Snowman Logistics, the largest cold chain logistics player, has created infrastructure with varying temperatures to serve various products and customer segments, such as ice creams, chocolates, fruits, poultry, quick service restaurants and pharmaceuticals. The temperature zones are 0-5, 8-10, 14-8, 0 to (- 20) degrees, Ravi Kannan, the company's CEO, told BusinessLine in an interview. The company, which has Unilever and Baskin Robbins among its customers, says it has been seeing demand for products through the year after this move, which insulates the firm's business from seasonal variations. Edited excerpts: 

Has the company's business seen a seasonal impact after offering temperature variant infrastructure?

There is not much of a seasonal impact so far. Ice creams, chocolates or seafood are in demand throughout the year. Also, thanks to aquaculture, seafood, such as shrimps, are produced 11 months a year in Gujarat, Maharashtra, Kolkata and Visakhapatnam.  

Also, despite a slight dip in summers, poultry has become a year-round business, as suppliers such as Godrej, Venky’s and Suguna serve many quick service restaurants, such as KFC and Pizza Hut, who are our customers. We cater to over 90 per cent of seafood exports in the country and all our warehouses are approved by the European Union.

Buffalo meat is another business segment for us, as India is its largest exporter. We pack the meat in containers and export them.

How does the company use technology to improve business?

We use complete enterprise resource planning-based tracking solutions and function on a first expiry-first out model, which means products that are likely to expire first are moved to the market faster. We also share data with customers regarding slow-moving and fast-moving items from warehouses. This allows our customers to come with discount schemes for slow-moving items.

Chocolates, such as Kraft (Snowman does pan-India service) and Mars (inventory management), are stored at 6-8 degrees.

Subway, KFC, Goli Vada Pav are the other quick service restaurants that Snowman Logistics counts as its customers.

What is the duration of the contracts with your customers?

We have annual logistics contracts that are renewed every April, at the start of financial year. The market dynamics in terms of demand and supply change sharply, which is why we prefer to have annual contracts.

Can you share the company's present infrastructure?

We have 25 warehouses. It also placed orders for 150 trucks last year, taking the total fleet to 500 trucks. Most of the trucks will be operated on a leased basis. We have a good mix of trucks though most of these are 12.5-tonne category.

What are the key growth drivers for the company?

The company has started increasing its focus on the pharma sector now and has Novartis, Indian Immunologicals and Ranbaxy among its customers. To start with, pharmaceuticals and food products cannot be kept together. We have now built separate warehouses with separate chambers and entry points.    

We are seeing bigger demand from pharma firms after the company shifted from refrigeration-based storage to more specialised storage, particularly with companies that fall under the USFDA’s scanner.

Another high-value storage item is X-ray films used for medical imaging. Fuji Films is our customer.

Snowman also has Michelin as a customer, and stores a raw material used to manufacture tyres.

What is the impact of fuel price variations on your business?

Fuel price movements have a big impact on our business, with grid power accounting for 18 per cent of our operational cost. So, about two years ago, we have made power a pass-through cost for our customers. In a month, if there are power outages for over 24-48 hours, we ask our customers to bear the extra cost.  

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