TVS ILP elevates warehousing standards
“With the influx of companies venturing into Tier-2 and 3 markets, there's an imperative for the industry to reassess models and strategies so that they can effectively harness the emerging opportunities.”
Manikandan Ramachandran, COO, TVS ILP
Tier 2 and 3 cities in India have shown a huge potential in the last few years due to significant improvement in regional infrastructure, boosted by government policies and increased demand for goods in these regions. As a result, many industry giants have expressed interest in establishing their bases in these locations to move closer to their end customers. This move has given rise to demand for new age and efficient warehousing solutions that cater to the companies’ growth and expansion targets. FMCG and FMEG firms are currently the most promising businesses in these tiers due to their unique requirement for state-of-art warehouses.
However, there are some critical considerations that loom over the industry, with the availability and quality of infrastructure—spanning transportation networks, power supply, and logistics facilities—standing out as top concerns.
The regulatory framework governing the sector, covering aspects like land acquisition processes, zoning regulations, and the overall ease of doing business, adds another layer of complexity. A conducive regulatory environment not only fosters investor confidence but also stimulates real-estate developers to explore new projects.
Investment potential and opportunities
The investment potential in expanding warehouses in Tier 2 and Tier 3 cities within India is exceptionally promising, representing a lucrative opportunity for investors seeking growth in the dynamic logistics and supply chain landscape. Grade-A facilities are particularly sought after, driven by a need for improved storage capacity, operational efficiency, and cost savings.
Growth of organized retail has heightened the need for warehouses to accommodate goods sold in stores, resulting in rising rental income and long-term lease agreements. The growing consumer demand in Tier 2 and Tier 3 cities further amplifies the necessity for additional warehouses across the country. This trend makes the warehousing sector highly attractive for investors seeking stable returns.
Primarily, the increasing need for organized warehousing space is a significant driver, aligning with changing consumer preferences and the burgeoning growth of e-commerce and online retail. The adoption of advanced technologies and the transformation of supply chain dynamics further contribute to this demand.
The formidable pace at which the warehousing industry is developing would not have been possible without the government's support. Initiatives like 'Make in India', ‘Gati Shakti’ and 'Atmanirbhar Bharat,' as well as the development of industrial corridors have significantly contributed to the robust growth of the warehousing sector.
In addition to industry-driven factors, government initiatives like the National Logistics Policy, coupled with measures announced in the Union Budget 2023, have the potential to significantly boost the logistics and warehousing sector in India. These initiatives are anticipated to usher in positive changes, create new opportunities, and improve the overall operating environment.
We commend the government's proactive approach in implementing business-friendly reforms, enhancing connectivity through initiatives like the Dedicated Freight Corridor, National Logistics Policy, and providing incentives to encourage the establishment of warehousing and logistics facilities in strategic locations. We firmly believe that ongoing collaboration between the government and industry stakeholders is vital to address challenges related to infrastructure, land availability, and policy frameworks.
Staying ahead of the curve
At TVS, we invest in modern warehousing infrastructure designed to enhance storage capacity, operational efficiency, and cost-effectiveness. Our built-to-suit warehouses ensure that our facilities cater precisely to the unique needs of our customers. Over the years, we have also assisted clients in executing customized floor designs and production setup, and have served as a technical partner to facilitate seamless initiation of their operations.
In this evolving landscape, TVS stands out with a diverse customer portfolio wherein manufacturing holds a prominent share of our business at 38%, auto and auto ancillary follow closely at 27%, e-commerce constitutes 22%, third party logistics (3PL) and Fast-Moving Consumer Goods/Durables (FMCG/D) complete the spectrum at 6, and 5 %, respectively.
TVS ILP has been working closely with clients to stay ahead of the curve and build Grade-A compliant automated facilities that meet their functional needs. We are also helping them upgrade their operations sustainably by offering solar panel installations, rainwater harvesting, and waste management systems. For one of our plants in Hosur, we have done an interesting warehouse automation that has helped in optimizing a key operation for the brand.
TVS network of warehouses
Our upcoming warehouse projects are currently located in cities like Coimbatore, Madurai, Chennai, Vijayawada, Cuttack, Kolkata, Siliguri, and Guwahati. We have plans to expand our network up to 30 cities. We have set a target of achieving a platform of 20 million square feet platform in various cities within the next couple of years. This expansion strategy is not confined to specific regions; rather, it embraces a location-agnostic approach to maximize effectiveness and efficiency. This strategy ensures proximity to client operations, reducing transportation costs, and enhancing overall supply chain performance.
