TVS unit to invest $1 billion in warehouses

The company will develop 20 million square feet of infrastructure in 20 different warehousing parks in the country in the next three to four years, says Manikandan Ramachandran, COO, TVS ILP. 
| Photo Credit: Special Arrangement

TVS Industrial & Logistics Parks (TVS ILP), the warehousing and logistics solutions business of the TVS Mobility Group, said it would have invested $1 billion in developing 20 million square feet of infrastructure in 20 different warehousing parks in the country in the next three to four years.

“We would have invested $1 billion towards developing a total of 20 million sq. ft of logistics and warehousing infrastructure across the country in the next three to four years,’‘ Manikandan Ramachandran, COO, TVS ILP told The Hindu.

TVS ILP already has 11 logistics parks in Tamil Nadu, Maharashtra, Odisha, Andhra Pradesh and Rajasthan with a cumulative space availability of 10 million sq. ft. The company currently has a 35 clients from across segments viz. FMCG, FMCD, 3PLS (third party logistics in supply chain management), CDE (Consumer Durables and Electronics), e-commerce, automotive and manufacturing.

“We are now expanding our presence in another 30 cities across the country to double our warehousing infrastructure to 20 million sq. ft. We are exploring a park in every 400 km in the country,’‘ he added.

TVS ILP is currently in the process of exploring land availability in Madurai, Vijayawada, Cuttack, Kolkata, Siliguri and Guwahati. Ideally, each of these parks would require a land parcel of 20 to 40 acre while a large independent client might require a million sq. ft of space.

“Over the next few years, the annual spend of our company will be in the range of $75 million to $85 million and we intend to be a 20-mn. sq. ft. platform with contracted revenue of $750 million by that time,’‘ Mr. Ramachandran added.

TVS ILP’s business has been witnessing a growth of 30% year-on-year and the management was also evaluating various options for future growth capital, he added.

TVS ILP’s infrastructure is leased to clients for a period of 15 years with a monthly rental of ₹20 to ₹30 per sq. ft, however if clients require additional customisation the rentals may be in the ₹40 to ₹45 per sq. ft range.

The company’s existing warehouse and logistics park in Hosur currently houses two large clients EV scooter manufacturer, Ather Energy and e-tailer, Flipkart.

According to Mr. Ramachandran, for logistics and warehousing facilities, Hosur offered a better cost advantage, some 20% cheaper compared to such infrastructure in Bengaluru or Chennai. Also, the overall operational cost, including employee salaries, was cheaper by 35% in Hosur.

In terms of the availability of logistics and transport services, he said the STRR (Satellite Town Ring Road), a 4-6 lane express highway that connects many small towns, including Anekal, would improve connectivity between Hosur and Bengaluru, in addition to improving access to Chennai Highway, and easy exit to Kerala and Mumbai via Attibele Bypass.

Hosur already had a well-developed cargo and transport system as a lot of manufacturing is already happening on five major roads viz. Hosur-Thally, Denkanikottai, Kelamangalam Rayakottai Road, NH Chennai, and Banglaore-Bagalur Road. In addition to these, Hosur also has a substantial pool of trained manpower with right expertise.

(The writer was in Hosur at the invitation of the company)