$10-m facility near Chennai likely to be operational by Nov.

Chennai: DHL Global Forwarding, the freight forwarding division of leading global logistics player DHL, will invest $10 million (around Rs 47 crore) in India's first free-trade warehousing zone at Sriperumbudur.

Construction will commence this week and the facility will be operational by November, according to a company official.

DHL Global Forwarding will operate the new facility within the Free Trade Warehousing Zone that offers customers the benefits of duty free zone with ‘high quality infrastructure,' according to Mr Amadou Diallo, Chief Executive Officer, South Asia Pacific, DHL Global Forwarding.

India investments

DHL Forwarding has so far invested around €300 million in India. In 2009, it handled 1.22 lakh tonnes of air shipment and 55,000 TEUs (twenty foot equivalent units) of ocean freight.

It has around 15,000 customers in India, and some of them are located within the vicinity of the new facility, Mr Diallo said without naming the clients. DHL is part of the Deutsche Post DHL. The group generated revenue of over €46 billion in 2009.

The total logistics market in India earned revenue of $75.19 billion in 2009, representing 6.2 per cent of the country's GDP.

The market is expected to touch $120 billion in 2014, a 9.9 per cent CAGR between 2009 and 2014, the company said quoting a recent report on Strategic Analysis of Indian Logistics Market by Frost & Sullivan.

“We are well positioned to capitalise on this fast growing market and strengthen our market leading position in India. China and India are the two key markets for us,” he said.

One-stop shop

The new facility will be a one-stop-shop for all of logistics requirement of customers. DHL has such a facility in Singapore and Jebel Ali – both used by customers for inbound and outbound logistics requirements, he told newspersons.

Located along NH 4 main freight and industrial axis, the new facility will have both covered and open warehousing and offers services like ‘speedy delivery of cargo' – a one-stop for Customs clearance capability; integrated solutions – packing management, sorting, inspection, re-invoicing, strapping, kitting, assembly of complete and semi knocked down kits and taxation benefits, he said.

First phase

In the first phase, out of the 2.6 lakh-sq-ft plot area, the built up area will be 1.30 lakh (ground + 7 high rise racking,); 25,000 sq. ft open storage facilities and 10,000 sq ft to provide for special value added services, said Mr Christoph Remund, CEO, DHL Lemuir Logistics Ltd, a group company. There is a provision to double the capacity in the next couple of years, he said.

There are seven industrial clusters within 30-km radius. Also, the Sriperumbudur region has India's largest telecom cluster and two of the largest auto clusters at close proximity. It is among the top three industrial and wholesale trading zones, he said.

Consolidation hub

Clients can use the facility as a consolidation hub.

For instance, commodities imported can be consolidated and stocked duty-free until required. Also goods from different locations can be consolidated for exporting.

This reduces logistics cost and the time consumed in processing individual export entries, he said.