Walmart on hunt for storage biz partners?

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Walmart is in talks with an Indian company to set up warehouses and cold chains . With retail expected to grow at 12%, the logistics industry will see Rs 5,000 crore of investment in the next three years, reports CNBC-TV18.

 

India will spend approximately 11% of its GDP or about Rs 5,00,000 crore on logistics and related services by 2010. According to a Goldman Sachs study, a lion's share of the investment will be made by three key sectors - FMCG , consumer durables and retail. Almost Rs 5,000 crore will be pumped into setting up the logistics infrastructure for these growth drivers in the next three years.

 

The largest warehouse in the country was recently launched by Indo Arya , one of India's leading logistics company. It will soon offer a cold warehouse facility too. Indo Arya is in talks with some top retailers, including Walmart and Tesco to construct and operate warehouse facilities for them.

 

"We are already in talks with Walmart, Aditya Birla Retail and we are talking to Tesco on a very primary stage, as of now. We are trying to take it forward with them," said Yogesh Arya, Director, Indo Arya.

 

Indo Arya is also in talks with Reliance Retail for repackaging of its staple food. It is already doing so for Reliance in Hyderabad and is hoping to duplicate it in other cities like Delhi and Jaipur .

 

Cold warehousing currently makes up only 3-4% of the industry, but with retailers going big on fruits and vegetables, the demand for cold chains is set to increase. Currently, the logistics industry is seeing 15% growth and with a few foreign logistics providers looking at getting into JVs with Indian companies, this sector is expected to grow faster than the retail sector.

 

Newer businesses are also likely to come up. Some logistical companies are open to setting up exclusive warehouses and service center for retail players.