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Snowman slates Rs 425 crore investment to expand warehouse, trucks infra
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Friday, 11 June, 2021, 08 : 00 AM [IST]
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Nandita Vijay, Bengaluru
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Snowman, the cold chain logistics major, has embarked on infrastructure expansion with an intent to invest Rs 425 crore over the next 3 years. This will include increasing its warehouse capacity to over 2 lakh pallets from the current 1,13,208 and 100 reefer trucks taking the total to 393.
The company garners much of its revenues from the food and beverage sector, the Covid-19 pandemic rattled the earnings from this space. Its customers in the ice cream industry, Quick Service Restaurants (QSR) space and meat and seafoods went through a lag, driven the national and global lockdowns. These expansions will be for pharma and e-commerce.
Cold chain logistics was deemed an essential service by the Ministry of Home Affairs which allowed the company to be operational throughout the lockdown period.
Covid has impacted the operations across cold chain segments. The ice cream industry was affected as their sales happen from March to July. Since the country was under lockdown during those months, it impacted their business. “This year, it has started well, but now due to lockdown in most of the major cities, we see the impact,” stated Sunil Nair, CEO, Snowman Logistics, in an email to FnB News.
“Expansion at Krishnapattanam and Chandigarh are commissioned. Our new facility at Siliguri is almost ready and expected to be functional in a few weeks. Mumbai expansion should also be within 4-5 weeks. Coimbatore construction is mid-way and may take few months. For all these expansions, we will be investing Rs.70 crore,” he added.
The QSRs were hit barring a few engaged in doorstep delivery. However, with hotels and QSRs functioning this year, there is business revival but far lower than the pre-Covid phase. “In the case of the seafood & meat processing industry, which is largely export-oriented and with international trade coming to a standstill leading to scarce container availability, affected this sector,” said Nair.
For the global e:commerce clients, the cold chain logistics major has put in place process where the agri produce is collected from the farmers and delivered to strategic hubs after it is sorted and packed. From here, its e-commerce partners deliver to homes of the company’s customers. “This was possible through people, process, and technology. In addition to managing warehouse and value-add centres, we also focus on the collection centres in remote parts of India to source fresh vegetables and fruits directly from the farmers,” he added.
The company has implemented mobile based applications, which increase visibility at warehouses. In the area of cold chain logistics it focussed on energy-intensive requirements of perishable products and reduced resource consumption. Solar panels on the rooftop of all its cold storages were installed to minimise power cost allowing adoption of renewable energy.
Delving on the dearth of capacities in the organised sector, Nair noted that transportation was the biggest challenge in cold chain logistics especially during the pandemic. There was reluctance among truck drivers to work as they were concerned about their safety. “The ones who operated encountered hurdles on the roads because of strict Covid restrictions with no access to way-side eating joints. Despite ample trucks, profitability was a challenge. Hence we envisage acute shortage of truck drivers in the near to long-term and fuel price hike stresses this business further,” he concluded.
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