FM Logistic to double warehousing capacity to 1.2 cr sq ft in 4 years

December 30, 2020: Third-party logistics company FM Logistic plans to double its warehousing space to 1.2 crore sq ft in three to four years from 60 lakh sq ft at present as it expects demand for such facilities to increase in the aftermath of the pandemic, its MD and CEO Alexandre Amine Soufiani said. 

He further said - "We expect sales to return to pre-Covid levels by March 2021 as 90 percent of the business has already recovered by December."

With its plans to set up A-grade facilities in all metro cities and dynamic economic areas, especially multi-customer units, and focus on urban logistics, FM Logistic looks to attain leadership position in the sector, Soufiani said.

Grade A warehouses are categorised on the basis of construction quality, available space, location, amenities and clients, among others.  

In March 2019, FM Logistic had outlined its plans to invest $150 million over the next five years to set up new warehouses in India, with focus on multi-client warehouses.

"When we acquired Spear Logistics in 2016, there was only 20 lakh sq ft space and four warehousing units. Today we have 60 lakh sq ft in four years and we want to double this to take it to 1.20 crore sq ft under our operations in the next 3-4 years," Soufiani said.

The company has already announced its plans to add 40 lakh sq ft warehousing space in the next three years that will take its total space to 1 crore sq ft, he said, adding that it could add another 20 lakh sq ft. He said the company has added a total of 10 lakh sq ft space in the last six months, all for multi-customers facilities, including omni channel, pharma, e-groceries, FMCG, food, industrial, among others.

FM Logistic plans to have multi-customer facilities in Bengaluru, Delhi, Kolkata, Hyderabad and Chennai in the next 2-3 years.

The company is expected to soon commence operations at its Bhiwandi facility in Maharashtra, which is spread in 4 lakh sq ft space with a part of it dedicated for pharma clients. The upcoming state-of-the art warehousing facility at Jhajjar in Haryana will also be operational in the second quarter of 2021.
Earlier this month, FM Logistic had signed a strategic partnership with Welspun Logistic Park to develop 9 lakh sq feet space in Bhiwandi in the next 3 years.

"We could realise a quarter of our 40 (lakh sq ft).  There is another 10 lakh sq feet of space that we have also signed for which 4 lakh (sq ft) we are going to get this month, another 4 lakh sq ft we will be getting in April/May next year," he said.

The omnichannel strategy has now become a central strategy for most of the companies which are into retail, FMCG, groceries and pharma, among others, and has given a big opportunity to third party logistics providers. However, in the wake of the pandemic, safety, compliance and quality have become a must and players in segments such as FMCG, pharma and e-commerce are pushing more and more for A grade warehousing facilities, Soufiani said.

The company has signed five new contracts during the pandemic period. While omnichannel and auto segment accounts for 25 per cent of the company's overall business, pharma accounts for 10 per cent of business and the rest come from other segments.

"We expect revenue from omnichannel to grow to 40 per cent in the next 3-4 years as this is going to be the future. Auto revenue we expect to stay at the same level. However, we are also looking to double revenue from pharma to 200 per cent in the 3-4 years period as against 10 per cent at present," he said.

"Overall, we are looking at 35-40 per cent year-on-year growth in our revenue, going forward," Soufiani added.

The company wants to continue building new multi-customer facilities and signing big contracts.

"In addition to the overall portfolio of services that we offer, omnichannel and urban or intra-city logistics are also extremely important for us," he said. The company has added 1,000 people in the last six months, taking its total headcount to 6,000 from 2,500 in 2016. He said many of the projects are part of the ₹1,200 crore investment plan announced by the company in March last year.

"We have already consumed ₹200 crore of this. The pending ₹1,000 crore is still available for creating state-of-the-art A-grade facilities in all the metro cities and the dynamic economic areas of the country," he said. Besides, it will also be used for intra-city logistics facilities, IT systems as well as automation. Though full-automation in warehouses is not feasible in the country due to certain barriers, the company is going to have provision for automation in areas such as loading/uploading, inventory stock-taking, among others, he said.