Sunday, January 24, 2021

Interaction- Aditya Virwani, COO, EMBASSY Group

We embrace technology and believe that it is a game changer for businesses

 

Embassy Industrial Parks (EIPL) was formed to address the challenges of companies grappling with the building and management of industrial and warehousing companies in India as it is a large, diverse and geographically distributed market. Embassy is committed to bringing quality Grade A, industrial, light manufacturing and warehousing spaces in close proximity to leading consumer and industrial centers across India. EIPL made history by being the first-ever recipient of the World’s Greatest Brands & Leaders 2017-18 Asia GCC Award for the Logistics sector. In an exclusive interview ADITYA VIRWANI, COO, EMBASSY GROUP speaks to CONSTRUCTION OPPORTUNITIES about the latest trends in the Indian Warehousing sector, impact of Covid-19,innovations leveraged in the facilities, challenges involved and the future outlook on the industry.

 

 

Briefly give us an overview of the Indian Warehousing sector, latest trends and sector challenges.

 

The warehousing segment has taken a promising turn in 2020. The growth in e-commerce and logistics in the country has helped the sector evolve like never before.

A report released by Knight Frank states that India’s warehousing industry will be championed by the ecommerce companies as they have begun to create an expedite demand for storage, especially for the FMCG goods that will help them keep their head above the water. The report also suggests that ecommerce companies will also aid in advanced warehouse infrastructure with technological enhancements in times to come.

Indian government, with the implementation of GST in 2017, accelerated the growth of third party logistics that offer expert services for storage and distribution of goods. This further led to an increased demand for 3PL share of space in more than 8 metro cities and the growth is predicted to be steady at 36% in the Financial Year 2020.

Although, initially the pandemic posed a threat to businesses, it also paved a way for them to maneuver around it. It pushed the industries to expand their bandwidth within the online marketplace and utilize e-commerce as the mode of trade. The customers too relied on ecommerce for purchase and it continues to be the trend in 2020.

 

This transformation implies that there is a high scope of demand for warehouses within the metro cities with high population density as they have significantly shrunk the delivery time. In the long term, the growth of grade A warehouses will witness a growth spurt in Tier 2 and Tier 3 cities simultaneously with the gradual penetration of e-commerce within Tier 2 and 3 spaces.

 

 

What has been the impact of Covid-19 on the performance of your company and what are your strategies to overcome these sluggish market conditions and expand market share.

The pandemic has helped businesses rethink their decisions and investments. At Embassy Industrial parks, we have been ahead of other players in analysing a new way forward and a quick adoption of the new normal.

Warehousing was one of our key focus areas and we continue to strategize for its further expansion. Our legacy and business relationships have witnessed a stronger affirmation for growth and we continue to deliver value to our clients.

 

For better employee engagement and safety we had the following measures set in place:

  • At site or park level, we are maintaining a limited number of staff to service our tenants at the same time to also ensure business continuity for longer term.
  • We regularly communicated with the tenants/ warehouse operator on the movement of people and goods to ensure hassle free operations within the parks.
  • We worked closely with the government and kept track of various orders being issued from time to time with respect to people and goods.
  • On site, staff and non-staff members were strictly instructed to comply with COVID 19 guidelines issued by authorities from time to time.
  • Documentation of all the procedures up until the execution and other criteria were expected to be taken care by the employees working from home
  • We ensured that all workers were given sufficient breaks and rest to keep their immunity levels intact.

 

 

For efficient service, plan and execution for the client, we had a separate set of measures in place:

  • We ensured continual communication with our clients and stakeholders to ensure trust and avoid disjuncture. We were consistently in touch with the landowners, IPCs, customers, especially when lockdown was eased and people resumed work from offices. We immediately line up site visits, tenant’s meetings etc. We also kept a sharp eye on the Logistic sector as it depends on functionality. Therefore we aligned ourselves strategically even during a crisis.
  • We increased communications with the clients especially with the ones who were restarting operations post requisite government approvals.
  • We established a crisis team/protection group at the head office. We assigned teams at the regional level as a single point interface to ensure control and monitored every ongoing procedure. These teams ensured preventive actions at all operational locations. They continued to liaison with local authorities and managed information, especially against rumors such as: Indian ports as well as logistics services form a part of the essential Services Act and they are operational as of now, however companies are facing challenges on a continuous basis due to lack of clarity from many local authorities.

