French logistics major FM logistic has decided to up the ante in the Indian market with a fresh investment commitment of $150 million. The company had entered in the country three years back after acquiring Pune-based Spear Logistics. India is the third country in Asia (after China and Vietnam) where FM Logistic is keen to expand its wings. Jean Christophe Machet, Global CEO, FM Logistic speaks in an exclusive conversation with Ritwik Sinha explaining the company’s growth plan in India…
About three years back, you entered in India by acquiring Pune-based Spear Logistics. How has been the journey so far?
We started our business in India with Spear Logistics’ acquisition as we wanted to have a sound footprint in this country. And post-GST, we decided to introduce new style of services particularly to offer large, multi-customer sites to respond to the market demand of less number of small DCs and bring more professionalism. In the period since we started, we have also added transportation vertical to our Indian portfolio to offer end-to-end services to our customers. We see fantastic opportunity in this country going ahead.
Tell me about your transportation model. You are tying up with local vendors?
Our transportation vertical primarily has two types of solutions. For primary transportation, we are using large size trucks for factories to ports and vice-versa shipment requirements. For distribution within the country – especially from one warehouse to another in the value chain – we are using various types of trucks. We have an asset light approach on this front and we have tied up with good quality suppliers after evaluating them on certain standard parameters. . Everyday, we are managing more than 500 trucks. We are using advanced technologies like Transport Management System (TMS) and also have control tower to ensure that everything happens within the given deadline.
Let me get a sense of the warehousing strength that you have picked up.
Our warehousing strength nearly totals 4.5 million square feet in the country as of today. They are spread across 30 locations and comprise 90 units.
Three years back you had committed investing 50 million euro in India. And now you are talking of $150 million investment in the next five years. So this new commitment, is it over and above your earlier investment plan?
In the last three years, we have already invested about 30 million euro. And now we want to expedite our capex efforts by investing another $150 million in the next five years. This is clearly an additional investment.
Where specifically you will be using this investment corpus?
From investment perspective, there would be broadly two major focus areas. Firstly, we want to have a network of multi-customer facilities. We will buy more land to develop those sites. A significant part of this corpus will be used in the development of these large units. And then we will also be investing in development and adoption of state-of-the-art technological solutions. TMS and WMS will be deployed across our operational value chain for efficient operations and delivery to our customers. Just to cite an example, we will provide dashboards to all our customers to keep a tab on the vehicle movement and the basic inventory level.
Where all you will be putting up these facilities?
In the next five years, we plan to build large sized multi customer facilities close to the leading Indian metros. We already have one such unit in Bhiwandi, Mumbai and starting another one in Gurgaon next month. We are looking at another site close to Delhi (in Jhajjar) which would be our own and will have 7,00,000 square feet space. Bangalore and other metros will be other key locations where we would like to strongly position FM Logistics in the next five years.