Daljit Singh NDR

8/2/2019 Daljit Singh NDR

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Future of Agri Warehousing and

Mechanization of FoodWarehouses with Rail SidingA presentation by the NDR Group


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Agricultural Scenario in India India is the 2nd largest food producing nation after China.

More than 20% of the produce is lost due to lack of

storage facilities/ packaging/cold storage etc

Three public agencies are providing logistic support tothe agri sector namely

Food Corporation ofIndia (FCI)

Central Warehousing Corporation (CWC) and

17 State Warehousing Corporations (SWC)


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Steps taken by the Agencies Due to lack of space gap with the agencies private

partnerships were sort in the year 2002.

A 7 year guarantee period was given for the rentals forhiring of any new warehouses. The guarantee has beenincreased to 10 years now.

Not many private players are able to bid for rail sidedwarehouse because of unviable conditions


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Present Scenario Huge GAP in the space required

Fragmented space available

Present space not suitable (quality warehousing) forstoring the grains

Far from Rail Sidings

Two operations involved because of Rail siding distance

Huge loss of produce due to lack of space


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Road Freight - Disadvantages Diesel costs are heading north and so are the freight

charges

Labour is expensive hence need for mechanisation

Finding drivers is a challenge It is a challenge to handle bulk cargo by road

Toll charges almost all major roads in India levyheavy toll.

Entry Restrictions major cities have entry restrictiontimings

Inadequate number of vehicles for this particularpurpose single vehicle owners form about 70% of theindustry.


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Rail vs RoadLocations Rail Freight per MT Road per MTMumbai New Delhi 1100 1350 # 1800 2300*

New Delhi Mumbai 1000 1250# 2000 2350*

Vizag Delhi 1250 -1350# 2100 -2300

# - Concor Rail freights source* - CII Logisitcs indicative trucking rates

Rail Road

Cheaper option Expensive

Congestion of Roads is

prevented

Roads are getting clogged

Environmental Friendly Polluting the Environment

Advantage of Rail over Road


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Going Forward -FCI Consolidate smaller facilities to a rail sided operation by giving

opportunities to the rail sided warehouses by relaxing norms.(pastutilisation, distances)

It is very difficult to expect 2 quotes for a same location by railsiding, it is rejected and hence we will never have rail sided

warehouses and you must give a 50 km vicinity for a rail sided

warehouse. Railway spec of warehouses is 70 feet per warehouse which is very

difficult to get so much land and warehouses must be atleast 150 to200 feet width because we have conveyors now.

Value addition to be done for wastages Use of conveyors for loading /unloading

90% of bulk transport to happen only byTrain so what are we doingtowards it ?

Allow integration of facilities so we can bring down cost as we do nothave rakes and it is a seasonal business.


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Going Forward for other agri

All agri warehousing is now done by traders

Need to get into more rural areas and need action with thecurrent setup of 100% depreciation and get into a credit setup

for the farmer to actually store produce and fund him basedon the stock price of commodity

Best bet for wastage reduction and actually pay farmers

Need a 15 yr funding from banks on this to give the farmer atbelow 50 Rs per ton per month.


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Going Forward for Cold Storages

More number of cold storages with trading facilities

Cheaper alternatives to the farmers

Get more into the funding for farmers

Need to understand the info on farmer for the credit rating andalso on the info on the commodity for the crop.

Need to close out on processing centre for the cold storages toavoid wastages and much better packing facilities.


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For the Bankers - Need to support huge rural warehousing locations . Give loan to farmer for produce and not trader.

Dalal currently giving 90% of price due to farmer at his

field which we have to convert to 90% loan on delivery tothe warehouse and share the increase in produce price withfarmer. (staple food never has come down from harvestprice in the last 40 yr of recorded price index)

By this we get to know farmer better and more personal

contact with bank which will lead to a explosive farm creditfor the following which can double the current bankingindustry .


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For the Bankers - Crop loans Crop insurance

Crop pattern funding

Crop storage loan Vehicle loan to farmer both for personal and farming

Housing loan for the farmer

Medical insurance

Personal loan for farmer and marriage loan for farmer Huge personal touch with farmer which will make ruralbanking a reality and farmers life a little better

Crop storage with easy loan (if required no liability loan) isthe best way to earn a farmers trust and comfort.


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Crop

Financing

Financingagricultural inputs(Seeds/fertilizer/

Pesticides)

Farm Machinery Loan/ cropinsurance/ medical insuran

Vehicle/Car Loans/ housing loans/marriage loans /education loan

Making Farmer to believe in farming for abetter world for all

For the Bankers -


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Facilities in a Rail Terminal

AgriAgri StorageStorageFCIFCI

Bonded/Bonded/GeneralGeneral

WarehousesWarehouses

ICD /CFSICD /CFS open yardopen yard

DOMESTICDOMESTICCARGO/CARGO/

COLDCOLDSTORAGESSTORAGES


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FACILITIES IN THE PROPOSED

Rail Linked HUBs Land Area of 40 to 80 Acres in each location

Ample facilities for

Agri produce FCI

Exim/Bonded WarehouseGeneral Warehouse

Whole-sale Market Yard, including CA, CS, Auction Hall

Rail Siding for

Container Trains

Handling of bulk cargo through FCI

Dedicated siding for major clients

Value Added Services

Re-packing Bar Coding & Labeling


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Why an Integrated HUB

Huge Investments in the land and railsiding/conveyor systems.( 50 cr) only common

services because of land cost and railconnectivity cost.

Value addition in terms of packaging/labelingcold storage etc needs to be provided.

Clubbing of cargo both FCI & Domestic willmake it feasible to run full racks.

ICD/CFS will support the exim function for thefood industry.


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View of our Timmapur facility


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Our humble uncalled views FCI has made process simple to build warehouses by private partnerships

which is good for small warehouses below 50000 ton location but we feel it is amust to have rail sidings beyond this number for all locations .

FCImust strictly implement the current proposals which have come for rail aswe feel current applies may just build the warehouse and not connect by rail

and still get 60% rent in which case FCI will lose more than 150 Rs per ton inone handling an transport which is killing in the long run.

FCI even if necessary must speak to railways to make sidings simpler and agreefor push back sidings for FCI as this is the future of food security ofIndia.

FCImust expand the warehouse width for a rail siding from current 70 to 150for a rail sided warehouse as we have to mechanise them anyway as we have

serious shortage of labour currently and we have to mechanise. This will helpto bring down area required and can still have the same number of sidings (picin last slide)

Some distances too short in many locations and must be able to club to makemore viable sidings within 50 km any location.


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Representation of proposed

increase in width

70 ftWidthwareh

ouse

70 ftWidthwareh

ouse

RAI

L

S

IDI

NG

RAI

L

S

IDI

NG

ROAD

150 ft

Width

warehouse


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Thank you for your Time

Documents

Daljit Singh NDR