 

 

As part of our community service, we planned CSR activities:

We conducted CSR activities at EIP’s Bhiwandi park by distributing dry ration to the local villagers/migrant workers surrounding the province.

Another CSR Activity conducted by us was at a Govt School near Hosur Park. We distributed hygiene kits to more than 200 kids.

 

 

Briefly tell us about the role played by your company in the warehousing /logistics space and the services offered? Tell us of the warehousing and logistics capacities of your firm, geographies, investments?

Embassy Industrial Parks is one of the largest players in the warehousing space today. We have our facilities in around 7 locations in the country-7 key cities – Ahmedabad, Bangalore, Chennai, Delhi NCR, Kolkata, Mumbai and Pune. Our strategic interventions have helped us create a benchmark in nor only South, but also North India.

Our Bilaspur warehousing project is based on an investment of `250-300 crore and Hosur of about `280 crores. We help international and multinational clients with specific mandates to search for land in predefined areas, acquire land on their behalf and then proceed to develop a complete campus or a “build to suit” facility.

 

We service clients from E-commerce giants to Automobile and Auto ancillary manufacturers, Aeronautics Components makers, 3PLs etc. We aim to build 35 million sq. ft. of industrial and warehousing space over the next five years across India.

 

 

Elaborate on the modern technologies and innovations leveraged in your facilities and USP’s vis-à-vis competition.

 

We embrace technology and believe that it is a game changer for businesses. The pandemic has pushed companies to adopt technologies that can help in business continuity. The digital evolution in 2020 has been like never before.

According to a report, big data, machine learning and new product identification technologies have changed how logistics and warehousing industries operate. Interlinked systems that provide us with real time data have largely contributed in reducing costs and increasing efficiency. Due to which, the industry has seen a significant improvement in productivity. Automation on the other hand has replaced labor intensive unproductive chores, aiding in labor efficiency within the industry.

Automation, although a huge investment, is seen as a fruitful addition to larger corporates who aim to consolidate their activities under one roof. Thus, private entities are heavily investing on 3PL players who are much more cost effective, as in comparison to coping everything on their own.

Owing to the digital transformation in the industry, two of our e-commerce clients at various locations are in the process of automation through technology i.e. robots for rack movement, infra- red sensing of racks etc. This has been possible due to the customised options we stick to while developing an infrastructure and our exceptional dedicated services. Moreover, EIP is a proud host of special amenities such as ample truck parking spaces, Driver rest areas, business centers etc. We ensure that each park becomes a self-sustaining business environment as we are environmentally conscious &complaint with IGBC norms.

 

What are the challenges that come your way in developing warehousing infrastructure?

There are certain constraints with respect to Land laws in our country. Buying a large piece of land poses a challenge due to the multitudes of govt procedures and law enforcements. The buying process too gets tedious and expensive. Also, the next most difficult task that we are mounted upon is the adaptation of solar roofing. We are optimistic that the Government will introduce new policies that could aid faster growth in the segment.

 

Key learning’s from your experience and how they can be applied to the forthcoming Projects?

We believe in constant learning and development. We have been one of the early birds in our category and that gave us an opportunity to experiment and innovate. This also led us to learning from our own mistakes and evolving continuously.

Our team of experts and best practices have kept us ahead of our competitors and this gives us an edge over others in the industry. Our core has been about delivering value to our customers and we believe in nothing less than the best when we say Grade A. We are in a journey of excellence and our growing number of customers give us an assurity of success.

 

 

What are the key differences between warehousing infrastructure in other countries and India?

Warehousing businesses in other countries is an established concept. They have advanced and highly automated structures in place. Their infrastructural advancements are much more sophisticated when compared to the ones in India. They have explored the heights of modernization in the areas of material handling, loading and unloading of goods with equipment that are yet to reach Indian domains.

