We want to turn godowns into logistic malls: Anshuman Singh

In a career spanning almost 20 years working with seven different companies and setting up 12 businesses in the retail and supply chain logistics space, he finally leverages his experience as a professional and co-founder to set up a third-party integrated logistics solutions venture, two-and-a-half years ago. Anshuman Singh, chairman and managing director, Stellar Value Chain Solutions Pvt Ltd, speaks with Ashish K Tiwari about the company’s business, overall industry scenario, new developments and future plans. Edited excerpts…

How did you manage to get Warburg Pincus to invest in the company even before it was launched?

Warburg Pincus is known for entering businesses at a very early stage and I’d just started working on launching the supply chain logistics business. We got in touch and there was a major alignment in our expectations from each other and, the deal was done in a very short period. My case was unique in the sense that the business was yet to be built. Warburg was keen on investing in a supply chain logistics business but there wasn’t a player good enough to partner with. I think, what worked in my case is the strong understanding of this space and that I wanted to build India’s largest supply chain logistics company. Accordingly, with $125 million investment from Warburg, we launched Stellar on August 4, 2017, the same day when goods and services tax (GST) bill was passed in the Rajya Sabha.

How has the venture progressed so far?

Having seen the supply chain logistics space very closely, we were very clear about what are the things that we don’t want to do. So areas like last mile delivery, full truckload and freight forwarding etc. were not part of what we wanted to do. Given my experience and understanding of the warehousing space, it became our core focus area. The idea here is to convert a godown into a logistics mall and transform the lorry system into a modern transport system. We planned to make 35 logistics parks across 21 cities in India.

And is this as per initial plan or you have made some changes to it?

As per our 2016 blueprint, we will have large and modern warehouses/ cold chain for across sectors, locations that are well-connected with trucks/ express transportation and our clientele will be 1,000 large consumer companies operating in India. So everything is going as per the original plan. In terms of industries that we will be focusing on, it will be the consumer sector, e-commerce, fashion, retail, FMCG, automotive space, pharma and healthcare, consumer durables, electronics, home and food processing. While our client list has already exceeded 1,000 of which 150 are among the top companies and we want to grow that number to 1,000.

How many warehouses do you have in the business now?

There are 10 warehouses spread across five million square feet in the top 11 Indian cities as of now. The transportation side has been built taking the inorganic route. We have acquired three businesses including Kelvin Cold Chain Logistics in 2017, followed by an express logistics company called Innovative Logistics Services in 2018 and the most recent one is Patel Roadways that was bought in April 2019. As far as the intra-city part is concerned, that has been developed internally. So all the pieces are in place now.

How much have you invested in the business? Have you achieved profitability?

Over Rs 300 crore has been invested already in the existing infrastructure and another Rs 100 crore will get invested in this year. With all this in place, we are targeting revenues of over Rs 1,000 crore by next year. And being a zero debt company, we will become profitable at profit before tax level by this year end.

On the transportation front do you see anything interesting happening in the Indian market?

We are planning to bring the trailer concept that’s very popular in other countries. What happens globally is that trailers and the horse in the front are detachable. The horse delivers a trailer and picks up another one without having to wait for unloading and loading as the other trailer is already pre-loaded. That’s not the case in the Indian market. There has been a change in this law last year, however, no company has adopted this international practice yet.

How are you going about implementing it in the Indian market?

It’s work-in-progress and at a pilot stage for now. We are in discussions with top two players in this space in India. While there will be a vendor who will invest in this detachable trailer-horse unit, we will be taking it on a long-term lease. If everything goes as per plan, we should be able to roll out this project in next three to four months. Given the significant improvement in the country’s road infrastructure, I think this concept will become very popular within 10 years.