"We plan to diversify into logistics park and cold chain"

Interview with Vinod Asthana, Managing Director, CRWC

As the government grapples with massive problem of storage and warehousing of food items, the Central Railside Warehouse Corporation (CRWC), which provides transit warehouses along side tracks, could come to its aid. The Corporation has devised plans to part convert its existing transit warehouses into modern cold-storage facilities. In an exclusive interview to Sanjeeb Mukherjee, CRWC Managing Director Vinod Asthana says that growth of transit warehouses would not eat into the revenues of traditional storages as this is an add-one facility for consumers. Edited excerpts.

CRWC was incorporated as a separate company under the department of food some 5-6 years back to provide transit warehousing facilities on railway land. How far have you succeeded in your goals?

Well, till date we have already constructed around 18 railside warehouses and are in the process of building another 4-5. In 2011-12, we had an installed capacity of around 3.5 lakh tonnes and handled around 8-9 million tonnes of goods. Going forward, we will have a installed capacity of around 4.5 lakh tonnes and will handle around 16-17 million tonnes of goods. From a profit before tax of around Rs 2 crore in 2007-08, we earned something around Rs 20 crore in 2011-12 and when all our capacities come into operation, CRWC’s profit before tax could jump to around Rs 50 crore. One must understand that we are still at a takeoff stage and once it matures it will do good business. Some terminals are doing very good business, some are not but we are hopeful that a time will come when at least 80% will do good business.

So what kind of business model do you have?

We charge normal warehousing charges from customers. Iif someone stores with us on a regular basis, we charge around Rs 40-45 per tonne per month and if goods are stored once in a while the charge is Rs 4-5 per tonne per day. Basically, we don’t charge in square meters as the industry norm because we deal with Railways where all calculations are in tonnages. To the railways CRWC pays lease rent for using their land.

Going forward, what kind of expansions and diversification plans you have now that you have fairly settled down?

Well, once we complete the 24-25 transit terminals, we are going to request the Railways for its land for another 10 terminals. Also, we are planning to move away from just handling Railway cargo and become an aggregator and distributor and also diversify into segments like Logistics Park and cold chain. In a small way, we have started working as an aggregator and have given a small space in our terminal in Bangalore to companies like TCI and GATI which are basically logistics carriers. They bring all their products and keep it in CRWC warehouse; thereafter they book a train and dispatch their goods. It is good business for us and also for these companies. Alongside these, we are also working with the Railways to develop a schedule system of running the trains wherein all terminals falling in rail route is connected and trains reach there on a scheduled time every day.

How do you plan to merge your cold chain idea with transit warehouses?

Today most of the cold chains that we have are plain cold storages with multi-chambers, humidity control etc, which are not very feasible because of which many people have even given up the business. What we are trying is a cold chain integrated system, wherein we plan to convert part of our existing warehouses into cold chains, so that a producer can bring his produce from a cold chain which usually is at quite a distant from a Railway Station, store it in our warehouse and then transport it in refer vans or refrigerated containers. After which he unloads the produce again in CRWC cold chain at the destination station and transports or distributes it, so there is no damage. In Dankuni (West Bengal) we are working on the same model. It will have 16 chambers and can handle 4,000 tonnes capacity with all modern facilities.