Segmentation at Factor Cost (2012-13) Text

Text

Text

Text

Text

Cloud Technology Penetration and Share and Growth of India’s Services Sector

B5%

B4% B3%

B2%

B1%

Community, social, & personal services

Others

Trade, hotels, & restaurants

Transport, storage, & communication

Financing, insurance, real estate, & business services

IT and ITeS form a major portion of business services

though with much limited

penetration in the warehouse sector

24

Government has taken strong initiatives and implemented various policies for the development of warehousing sector

Initiatives by the Department of Food and Public Distribution

• Text

Key Initiatives

Warehousing Act

• Text

Development of the Dedicated Freight Corridor

• Text

Infrastructural Developments

• Text

Private Investment in Logistics Parks and FTWZs

• Text

Shift to GST Tax Regime

• Text


25

The Department is implementing a scheme to create an additional storage capacity of 0.54 MMT in the NE States

Initiatives by the Department of Food and Public Distribution (2/2)


Significant Achievements of the Year

• Text

Augmentation of Storage Capacity in NE Region

• Text

States Total Capacity

Approved (MT)

Planning for Capacity Augmentation (MT)

Created under 11th FYP

Planned for 12th FYP

State 1

State 2

State 3

State 4

State 5

State 6

State 7

State 8

Total

26

Opportunities for Warehousing in India (2/5)


Growth of Pharmaceutical Market (Value-wise) Growth of Automobile Sector (Production-wise)

Growth in Major Warehousing Sectors (1/2)

Growth in FMCG Sector (Revenue-wise) Growth in Agriculture Sector

INR tr

+x1%

a3

a2

2020

a1

2013 2005

000’ units +x2%

2009-10

b4

2010-11

b3

2011-12

b2

2012-13

b1

INR tr

+x3%

2009

c5

2010

c4

2011

c3

2012

c2

2013

c1

INR tr +x4%

2009-10

d5

2010-11

d4

2011-12

d3

2012-13

d2

2013-14

d1

27

Opportunities for Warehousing in India (3/5)


International Cargo Handled through Major Airports (Jan – Sep, 2013)

Growth in Major Warehousing Sectors (2/2)

Exim Cargo Handled by Major Indian Ports (2012)

City 7

a7

City 6

a6

City 5

a5

City 4

a4

City 3

a3

City 2

a2

City 1

a1 000’ tons

Port 12

b12

Port 11

b11

Port 10

b10

Port 9

b9

Port 8

b8

Port 7

b7

Port 6

b6

Port 5

b5

Port 4

b4

Port 3

b3

Port 2

b2

Port 1

b1

mn tons

28

SAMPLE

`

Consolidation in the Warehousing Market

Changing Tax Policy and Outsourcing of Warehousing to 3PLs

Adoption of New Technologies


State of Automation in the Warehousing Industry Trends

Key Trends – Summary

COURIER MARKET IN INDIA 2014.PPT

29

E-commerce companies choose to run the operations in-house as supply chain is a core aspect of the business

Changing Tax Policy and Outsourcing of Warehousing to 3PLs (2/2)

• Text


Industry Preference for Outsourcing

FMCG and Retail Industries Apparel & Fashion Companies,

Ecommerce Industry Beverage Companies

• Text • Text • Text

Note: C&F: Clearing and Forwarding, 3PL: Third Party Logistics, FMCG: Fast Moving Consumer Goods

30

Growth in warehouse business has attracted large scale investments from PE firms

• Text

Some PE Investments in Warehousing Sector

Year Logistics Company PE Investor Deal Size (INR mn)

20-- Text Text y1

20-- Text Text y2

20-- Text Text y3

20-- Text Text y4

20-- Text Text y5


PE investments from 2011-14

Sector Value (INR mn) Annual revenue growth

Warehousing and Cold Chain Storage / Agri Logistics x a - b%


31

SAMPLE Porter’s Five Forces Analysis

Competitive Rivalry • Text

Bargaining Power of Suppliers

• Text

Bargaining Power of Buyers

• Text

Threat of Substitutes

• Text

Threat of New Entrants

• Text

Impact Medium


Impact High

Impact High

Impact Medium

Impact Low

32

Key Ratios of Top 3 Companies – Operational Basis (FY 2013) (1/3)

Competitive Benchmarking (2/5)

0

5

10

15

20

%

b3

Player 3 Player 1

b1 a1

a3

Player 2

b2 a2

Net Margin Operating Margin

• Player 3 recorded operating margin of -%, higher than that of Player 1 which recorded operating margin of -% but lower than that of Player 2 which recorded operating margin of -%

• Net margin for Player 1, Player 2 and Player 3 are -%, -% and -% respectively, wherein Player 2 has the highest net margin among these three companies


33

SAMPLE

Key People

Products and Services

Company Information Offices and Centres – India

Corporate Address

Tel No.

Fax No.

