Concor eyes e-commerce players in logistics push, lines up Rs 5,000 cr

Concor is expecting Amazon, Flipkart, ShopClues, Paytm, e-bay, and Snapdeal to make use of its logistics distribution centres

In an effort to tap the booming e-commerce market in India, railways subsidiary Container Corporation of India (Concor) is set to come up with 20 logistics distribution centres across the country with an investment of around Rs 5,000 crore.

Concor is expecting major e-commerce players like Amazon, Flipkart, ShopClues, Paytm, Snapdeal, and e-bay to make use of these centres. A senior official said at least 50 million square feet of warehousing space will be available for these players in the next four years. 

“These distribution centres will be under the public-private partnership model. We expect e-commerce players to be a part of the bidding process,” said 

Manoj Kumar Dubey, director (finance) of Concor. The private partner will be able to control the operations and have complete marketing freedom once there is a tie up for the logistics distribution units. 

In March, Concor had started its first logistics distribution centre in Chennai. According to reports, though these facilities were earlier developed by the NDR group (a firm based in south India), later it was acquired by Dubai-based DP World. The second such facility is likely to be in Agartala.

At present, Concor has 75 per cent market share in the container segment. The firm had earlier lined up a capex of Rs 6,000-8,000 crore for a period of five years from 2017. Widely seen as a move to increase its presence in the container space to 80 per cent, Concor had announced an aggressive marketing offer that gives 45 days of free storage to its customers.   The target is to double the turnover from Rs 6,167 crore in 2017-18 to Rs 12,000 crore by 2021.

Dubey said his company was also looking to expand its presence in Bangladesh, Nepal and Egypt. “We have submitted bids for the construction and operation of 20 dry ports in Egypt as part of a consortium,” he said. Concor, Singaporean port operator PSA International and Egyptian construction engineering company Hassan Allam Holding had reportedly tied up to bid for the construction of a dry port, west of Cairo. 

According to sources, Concor will own 45 per cent stake in the consortium while the rest will be equally shared by the two foreign companies. Concor is betting big on the dedicated freight corridors to boost its business. This will happen once the corridors get completed (till Palanpur) by September 2019. The firm stated that this will be advantageous as Mundra and Pipavav, with a higher share of the rail business, will get connected to the corridor. 

The western and eastern dedicated freight corridors are vital to increase the total traffic of the railways by at least 144 million tonnes by 2022.