India’s first free-trade warehousing zone to come up in May
Amritha Pillay 14 April 2010

Arshiya International will start operating its first free-trade warehousing zone in Mumbai by 23rd May; its hubs at Khurja (near Delhi) and Nagpur are likely to be completed by the end of FY11

India’s first free-trade warehousing zone (FTWZ) will be operational by 23 May 2010. Arshiya International, the logistics company developing this zone, will officially open its Mumbai FTWZ next month. Trial operations have already started at this site.

“Some clients have already moved in, the trial run is going on right now. Some of our clients have started their material movement from various countries and also from various parts within the country. The entire material should come inside the (Mumbai) zone by the end of this month or latest by the start of May,” said Ajay Mittal, chairman and managing director, Arshiya International. “We would also start billing our customers from 23rd May,” he added.

Arshiya International is developing the country’s first FTWZs in three locations—Mumbai, Khurja (near Delhi) and Nagpur.

On the clients who will be using the zone, Mr Mittal said, “We have around18 clients for the 4.5 lakh sq ft developed in the initial construction which will be operational next month.”

The company plans to develop a total 27 lakh sq ft of warehousing space in the Mumbai FTWZ, of which 4.5 lakh sq ft has been completed. The entire project in Mumbai is likely to be completed by the last quarter of the next fiscal.

Mr Mittal added, “I expect decent revenues. Let us first prove (that) the model (will function). I see healthy revenues from our operations. More importantly, it will create integrated value for Arshiya International as a whole.”

While the Mumbai FTWZ will be formally operational by 24th May, the Khurja FTWZ is likely to be operational by the end of 2010. “(The) Nagpur FTWZ is expected to be completed by the last quarter of FY11, Khurja should be operational before that,” said Mr Mittal. The Mumbai FTWZ was completed in six months. The construction work at Khurja has already started and the Nagpur FTWZ is likely to get approval soon.

The company also plans a fourth FTWZ in southern India. “It should be between Chennai and Ennore ports, though the location is yet to be decided. On the eastern front, it is a wait-and-watch scenario as there is no satisfactory port available to cater to this zone,” Mr Mittal added.

Going forward, the company is looking at a capital expenditure outlay of Rs7,000 crore from the current Rs2,500 crore to Rs2,700 crore. “These investments would be required to fund our expansion in the FTWZ arena, in phases,” said Mr Mittal.

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