National Bulk Handling Corporation (NBHC) is planning to increase its commodity management capacity by almost four times in the next five to seven years. At present, this subsidiary of Financial Technologies India Ltd manages 473 warehouses, having two million tonnes capacity. The ISO-accredited company offers storage, testing-grading, fumigation & pest management, warehouse audit and commodity valuation services.
“In the next five to seven years, we want to increase warehouse/commodity management capacities to 12-15 million tonnes. In the next one year, we would reach a capacity of five million tonnes. This will be done under various strategic formats, including acquiring and developing owned capacities,” said Anil Choudhary, MD & CEO, NBHC.
While the company acquired some warehouses recently in MP, Rajasthan and Karnataka, it is yet to give final shape to its acquisition plan. Once ready, the plan is to be funded by debt and some equity may also be raised by placement or otherwise, he said.
Warehousing is an emerging business. The government has 55 million tonnes of food stocks and will have to raise that to 100 mt over a period of time to ensure food security. This will require warehouses and quality grading and such other services as will grow with it, as banks are more comfortable in funding against food stocks if they are certified for quality and proper electronic warehouse receipts are issued against these.
NBHC has developed expertise in these areas and till date has facilitated Rs 14,000 crore of funding, covering 60,000 farmers against warehouse receipts issued by it.
The lack of required warehouse facilities is causing a big loss to the government and system. For example, 17 mt of wheat is stored in open ground. Many opportunities could be tapped with sufficient warehouse capacities, such as contract farming. The government is also shortly expected to clear issues around a warehouse regulator.
The relevant law says there should be one but it hasn’t happened. Efforts were being made to bring the agency under the Forward Markets Commission’s jurisdiction.