Godrej Storage Solutions to invest Rs 400 cr in new unit near Chennai

Godrej Storage Solutions (GSS) will invest Rs 350-400 crore in a new facility near Chennai to meet an “uptick” in demand from warehouses and push exports.

GSS, which is a part of Godrej & Boyce, said it is growing at 15 per cent compound annual growth rate (CAGR), with 50 per cent of its revenue coming from consumer-driven industries like retail, e-commerce, and foods and beverages.

Vikas Choudaha, executive vice-president and business head of GSS, valued the storage systems market in India at Rs 2,800-3,000 crore. "The industry is growing at 8-10 per cent. We may see an uptick after the next three to four years," he told ‘Business Standard’.

"These are the systems that we are providing to the warehouses. The market's actual growth started post 2017 after GST (goods and services tax). Then, during the pandemic, we benefited from capacity additions as it was a boom time for the industry we were dependent on," he said. The company is considering newer markets like Australia for exports.

"Post pandemic, physical retail was driving the market – sustainable growth from expansions, third-party logistics creating facilities and the FMCG segment. This will be through demand in the manufacturing. The government is helping it through creation of infrastructure and policies like Gati Shakti," he said.

GSS said it has made significant investments to expand capacity and build capability to serve its customers. It has also invested in “human capital”, technology and integrating systems through an ecosystem of partners. The objective is to deliver better returns for customers by improving productivity, it said.

Godrej & Boyce’s other businesses include Material Handling Solutions, Storage Solutions, and intra-logistics solutions through a joint venture with Koerber (Godrej Koerber) and contribute 12-14 per cent of the revenue.

The warehousing sector is in a period of “significant transformation”, driven by growth in manufacturing, e-commerce, consumption and modernisation of logistics. By the end of 2024, Grade A warehouses’ contribution in storage solutions in terms of supply and absorption is projected to exceed 60 per cent.

Godrej & Boyce said it recognises the potential of automation, smart storage and material handling in improving organisational' productivity. While using technology to automate intra-logistics has advantages, it has to be integrated with warehouses.

"The future of intra-logistics in India is not just about automation; it is about creating intelligent, responsive ecosystems that adapt to the ever-changing demands of commerce across various markets. Automation could vary from simple conveyors systems to AI/ML driven technologies,” said Choudaha, referring to artificial intelligence and machine learning.

“Companies will increasingly adopt and invest in these systems/ technologies as they realise the advantages, including increased efficiencies, productivity, accuracy, and cost savings in long run."