Website

Year of Incorporation

Ticker Symbol

Stock Exchange

Category Products/Services

Sectors (EPC)

Name Designation

Head Office

Public: Domestic Company – Player 1(1/5)


34

SAMPLE Financial Snapshot Key Ratios

Financial Summary

• The company earned a net profit of INR - mn in FY 2014, as compared to net profit of INR - mn in FY 2013

• The company reported total income of INR - mn in FY 2014, registering an increase of -% over FY 2013

• The company earned an operating margin of -% in FY 2014, a decrease of m percentage points over FY 2013

• The company reported debt to equity ratio of - in FY 2014, registering an increase of -% over FY 2013

Key Financial Performance Indicators

Indicators Value (08/27/2014)

Market Capitalization (INR mn)

Total Enterprise Value (INR mn)

EPS (INR)

PE Ratio (Absolute)

Improved Decline

Net Profit/Loss Total Income INR mn INR mn

2011

p4

r4

2012

p3

r3

2013

p2

r2

2014

p1

r1

Public: Domestic Company – Player 1 (2/5)

Particulars y-o-y change

(2014-13) 2014 2013 2012 2011

Profitability Ratios

Operating Margin

Net Margin

Profit Before Tax Margin

Return on Equity

Return on Capital Employed

Return on Working Capital

Return on Assets

Return on Fixed Assets

Cost Ratios Operating costs (% of Sales)

Administration costs (% of Sales)

Interest costs (% of Sales)

Liquidity Ratios Current Ratio

Cash Ratio

Leverage Ratios Debt to Equity Ratio

Debt to Capital Ratio

Interest Coverage Ratio

Efficiency Ratios Fixed Asset Turnover

Asset Turnover

Current Asset Turnover

Working Capital Turnover

Capital Employed Turnover

Note : This company has had a fiscal year change on Dec-31, 2011


35

SAMPLE Key Business Segments Key Geographic Segments

Business Highlights(1/2)

Description News

Overview • Text

8%

%

A4% B4%

C4%

2014

A3% B3%

C3%

B2% A2%

C2%

B1% A1%

C1%

2013 2012 2010

Others

Multimodal Transport Operations

Project & Engineering Solutions

Container Freight Stations


%

A4% C4% B4%

D4%

G4% F4%

A3% C3% B3%

E4%

D3% E3%

G3% F3%

2012

A2% C2% B2%

D2% E2% G2% F2%

2010

A1% C1%

B1% D1% E1%

F1%

2013 2014

America

Far East

India

Europe Australia & New Zealand

Africa

Mediterranean


36

SAMPLE Business Highlights(2/2)



Description News

Extensive Product Portfolio

• Text

Awards & Recognitions • Text

Acquisitions • Text

37

SAMPLE

• Text • Text

• Text

• Text

T O

W S



38

SAMPLE Private: Domestic Company – Player 2 (1/5)

Key People

Products and Services

Company Information Offices and Centres – India

Category Products/Services

Sectors (EPC)

Name Designation

Corporate Address

Tel No.

Fax No.

Website

Year of Incorporation

Head Office


39

SAMPLE Ownership Structure

Name No. of Shares held

Total

Ownership structure corresponds to Date of AGM: 20/09/2013

Shareholders of the Company

100%

B1%

B3% B2%

Directors or relatives of directors

Bodies corporate

Other top 50 shareholders

Private: Domestic Company – Player 2 (2/5)


40

SAMPLE Financial Snapshot Key Ratios

Particulars y-o-y change

(2013-12) 2013 2012 2011 2010

Profitability Ratios

Operating Margin

Net Margin

Profit Before Tax Margin

Return on Equity

Return on Capital Employed

Return on Working Capital

Return on Assets

Return on Fixed Assets

Cost Ratios Operating costs (% of Sales)

Administration costs (% of Sales)

Interest costs (% of Sales)

Liquidity Ratios Current Ratio

Cash Ratio

Leverage Ratios Debt to Equity Ratio

Debt to Capital Ratio

Interest Coverage Ratio

Efficiency Ratios Fixed Asset Turnover

Asset Turnover

Current Asset Turnover

Working Capital Turnover

Capital Employed Turnover


Improved Decline


Total Income Net Profit/Loss

2012 2011 2010

p3

r2 r3

p2

p1

r4

INR mn

r1

2013

p4

INR mn

Financial Summary

• The company earned a net profit of INR - mn in FY 2013, as compared to net profit of INR - mn in FY 2012

• The company reported total income of INR - mn in FY 2013, registering an increase of -% over FY 2012

• The company earned an operating margin of -% in FY 2013, an increase of k percentage points over FY 2012

• The company reported debt to equity ratio of q in FY 2013, an increase of -% over FY 2012

41

SAMPLE Business Highlights


Description News

Overview • Text

Extensive Product Portfolio

• Text

MoU Agreement • Text


42

SAMPLE

• Text • Text

• Text • Text

T O

W S



43

SAMPLE Strategic Recommendation (1/7)


Haryana

• Text

• Text

Strategically Positioned and Fact File

Economic Snapshots

• Text

• Text

Upcoming Investment Projects

Competitive Advantage

Overview

Opportunities for Warehousing in Haryana (1/2)

44

Strategic Recommendation (7/7)

Improving Order Picking Efficiency

Assignment Policy 1

• Text

Assignment Policy 3

• Text

Assignment Policy 2

• Text

Assignment Policy 4

• Text

Cause

Effect • Text

Minimizing the total distance traveled


45

Thank you for the attention Warehousing Market – India 2014 report is a part of Netscribes’ Automotive and Logistics Series. For any queries or customized research requirements, contact us at:

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market research report : warehousing market in india 2014 - sample

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