Central Warehousing Corporation to double revenues in 2 years, plans massive capacity expansion

Public warehouse operator Central Warehousing Corporation (CWC) is planning to double its revenues in the next two years through capacity expansion in the warehousing space and a bigger play in third-party logistics (3PL) and domestic container business. The company posted annual revenues of ₹2,175 crore in FY23.

The country’s largest warehouse player by reach and land bank, CWC has about 115 lakh MT (metric tonne) capacity across warehouses in 465 locations across the country today. While 45% of the space (and revenues) are from the storage of agriculture products/food grains, the e-commerce sector accounts for another 20%. The rest is industrial products.

“We have a massive capacity expansion plan for this year and next year. We are adding about 47 lakh sq ft of capacity, which will be the double of what we have added in the last two years. This is through our own capex. We have earmarked about Rs 1000 crores for this. This will be all Grade A (industrial capacity)” says Amit Kumar Singh, Managing Director, CWC.

The corporation is also looking at adding capacity through public-private partnerships (PPP). “We have identified about 85 locations, where we will be going for modernisation, and the creation of facilities through private participation. And we are expecting the private sector to invest about Rs 1500 crore in the next two years for these PPPs, which will see the addition of about 120 lakh sq ft Grade A warehouse capacity”, Singh says.

The Corporation is also planning to create a network of cold storages, with value-added services in the PPP mode. Singh says that CWC has identified 180 locations for this purpose. These locations are either production centres or consumption centres of perishable goods as the country doesn’t have an efficient cold storage network and there is a huge loss which takes place in fruits and vegetables.

“We have done a preliminary study, and we are now going for a detailed study now. We will be providing the basic infrastructure, land, and civil structure (in all these locations). The private players who want to come in will just have to retrofit it. They invest, and they operate it for a certain number of years. It will see another Rs 800 crore to 900 crore of investment from the private sector”, Singh adds.

In addition to value-added services for agri-business, the end-to-end solutions for big players in agri, and industrial warehousing, CWC is also getting into the 3PL business. “We are also acquiring container rakes. We have already placed the orders for the rail logistics. The current business mix will change. The industrial pie (in terms of business and revenues) will increase. Demand will be coming through 3PL players, the aggregators. These are the demand drivers we are looking at in the coming years”, Singh said.

Incidentally, the government is also planning to convert CWC into a company by amending the Warehousing Corporation Act, the statute under which CWC operates at the moment. The change in legal structure is expected to empower the company’s board and provide more flexibility in its mandate to face increasing competition in the warehousing and logistics space.