The Hindu Business Line : NBHC investing Rs 5,000 cr to set up 200 warehouses

Mumbai, Oct. 16 National Bulk Handling Corporation (NBHC) plans to set up 200 warehouses across the country in the next three to five years at a cost of about Rs 5,000 crore.

NBHC is an associate of the Multi Commodity Exchange, where daily transactions are over Rs 5,000 crore.

“Each warehouse will have a capacity to store 20,000-25,000 tonnes, with facilities to provide quality testing, grading and certification, besides pest management solutions of global standards. We have set a target of owning a 5 million tonnes storage capacity,” said Mr Anil K. Choudhary, Managing Director, NBHC.

The funds for establishing the warehouses will be from internal accruals, parent and group companies. “Borrowing will be last option we will look at,” he said.

Lack of adequate warehousing and cold storages has led to wastage of nearly 35 per cent of perishable goods. NBHC now has a stocking capacity of 11 lakh tonnes, through 297 accredited franchise warehouses across the country and handles commodities with a cumulative value of Rs 22,000 crore.

Investments in storage facilities are expected to flow in. The government has cleared the Warehouse (Development and Regulation) Bill 2005 to pave the way for a regulator agency in the form of a Central Warehouse Authority (CWA) to formulate norms.

Warehouse lending

Once the CWA is in place, all warehouse receipts will become negotiable, with the lender having the final right on the pledged commodity. The move will give banks additional comfort, as their exposures would become more secure.

Currently, the corporation also sends fortnightly reports to banks on quality and price movements of the pledged goods at its warehouses. “We have made the goods in our warehouses a secured asset and banks are more comfortable lending against it. Our aim is to reduce the bankers’ risk and help them dispose of the commodity in case of default,” said Mr Choudhary.

NBHC manages collateral of about Rs 6,500 crore for 14 banks and is in advanced stage of signing up with another six banks by this month-end.

As of August 2007, NBHC has arranged lending against warehouse receipts worth Rs 1,700 crore. And, has set a Rs 5,000-crore target for end FY 2008.

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