Here’s How Passage of GST Bill Will Drive Material Handling Equipment Market

After Goods and Services Tax (GST) bill passed in the Parliament, the e-commerce and logistics companies will now need huge numbers of warehouses across the country, which will lead to fetch huge investment to set-up number of warehouses in the country. The demands of warehousing in the country have increased in last few years after the emergence of e-commerce business.

As we know, rising number of warehousing will require huge amount of material handling equipment for placing and carrying the goods to one place to another and avoids the damages. Therefore rising number of warehousing in the country will drive further demand of material handling products and manufacturers are likely to see better sales in coming years as more warehouses will start coming up in India.

Passage of GST Bill will now encourage e-commerce, manufacturing companies, Logistics companies to shift to advanced and big size of warehouses across the country. As government allowed 100% FDI (Foreign Direct Investment) in warehouses, would also encourage the foreign players to get into the construction of warehousing. Earlier warehousing was only limited to metro and big cities, now the demand would shift to tier-II and tier-III cities as well, which could lift the sale of popular material handling equipment like Forklift, Conveyors and other.

Property consultant JLL India’s report said, “The existing, top warehousing hubs are Delhi-NCR, Mumbai, Pune, Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad. These eight city hubs put together had a cumulative supply of organised Grade-A and Grade-B warehousing space of around 97 million sq ft in 2015 and this is expected to grow to around 116 million sq ft by the end of 2016.”

It further adds GST will result in emergence of new hubs like Belgaum, Bhubaneshwar, Coimbatore, Goa, Guwahati, Indore, Jaipur, Kolhapur, Lucknow/ Kanpur, Ludhiana, Nagpur, Patna, Raipur, Ranchi, Vapi and Vijayawada.

Last month, Amazon India has opened its biggest fulfilment centre in Sonipat, Haryana, the warehouse covers the area of 200,000 sq. ft, and this is Amazon India’s 22nd warehouse in the country. Recently Mr. Ram Vilas Paswan, Minister of Consumer Affairs, Food & public Distribution announced that Central Railside Warehouse Company (CRWC) has planned 10 new warehouses at rail heads. The more warehousing comes up in the country, the sale of material handling products will jump.

As per the media reports, Asia’s leading provider of sustainable urban solutions company, Ascendas-Singbridge Group planned to put separate fund to invest in warehousing segment in India. The company would set up Logistics Park on 50 to 100 acres of land in the vicinity of major cities. There were also reports that, Dutch pension fund manager APG and U.S based company Warburg Pincus are also planning to invest in modern warehouses in India, the investment in warehousing indicate the future requirement of equipment in India in coming years.

Due to rising number of warehousing in India, various material handling products such as Forklift, Conveyors, Stacker, Hand pallet truck, electric towing truck, Movable Dock, Crane, Shelves and other different machinery sell would jump in near future.

As per the report of CARE Ratings, the Indian logistic industry is projected to grow at a Compound Annual Growth Rate (CAGR) of 15-20% during FY16-FY20, the rapid expansion of logistics industry is directly proportional to the rise of warehousing sector.

Forklift is One of The Versatile Materials Handling Machinery

Forklift or Fork Truck is one of the most used and versatile machine in Material Handling Equipment (MHE) segment. The Forklift used to move and lift construction and goods material in short distance at a construction site, industrial units, warehousing and across the sector.

The forklift is one of the major materials handling equipment, at construction sites; it is used for carrying various construction materials across the sites. Usage of Forklift, smoothen the work at the site and help the workers to move the material like bricks, steel and other material easily. At Warehouse and industrial unit, Forklift has proved its worth for several years, it plays a key role in loading, unloading and placing the goods items at the right place and help in avoiding the damage of the goods products.

Along with Crane, it is one of the other major used MHE at Port; it carries the container and help in loading and unloading these containers at the Port across the world. The smooth operation at Port only possible because of Forklift, it is said, this machine plays the intermediary role between huge cranes, trucks and warehouses or Logistics Park.

