H&M looks to set up its first warehousing hub in Bhiwandi

source: SnS124.com / 27-January-2017

Hennes & Mauritz (H&M) is in advanced discussions with Mumbai-based Prakhhyat Infraprojects, which operates the 150-acre K. Square Industrial Park at Bhiwandi

 At present, H&M operates a warehouse in Delhi through third-party logistics firm Geodis. 

Mumbai: Swedish clothing retail firm Hennes & Mauritz (H&M) is close to leasing around 2.75 lakh square feet of space at Bhiwandi in Maharashtra to set up its first warehousing hub in India that would be directly operated by the company, according to two people aware of the development who spoke on condition of anonymity.

The company, which entered India in 2015, is in advanced discussions with Mumbai-based Prakhhyat Infraprojects Pvt. Ltd, which operates the 150-acre K. Square Industrial Park at Bhiwandi, said one of the persons cited above.

The monthly rental has been pegged at Rs29 per sq. ft with a five-year lock-in period and the option to renew the lease for another five years, the person added.

The upcoming warehouse at Bhiwandi would be a built-to-suit facility and is expected to start operations next year, the second person cited above said.

According to property consultants, the rental is on the higher side as it comes with a premium since the warehouse would be developed as per the requirements of the company which is leasing it. The normal monthly rent particularly around Bhiwandi stands at around Rs10-15 per sq ft.

Other big companies which have warehouses in the vicinity include e-commerce firms Flipkart, Amazon and logistics firm DHL Express. “H&M has been wanting to come up with a better warehouse of its own,” the person said.

At present, the company operates a warehouse in Delhi through third-party logistics firm Geodis.

A spokesperson with H&M declined to comment on the development while Prakhhyat Infraprojects did not respond to emailed queries .

The deal is part of the larger trend where most manufacturing firms and retailers are already on the look-out for bigger warehousing spaces in the country given that good and services tax (GST) is expected to be rolled out soon. The demand is only likely to grow after GST as a unified tax structure makes bigger warehouses economically viable, said consultants.

Present across 62 countries, H&M is the world’s second largest apparel retail chain after Spanish clothing company Inditex, the parent firm of Zara.

“H&M has been aggressively looking for a lot of retail spaces across all regions of India. Considering that all the floor sizes are large , they would sure have big warehousing requirements as well. The overall warehousing requirement from retailers is high and most firms are aggressively looking at certain belts in India because of the upcoming goods and services tax (GST),” said Aditya Sachdeva, director (retail) at Knight Frank, a property consultant.

As per Knight Frank estimates, the total requirement of warehousing space in the country’s top seven markets is expected to grow from 621 million sq. ft in 2016 to 839 million sq. ft by 2020.

At present, the demand for warehouses is driven by the manufacturing sector, followed by brick and mortar retailers and e-commerce firms.

IFC plans to invest US$ 10 mn in Zinka Logistics

Source: SnS124.com 27-January-2017 

Chennai: International Finance Corporation (IFC) is planning to invest around $10 million as equity in Bengaluru-based Zinka Logistics Pvt Ltd (Blackbuck), a technology platform for long-haul trucking. The company’s existing investors include Accel Partners, Tiger Global, Apoletto and Flipkart Logistics.

IFC’s proposed investment will be in the form of equity for a minority stake to support the expansion of the company’s service offerings and further technology development. The company will use IFC’s funding to expand it’s service offerings and further technology development, said IFC.

The company was founded by Rajesh Yabaji, Chanakya Hridaya and Bala Ramasubramania in April 2015 and launched in July 2016. Blackbuck is a leading technology platform in India for long-haul trucking.Blackbuck connects large and small shippers with small truck owner/operators to book full-truck-load (FTL) freight for inter-city transportation through its mobile app interface.

IFC said Blackbuck is helping to bring transparency and efficiency to this market through its technology platform.

This allows transporters, truck owners, and enterprise clients to more efficiently locate, price, transport freight and reduce greenhouse gas emissions.

The Company is asset-light and by matching truckers with shippers through its online platform, it is able to minimise downtime for trucks and maximise utility of the asset for the truck owners/operators.

It is the leading load board in India with around 80,000 verified trucks on its platform and more than 100,000 transactions year-to-date (YTD). The company does not provide services for transportation of hazardous or dangerous goods.

The company has two different models including organised contracted freight – formal contracts with shippers (a number of big companies including multi-national companies) to move freight for predetermined routes at pre-negotiated price; auctions of freight just-in-time through the app marketplace and unorganised spot market freight where shippers use app to source truckers for immediate needs.

The company is also providing support in using ancillary services (like toll cards and fuel cards) to drivers with some partners like non-banking finance company and petroleum retailers so that truck drivers do not need to carry a lot of cash.

The long-haul, full-truck-load (FTL) trucking market in India is currently estimated to be around $70 billion and is largely offline and informal. Trucks in India on average have 33% utilisation, meaning they are either sitting/travelling empty or partially filled a majority of the time.

India 10th largest business travel market: Report

article Source: SnS124.com / 19-Jan-2017

Mumbai: India is the world’s tenth largest business travel market and is likely to clock the fastest growth in this segment in the next five years. Business travel spending is expected to treble until 2030 from $30 billion in 2015, a report by consultancy KPMG and FCM Travel Solutions said.

“In 2015, India saw a 15% increase in business travel spending, which will grow by a compound annual growth rate (CAGR) of 12% through 2020 to 6% by 2030. This increase in all possibility will be greater than the increases in business travel growth in the next three largest countries combined, including South Korea, Italy and Brazil. Thirteen years from now (by 2030), India will likely be amongst the top five in business travel spending,” the report said.

The report attributed the growth to “political, economic and demographic factors”. It said macro-economic growth, an evolution in the regulatory environment, increased growth and expansion in industrial activity, coupled with fast digitisation of travel booking tools has and will continue to lead to the growth.

India has in a decade climbed the ranks from one of the world’s twenty largest business travel markets to be among the top ten. In the list compiled from a World Travel and Tourism Council Report, India follows China, US, Germany, Japan, UK, France, South Korea, Italy and Brazil.

List topper China’s business travel market size is $291 billion, close to ten times that of India. India is estimated to overtake Brazil, Italy and South Korea and take seventh place by 2020.

India’s business travel spend is roughly a fourth of its total annual travel expenditure as travellers still spend the bigger chunk on leisure, an executive at KPMG told ET.

About 80% of the business travel transactions are domestic, rest international, FCM managing director Rakshit Desai told ET. Revenuewise, the split is 50:50, he added. About 77% of the total spend is on air travel, the report said.