Project report for Warehouse

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India has become self-sufficient in food grains. Also achieved remarkable growth in the production of pulses, oilseeds, and fibers to meet the requirements of the country. Although our farming community toiled hard, the small and marginal segment of farmers could not get the real benefit of the growth in the economy. The reason is due to either non-availability of adequate storage infrastructure within the vicinity of production areas, poor access to the godowns. This situation has forced them to dispose of the product at the farm gate at a price determined by the middlemen/merchants/commission agents.

 Only a handful of influential farmers who have the infrastructure to overcome the market fluctuations could derive the benefits. Further, the small and marginal farmers, who generally remain outside the purview of formal financing institutions depend heavily on the borrowed money from money lenders for agricultural operations. Not only the borrowings are at an unreasonably high rate of interest but they are forced to sell their produce immediately after the harvest at a very low rate. Thus, the farmers lose heavily on their investments. This vicious cycle is recurring year after year making the farmers poorer. 

The creation of small storage facilities, through the construction of grain godowns, having a capacity ranging from 50 MT to 250 MTin villages may be a remedy for the farmers, who not only can store their produce, but also provide storage space for rentals. To such farmers who store their produce for rents should have access to pledge loans against warehouse receipts from financial institutions.

Market potential & Strategy

The demand drivers considered for the warehousing market are the manufacturing and consumption sectors. The manufacturing sector-led demand comprises the requirements arising from the need for the storage of raw materials and finished products from industries such as automobiles, cement, and food processing, among others. In terms of consumption-led demand, all product categories, ranging from apparel and footwear to home and lifestyle, have been considered. 

The Indian logistics industry was estimated to be approximately $160 bn in FY17. The key segments include road, rail, coastal, warehousing, cold chain and container freight stations, and inland container depots (CFS/ ICD). The domestic logistics market is expected to grow at a CAGR of approximately 10%. The Indian logistics market is expected to be driven by the growth in the manufacturing, retail, FMCG, and e-commerce sectors. Development of logistics-related infrastructures such as dedicated freight corridors, logistics parks, free trade warehousing zones, and container freight stations are expected to improve efficiency. The industry is dominated by transportation, which accounts for over85%of total value, and its share is expected to remain high over the next few years. 

The sector employs more than 22 million people. Improving the logistics sector has a significant bearing on exports and media sources estimate that an increase in indirect logistics cost could potentially increase 5-8% of exports.

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