Many of us just understand Forklift and its general usage, but we are not aware of various types of Forklift, which are designed and made for specific work at the site. One of the most popular or common machine is Counterbalance Forklift Trucks, when we think of Forklift, many of us think of this machine, for example, when people think of Backhoe loader, they think of JCB Backhoe loader, similarly when people think of Forklift, they think of Counterbalance Forklift Trucks. This machine is available in electric, diesel and gas.

The other different forklifts are; 3 Wheel Counterbalance Forklift Trucks, Reach Trucks, Hand Pallet Trucks, Powered Pallet Trucks, Sideloaders, Teletrucks and other.

The major companies which manufacture different types of Forklift are, Godrej, Nilkamal, Escorts, Voltas Material Handling Equipment, Toyota Material Handling India, Caterpillar, Komatsu and others.

People who prefer second-hand Forklifts, should look at various online platform to buy the used Forklifts. An emerging e-commerce portal for second-hand construction equipment and material handling is www.equipmentonestop.com, which has extensive varieties of different types of equipment including forklift.

As Indian economy is growing and industrial and warehousing sector is expanding, it would help the sale of different types of Forklift in near future.

Government Approves Rs 3770 Crore Chennai Metro Rail Project

Union Cabinet has given ex-post facto approval to the proposal for extension of Chennai Metro Rail Phase-I project worth Rs 3770 crore from Washermanpet to Wimconagar, which covers the length of 9 km.

The project will be executed by existing special purpose vehicle (SPV) of Government of India and the Government of Tamil Nadu having 50:50 equity of each i.e. Chennai Metro Rail Ltd, said the official statement.

At a total project cost of above approval, Central government will give Rs. 713 crore and Government of Tamilnadu will contribute Rs. 916 crore. The share of State of government included cost of the Land and R&R of Rs. 203 crore. The remaining amount of Rs. 2141 crore will come from loan from multilateral/bilateral/domestic funding agency.

The 9 km project between Washermanpet to Wimconagar is scheduled to be completed by March 2018 and it is estimated to carry 1.6 lakh passengers on this route after the completion of the project.

Extension of this 9 Km of Phase-I project will provide improved access to public transport for the dense population comprising predominantly industrial workers to move towards the central business district of the city for work, said the government.

The total length of the two corridors of Chennai metro rail will be 45 km and initial estimated cost of the project was Rs 14,600 crore.

Currently only seven metro stations covering 10 km of Chennai Metro Rail Phase-1 (Corridor-II) project is operational between Koyambedu to Alandur, it had operational from June 2015, these seven stations are; Koyambedu, CMBT, Arumbakkam, Vadapalani, Ashok Nagar, Ekkattuthangal and Alandur.

Once both the 45 km metro rail corridor will be completed, there will be total 32 stations. Of this, 19 underground stations and 13 elevated stations will be constructed in both Corridor 1& 2. In corridor-I route, stations from Washermanpet to Saidapet which has a distance of 14.3 km will be underground and in Corridor-II station from Chennai Central to Anna Nagar 2nd Avenue which will have 9.7 km distance will be constructed underground and remaining will be elevated.

To complete the Chennai metro rail project, both Central and Tamil Nadu government are expected to contribute 41% of the total cost of the project; the remaining fund is coming from the Japan International Cooperation Agency (JICA) and loan agreement between the Government of India and Government of Japan has been already signed.

In March 2016, JICA has announced to extend Official Development Assistance Loan (ODA) of Rs 1180 crore (19,981 million Japanese Yen) to Chennai Metro Rail Ltd (CMRL) for the construction of Chennai metro. The assistance from JICA will help in constructing underground tunnels, rail-tracks, electrical, telecommunication and signalling systems, procurement of the trains and consultancy service.

The Rs 14,600 crore estimated budget may touch up to Rs 20,000 crore due to various factors.

It is expected, after the completion of Chennai metro rail, travelling time from one end to another end of the city will be reduced by 75 percent.

Source: Information has been obtained from GOI press note, JICA, Chennai Metro Rail Ltd