Synopsis
“India is the place to be. The economy is firming up and showing solid transformation through growth. The second big trend that we can see is the relocation of manufacturing into India, which then actually serves the world. This requires additional warehousing and transportation capabilities,” Olivier Storch, deputy CEO, CEVA Logistics, told ET in an exclusive interaction.
CEVA Logistics, one of the largest third-party logistics (3PL) companies in the world, expects India to be among its top five revenue generating markets within the next three years, led by the market’s growth potential and the government’s policy initiatives including programmes like ‘Make in India’, said a top company executive.
“India is the place to be. The economy is firming up and showing solid transformation through growth. The second big trend that we can see is the relocation of manufacturing into India, which then actually serves the world. This requires additional warehousing and transportation capabilities,” Olivier Storch, deputy CEO, CEVA Logistics, told ET in an exclusive interaction.
According to him, the growth prospects and boost to manufacturing are two very strong traits that make the Indian market attractive and the company will bring in further investments to service the Indian market and also support the government’s ‘Make in India’ initiative.
The CMA CGM Group company recently acquired private equity major Warburg Pincus’ over 96% stake in tech-driven third-party warehouse and distribution service provider Stellar Value Chain Solutions that has 7.7 million sq ft of total logistics area across 21 key locations in India.
CEVA Logistics itself is currently present in 75 locations across 35 cities in India. It has managed nearly 111 million sq ft across 900 warehouses globally as of 2022-end.
“Over the last several years, we have had a strong and strategic merger & acquisition focus to add scale, geographic strength in important markets and new capabilities. The Stellar acquisition helps CEVA diversify our presence in India, boosting our local workforce, assets, customer roster and capabilities,” Storch said.
He believes the acquisition will boost the company’s domestic contract logistics and omni-channel fulfilment services across a wide range of industry segments. The deal strengthens CEVA’s strategy to provide customers with end-to-end supply chain solutions.
The company is betting big on India and investments to support the growth here will not be a constraint at all, Storch said, adding that international trade is changing rapidly with China plus one strategy and, as a global player, CEVA needs to be present in those markets of the future such as India.
The company is in the process of acquiring Bolloré Logistics. The acquisition was first announced in April and the CMA CGM Group signed a share purchase agreement for the same in July.
“The acquisition of Bolloré Logistics would allow CEVA to double in size and position itself among the top five global logistics companies. The integration of Bolloré Logistics will offer great complementarity with CEVA and provide a boost to our India operations too,” Storch said.
The integration with Bolloré Logistics is expected to commence in 2024. In India, CEVA is likely to focus on servicing clients across varied businesses from industrial, automotive to ecommerce and fashion.
“We are the largest logistics player servicing automotive business today, and it’s good news in India as well because we know that it’s a booming market be it the EV (electric vehicles) side or non-EV, so we will continue developing our core business of industrial and automotive, consumer, retail and ecommerce as well as new sectors for us including fashion and pharmaceuticals,” he said.
Owing to rapid growth in industrial activities and penetration of ecommerce, warehousing and logistics is emerging as one of the fastest growing real estate segments in India.
The warehousing and logistics segment of real estate, which has emerged as relatively immune to the shocks of Covid-19, is expected to gain further strength, and attract more investment in the next couple of years.
In India, a favourable regulatory environment, along with the government’s support through policy and reforms, has started to boost spending in infrastructure and in turn the overall demand for modern warehousing.
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