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Future Supply Chain Solutions Ltd (FSC), India’s first fully-integrated and IT-enabled supply chain and logistics company, will invest Rs 200 crore in setting up new, cold and dry warehouses across India in the next two years.
The company from the Kishore Biyani-led Future Group, which launched integrated cold chain services in Gujarat with the takeover of the Delhi-headquartered Brattle Foods Pvt Ltd, and its subsidiary Laxman Logistics Pvt Ltd, is all set to expand both organically and inorganically to seamlessly integrate its business with the likelihood of the implementation of the Goods and Services Tax (GST) in 2016, said Anshuman Singh, Managing Director and CEO, FSC, here on Wednesday.
The company, in which Hong Kong-based private equity Fung Capital owns 26 per cent stake, could also hit the capital market this year to raise money, he said.
FSC currently has a total capacity of 22,000 pallet positions in cold chain storage across India, making it the second largest company in this sector. In the next two years, it would invest Rs 100 crore to increase this capacity by another 40,000 pallet positions across nine cities having maximum consumption levels: Mumbai, Delhi, Bengaluru, Chennai, Kolkata, Hyderabad, Nagpur, Surat and Pune. In the next phase, it would further expand to 11 Tier I and II cities.
At present, FSC’s cold chain facilities are operational in Delhi, Kashipur, Mehsana, Mumbai, Chennai, Bengaluru and Tumkur. The company plans to build further capacities in Delhi, Mumbai and Hyderabad, Singh said.
The company will also invest another Rs 100 crore in the next two years to set up more dry warehouses to increase built up capacities from the current 55 lakh square feet to 80 lakh sq ft at its 30 large dry warehouses. Funding for this Rs 200-crore investment will come mainly from internal accruals and debt and equity.
The Mehsana facility, acquired through a “structured deal” recently, has a capacity of 17,000 pallet positions with warehouses providing storage capacity to freeze at temperatures from minus 17 to minus 28 degrees Celsius. Its existing customers, including McCain and Vadilal, will continue to use cold storage facilities.
Sixty per cent of Future Supply Chain’s business now comes from outside the Future Group, which is expected to increase to 70 per cent this year, what with frozen items’ business growing at over 25 per cent annually.
He said cold supply chain logistics also has great potential in India as the country has only 8,000 cold storage trucks vis-à-vis 20 lakh dry storage trucks.
Founded in 2007, FSL recently tied up with Snapdeal as its logistic partner in e-commerce. It has made significant investments in developing GST-ready logistics parks, warehouses, transport hubs and branches to create a seamless supply network across India, Singh added.
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