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B. B. PATTNAIK, CMD, CENTRAL WAREHOUSING CORPORATION

Santanu Sanyal

The Central Warehousing Corporation (CWC) was launched as a central public sector undertaking more than half a century ago. Unlike many PSUs, it has always been a profit-making organisation, consistently paying dividends to its shareholders — the Union Government and several PSU banks and insurance companies, right from the beginning. CWC is now poised to have its role recast, from a warehousing company to a total logistics service provider. The Chairman and managing Director, Mr B. B. Pattnaik, recently discussed with Business Line the Corporation’s plans and programmes as well as the challenges ahead.

Excerpts from the interview:

How big is the CWC?

We are fairly big. CWC started its journey as early as 1957 with seven warehouses with a total capacity of 7,000 tonnes, handling mainly agri-commodities and farm input such as fertilisers. Today, we have 495 warehouses of our own with a total capacity of 10 million tonnes.

Together with 17 different State warehousing corporations, we control another 20 million tonnes of capacity.

We handle virtually all types of commodities — agri products, finished industrial goods and raw materials. But that is not all. We are set to emerge as a major logistics service provider.

What are your plans towards this end?

We now run 75 Customs-bonded warehouses where imported dutiable goods are stored on the basis of deferred payment of Customs charges.

We operate four air cargo complexes and 35 container freight stations (CFSs) and inland container depots (ICDs) across the country.

We have also floated a wholly-owned subsidiary, Central Railside Warehousing Company Ltd., to create rail-linked infrastructure in major railway goods sheds to handle both inbound and outbound railway traffic.

For this we have signed a Memorandum of Understanding with the Indian Railways, identifying 22 locations, of which 12 have already started functioning and 10 others are at various stages of implementation.

CWC also runs container trains, doesn’t it?

We are a category-1 licence holder for running container trains all over the country and, accordingly, we run on an average three trains every week each direction between Loni (near Delhi) and Jawaharlal Nehru port.

Strictly speaking, we do not have our own rakes. We have entered into a strategic alliance with B2B Innovative Logistics, which offers rakes. In 2007-08, we ran 149 trains and earned a revenue of Rs 47 crore.

This fiscal we hope to run 160 trains and earn more than Rs 50 crore. Till October 31, we ran 95 trains.

But aren’t your container train services restricted to just one route?

Yes. But we will shortly launch services between Loni and Kalamboli (Navi Mumbai) and between Loni and Korukupet (Chennai).

The Loni-Korukupet service will cater to both domestic and exim trade.

We are also planning to expand our services to the port of Pipavav in Gujarat. In Pipavav, we already have a warehouse.

But we would like to set up a rail-linked CFS there and have accordingly approached Pipavav Rail Corporation for connectivity. We are also planning to set up a CFS at Konnur, in Kerala.

Our focus is on the development of rail-linked infrastructure.

Any specific project in view?

We have 20 rail-linked base depots, comprising huge warehousing facilities, created long ago with the World Bank assistance, to meet the requirement of Food Corporation of India for 15 years.

The period is over and we are now free to use them as we like.

We are considering if we can use them for handling rail-transported containers.

The CWC also operates a land-based Customs station…

Yes. At Petrapole on the West Bengal side of the border with Bangladesh we operate a huge land Customs station.

We propose to launch a similar set-up at Dawki in Meghalaya.

The Commerce Ministry has suggested the development of a similar facility at the Atari-Wagah border with Pakistan.

Are you going ahead with that?

Setting up a new facility might take time. Till then we have decided to refurbish our present warehouse in Amritsar to cater to trade with Pakistan.

Any other plans?

We would like to enter the cold chain to handle perishables.

We are also planning to diversify into procurement of foodgrains in some States — rice in Orissa, West Bengal and Chhattisgarh, and wheat in Rajasthan, Madhya Pradesh and Uttar Pradesh, the idea being to provide a total package.

So far we were only offering warehousing facilities but now the plan is to take care of procurement, transportation, warehousing and distribution.

We have initiated dialogue with private firms for setting up food parks on a PPP (public private partnership) basis in 10 identified locations under the schemes sanctioned by the Union Ministry of Food Processing Industries.

And we also provide disinfestations and pest control services.

We extend the dis-infestation and pest control services to several key trains of the Indian Railways, several airlines and we undertake fumigation of ships and containers.

How big is the business?

In 2007-08, we did business of Rs 15 crore, likely to rise to Rs 20 crore in 2008-09.

How sound is CWC financially?

The CWC is very sound financially. It has been consistently paying dividend since 1956-57, i.e. right from the beginning. In 2007-08 we paid 30 per cent dividend on a turnover of Rs 776 crore.

Apart from the Union Government, which holds 55 per cent of CWC’s equity, the other shareholders include State Bank of India, several public sector banks and insurance companies.

In addition, about 400 co-operative societies together hold one per cent stake in our equity.

All our activities are funded from internal generation. We have no budgetary support from the government.

What is your biggest headache?

Fluctuating fortunes of the economy throw up challenges from time to time.

For example, right now, the future appears a bit uncertain. But we are not unduly worried about it. We are strong enough to weather any storm that might come.

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