In terms of new projects, we have recently announced our groundbreaking project in Vijayawada, Andhra Pradesh. We are also gearing up to announce further expansion plans in Tier 2 & 3 cities to serve our clients better. We plan to have a facility in every 400 kilometres to form a robust warehousing chain from Vizag to Cuttack, covering Kolkata, Siliguri, and Guwahati, with further plans to expand into the northern hinterland of India. As we look ahead, we envision doubling our warehousing portfolio and quadrupling our presence in Indian cities.
- LIFTING & SPECIALIZED TRANSPORT, NOVEMBER – DECEMBER 2023
Grade A Warehousing in Tier 2 & 3 Cities Fuelling India's Logistics Sector
The Indian warehousing market is seeing increasing demand with 3PL and e-commerce players being the major occupiers in tier-2 and 3 cities. Factors like the boom in e-commerce, outsourcing to logistics
CJ Darcl revolutionizing logistics & warehousing with cutting-edge solutions
As India's economy grows, there's a continuous demand for warehousing, especially in Grade A and B categories, fuelled by sectors like electronics, retail, FMCG, and manufacturing and these industries
NDR Warehousing's network spans 21+ Industrial Parks across India
The growing demand for tech-enabled operations and the widespread adoption of cutting-edge technology have rendered Grade A warehouses highly agile, enabling them to effectively adapt to the ever-evolving
Welspun One tailored Grade-A warehouses elevating industry expectations
The surge in warehousing demand in recent times is largely attributed to the pivotal role played by Tier-2 and Tier-3 cities, fueled by extensive digital penetration, transforming them into significant
LP Logiscience's integrated warehousing systems redefine efficiency
A multitude of factors like allowing 100% FDI in warehousing and increased adoption of technology have contributed to the growth of the modern warehouse segment in tier 2 and tier 3 markets, including the post-pandemic
Rhenus transforming logistics with end-to-end solutions & real-time visibility
The success of emerging Grade A warehouses in select Tier 2 and 3 cities hinges on the yet-to-be-determined market potential of these regions for the specific products requiring warehousing
Outlook to remain stable for Indian road logistics: ICRA
The road logistics sector will do well in the year 2024, supported by stable domestic consumption and investment demand. According to rating agency ICRA, the industry’s revenue growth is estimated to be in the range
Value Spaces driving logistics forward
The rise of e-commerce has led to a surge in demand for efficient and well-equipped Grade A warehouses to manage the storage and distribution of goods. Naresh Sharma, Managing Director, Value Spaces Logistics
Safexpress elevating logistics excellence with comprehensive solutions
The fast-emerging warehousing clusters have witnessed substantial growth due to the increase in road, rail, and air connectivity, making it feasible to establish warehouses in these locations.
TCI catering to diverse industry verticals
There is rising demand from both the consumer and the business side of supply chains logistics, hence, opportunities for expanding warehouses are lucrative but they come at the cost of upfront investment
eTrans: Driving Safety, Efficiency & Productivity in Logistics
Our customer-centric approach helps us understand the needs and challenges of our customers, allowing us to tailor our solutions to meet their requirement for improved security and productivity
Prozo Offering Multi-Channel & End-to-End Solutions
Our end-to-end supply chain solutions enable fast-fulfilment for B2B, B2C and D2C supply chains and our service lines PFN, PLN, PWLP and PRN ensure that brands have access to the most comprehensive
Smart Tech Enabling Green and Efficient Cold Supply Chain
The adoption of smart technology in temperature-controlled storage and transportation is not only revolutionizing how we manage perishable goods but also offers the promise of a greener and more efficient
Solutions for Cleaner and Greener Supply Chains
Firms that are implementing sustainable logistics methods are in a better position to meet customer demand for environmentally responsible products and services, increase customer loyalty, save costs
Modernizing the Maritime Industry Through Automation
Automation and Artificial Intelligence in the maritime industry is helping companies streamline shipping processes and enhance operational efficiency
Goldhofer impresses at NordBau 2023
Goldhofer and co-exhibitor Volvo Trucks certainly crowds with their first combined presence at NordBau 2023 in Neumünster, Germany. A four-axle »TRAILSTAR« trailer and a three-axle »STEPSTAR« with two pairs
Bruhat Logistics India moves Voyage Chartered Vessel from Vietnam to India
Bruhat Logistics India has recently moved a breakbulk shipment of cranes from Vietnam to India. The cargo consisted of two Crawler Cranes which were dismantled and moved on a breakbulk vessel
Challenges & Opportunities in India’s Container Market
The container industry serves as the backbone of international trade, ensuring smooth and efficient flow of goods across borders. Inland Container Depots (ICDs) and Container Freight Stations (CFS) are vital hubs in the logistics chain, enhancing efficiency
Container xChange - Streamlining Logistics
With the increasing desire for access to a wider range of products across the globe, industries are required to obtain materials and goods from diverse regions. This consumer behaviour has created a need for efficient and cost-effective shipping solutions