Central Warehousing Corporation : Warehousing for Everyone, Everywhere

An interview with Amit Kumar Singh | Managing Director | Central Warehousing Corporation

With what objective was CWC set up?

• To meet changing needs of agriculture, trade, industry and other sectors by providing scientific
• warehousing and related infrastructural and logistics services.
• To reduce losses during warehousing, handling and distribution.
• To be a major player in providing pest control services using environment friendly methods.
• To plan and diversify across the logistics value chain, through forward and backward integration in areas such as port handling, procurement and distribution, cold chain, warehousing financing,3PL, consultancy services, multi–modal transport, etc.
• To achieve global presence in the warehousing and logistics field.

What is exact role of CWC in warehousing and logistic sector?

Traditionally CWC was carrying out overall inventory control, Handling and transportation of     bulk clients predominantly from agri sector such as FCI, NAFED and MARKFED etc. In EXIM front                   CWC is delivering various roles such as CFS, ICD,     ACC, DPE as per requirement. While globalisation has created new opportunity for CWC to explore and create strong market presence in EXIM sector, growth of CWC in post pandemic era is expected to be from verticals such as e-com, procurement, 3PL services, cold storage, value addition services, rake handling and automation of operations, etc. as the logistics sector is diversifying at an ever                    faster pace. With strong warehousing presence throughout the country in place, achieving the first mile to last mile transportation capabilities would make CWC to grow steadily amid competition and CWC would be capable to ride international   waters in decades to come.

How do you view the progress of CWC since its inception?

Progress of CWC is an outcome of its ability to ride the early tide with changing market conditions by not compromising on its founding principles. A corporation which was predominantly focussing on agri based customers until globalisation era has delved into EXIM business and established strong presence in those cities which has strong EXIM potential thus acting as a tool in helping the nation to go global. In order to fully utilise its decades of technical prowess in the field of pest control, CWC started Pest control services in 2000’s and is still continuing to deliver quality pest control at affordable cost from large corporations to small households. As early as 2010, CWC had tapped into e-Commerce/Dedicated Warehousing by rightly assessing the growth potential of the sector and has diversified its portfolio in such a manner that at present 25% of CWC capacities are utilised by e-Commerce/DWT clients at the same time not compromising its warehousing space to agri based customers. CWC is also foraying into 3PL services, Automation, Cold storage, Procurement and value added services.

How is the overall scenario of warehousing sector in India?

The warehousing sector in India has come a long way from godowns to state-of-the-art                      automation mechanised warehouses. It is a fundamental part of logistics infrastructure and                        one of the key enablers in the global supply chain. Indian warehousing market is set to grow at a compound annual growth rate of 15.64 per cent to reach $34.99 billion by 2027. Against this backdrop, India is poised to significantly change the warehousing map in the decade ahead. Moreover, with the increasing adoption of technology and the government’s push for a digital economy, there is also significant potential for warehousing players to leverage data analytics, artificial intelligence and machine learning to improve operational efficiency and enhance customer experience. There are also opportunities for foreign investment as international investors look to tap into India’s growing warehousing market. The government has made it easier for foreign companies to invest in the sector by allowing 100% foreign direct investment in logistics parks and warehouses.

At present what are the challenges faced by CWC?

The main challenges for CWC currently are non-availability of land for expansion in                              potential markets, limitations of functional scope of CWC as per Warehousing Corporations Act, aging infrastructure at many locations, increased competition from private players backed by FIIs, Venture Capitalists.

What are the steps taken by CWC to tackle the challenges?

CWC has implemented WEE – Warehousing For Everyone, Everywhere module which is one stop digital solution for private warehouse owners who are willing to rent their facility to CWC. Godown owners are relieved of their burden to market their facility and the space requirement of CWC is fulfilled which is a win-win for both. CWC is in process of becoming a company from its current statutory status by amending Warehousing Corporations Act. This will allow the corporation to act as a full-fledged logistics company with a wide bouquet of services. Infrastructure up-gradation is being carried out on war footing across CWC from minor repairs to demolition and re building the facility as per market standards through own funds, PPP, DBFOT.

What are the recent activities of CWC?

CWC is in process of empanelling the transportation agencies across India which                             will act as concrete base for 3PL services capability which is next big diversification in pipeline for CWC. CWC started delivering Grade-A warehouses already in KIADB Bengaluru, Kundli (Delhi-NCR) and many other Grade-A facilities are under construction and proposal stage which                       are due to be delivered in future. CWC is also developing Cold & Controlled Atmosphere Stores, installing warehouse level primary processing facilities for agricultural produce and Rail Cargo/ Gati Shakti Cargo Terminals/Container rake train operations.

How do you see the CWC in the year 2030?

With the penetration of 4G/5G internet to remotest of the locations, the electronic devices                                 are replacing the physical infrastructures all around the world. The supply chains are getting more and more efficient and innovative year over year. Amidst the cutting edge competition, the businesses that thrive are those which solve the problems of the customer and deliver results efficiently. CWC has identified several bottlenecks in agricultural, logistics and supply chain sector such as non-availability of infrastructures catering to entire supply chain requirements of the customer from procurement to preservation/processing                                  to delivery of end product at one location, non-availability of warehousing presence in Tier-II and tier-III locations from where next big jump in logistics sector is going to be, non-availability of national level players with own assets and with lean decision making team etc. CWC is already ahead of its competitors in terms of bottle necks mentioned above by installing processing plants, procurement centres and VAS clusters in multiple locations in Karnataka, Tamilnadu, Telangana and Maharashtra. With 60% of its real estate in Tier-II and III locations and with land banks available for expansion, ALM, Multi storied warehouse to utilise Floor Area Ratio efficiently. With sufficient arrows in its quiver, CWC is expecting to triple its income and double its profits by 2030 and expects it to achieve them by aligning with govt policies in agriculture, logistics and supply chain sector etc.

What are your major thrust areas in the coming days?

In order to expand the operations within a short time and cater to storage needs of customers, CWC is hiring godowns from private owners. We are on a mission mode to hire private warehouses wherever its own capacity is not adequate and sufficient to                     meet the demand under the Asset Light Model. We have planned to monetize all the vacant space / land by FY-2025, total 62.05 Lakhs Sq. ft capacities will be created during this period. Apart from this, plan to demolish its end of economic life structures to create modern infrastructures like multi-storied warehouses, mezzanine flooring, grade A warehouse, etc. through PPP Mode are also being looked upon. Initiative has also been taken up to setup cold storages at the strategic locations through PPP mode. Even the dead parcels of the land are also being utilized for ancillary activities, office space, parking, ATMs, mobile towers and energy stations.

Comments on Government policy

Since its inception, CWC has always aligned with governmental policies thus the growth of CWC has been in tandem with national requirement. Currently the union government has unveiled PM Gatishakti National Master Plan, National Logistics Policy, Sagarmala Project etc in order to create integrated, resilient and cost-effective logistics and transportation eco system and to act as deterrent to the growth of china in Asia-Pacific by attracting the industries from china to India. CWC contributes to these initiatives through capacity building by creating infrastructures such as Logistics parks, CFS, AFS and ICD etc. On nutritional front, Honourable Prime Minister in his address on the 75th Independence day has announced supply of Fortified rice in PDS throughout the country in phased manner by 2024. CWC through its professionally trained technical manpower is efficiently storing, preserving and delivering the FRK Rice stored by FCI and state civil supplies to PDS consumption as per SoP prescribed by the ministry thus ensuring the nutritional food security of the citizens of India.

(Shilpa Bichitra | Special Edition | 2023)