 

Although Indian warehousing businesses have seen an uptick in recent years, technology is yet to pick its pace. It still is at its nascent stage, but due to pandemic, the business has seen a huge improvement. We are sure to see an evolved industry in less than 5 years.

 

What are the drivers for warehousing/logistics business and how do you see business through 2020 and onwards

We have seen the warehousing sector evolve in the last few years. There are a few aspects catalysing this growth-

 

  • Digital sharing will see a rapid growth in 2020: Until now, we have seen a linear logic in businesses, where manufacturers manufactured, distributors distributed, and customers bought products. But now, there has been a paradigm shift in businesses as a new breed of companies sit on top of the supply chain - The Ecommerce. The mobile user interface connects everyone under one roof- the manufacturer, the distributer and the customer. This drives a significant shift in value and this shared economy is a novel concept for logistics and warehouse businesses. However, this will be the norm and assets, expenses and manpower will be shared from now on.
  • Omni channel supply chain is the current demand: Omni channel supply simply means complete visibility across the supply channels. This demand has turned retailers and manufacturers into becoming more responsive and agile. The need of the hour is to integrate both offline and online businesses seamlessly with a single interface and to cater to the full range of product offerings to the consumers.
  • Cross docking will be practiced to reduce costs: Although this cross docking was practiced only for consumer durable goods, decreased costs in handling goods and turnaround time has made docking a viable option for everything, from perishable goods to high security/ value goods. It is cost effective and efficient today and many businesses are recognizing this integration of transport strategies to minimize costs.
  • Multi-modal logistics will be proposed on a national level: This model simply indicates the utilization of rail, road, air and waterways (both inland and sea) to transport goods from manufacturing units to consumptions clusters, thereby augmenting the logistics process within economies. Multi-modal logistics parks have been a successful model the world over and India is headed in the same direction as well. Indian government has proposed to build 35 logistics parks across the country of which 6 are to be made in the Phase 1 of the project. The 6 locations are - Delhi, Chennai, Bangalore, Vijaywada, Surat, and Hyderabad. These will be joint ventures between the central government, relevant state government, infrastructure agency and investment partner that will provide services such as freight aggregation and distribution, storage and most importantly multi-modal transportation facilities.

 

 

Which are the promising regions for warehousing infrastructure development and what are your company’s plans to tap these opportunities.

We see a huge potential in areas like Pune, Farrukhnagar, Bilaspur - Delhi NCR, Bangalore, Chennai and Hyderabad. We have one fully operational park and another ongoing project in Bilaspur, Gurugram and Hosur, Tamil Nadu.

Embassy Industrial Park announced phase 2 warehousing project at Bilaspur. We have invested close to 250-300 crores on this project that is spread across 40 acres of land and is estimated to be approximately 1 million sq. ft. It is strategically located in the midst of National Highway 48 and within a mere 3 to 4 km proximity to Western Peripheral Expressway (KMP Expressway). This location deems to be ideal with its fitting connectivity and infrastructure. It caters to all the leading ecommerce, retail and FMCG, and logistics businesses of that region. The addition of this project will add approximately one million sq. ft warehousing stock to the micro market that Bilaspur is.

Our Hosur facility is spread across 1.3 million sq.ft and the invested amount on this project would be around `280 crores. Hosur is strategically located alongside the industrial corridor between Bangalore and Chennai and is barely 60 km from the city centre. The town is witnessing an upward movement owing to the upcoming manufacturing hubs of technology giants in the country. This makes it an ideal choice for us to invest in the project.

 

 

Future outlook on the industry and from a company perspective?

The industry is set to grow and EIP being one of the leaders, will create a new benchmark for the industry. Our commitment to grow exponentially and strategically leverage on the opportunities, will drive this growth for us. The industry will reshape itself as per the transformations in policies, industrial developments and technological shifts. It will be interesting to see the new normal for businesses and we are encouraged to be a part of this change that the industry would be experiencing.




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