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Supply Chain - India
Allogistx International Inc.2130 Huntington Drive suit 205South Pasadena, CA 91030 [email protected]: 323.254.9550Fax: 323.315.9311
Allogistx International Inc.F-54, 1st FloorSej PlazaMarve Road, Malad (west)Mumbai, India 400 [email protected]
Agenda
-Evolving Indian Economy
-Logistics Outlook
- Changing Supply Chain Dynamics
- New Growth Drivers
- Supply Chain Challenge
- Emerging Solutions & New Platforms
2
India is Growing! Source: Economist
• India will be the third largest economy by 2040 3
Urban Population Increasing
• Urban population projected to cross 500 million by 2025
- Cities are expanding Agro Enterprise Without Borders, Singapore, 2009 4
Food Consumption Increasing
• Food demand increasing - Quality preference increasing 5
Retail Sales Growing
• Retail sales will cross US$ 900 billion by 2014Agro Enterprise Without Borders, Singapore, 2009 6
Growth Drivers
Demographic advantage: Young population Credit availability Increasing discretionary incomes Increasing retail space
7
Logistics Outlook
• Indian Economy is growing at over 8% and Logistics industry is booming India is poised for a major growth in the coming years and Indian Freight Forwarding is poised to become the next exciting growth sector.
• According to World Bank LPI (Logistics Performance Index) survey conducted among 155 countries India ranked 47th and continues to be the top performer in South Asia. The survey also concluded that excluding high-income countries, India is also among the 10 most significant over performers.
Size of the Industry…
• Logistics Industry size $ 200 billion by 2020• The Indian logistics market recorded revenues of
about $ 82.10 billion in 2010, witnessing a growth of about 9.2 percent over the previous year.
• Indian logistics market is likely to cross the $ 200 billion figure by 2020. Strong growth of key manufacturing industry sectors such as automotive, engineering, pharmaceuticals, food processing and textiles among others shall contribute significantly to this growth
Challenges
Inefficient Supply Chain
Infrastructure
Low Technology Penetration
Food Safety
Unorganized sector
Bureaucracy
Lack of scalability
Sanjeev Asthana Agro Enterprise Without Borders, Singapore, 2009 8
Disjointed Food Supply Chain
Village Commission
AgentSub Farmer
District Commission
AgentWholesaler Retailer Consumer
• Low yield / non-standard qualityFarmer
• No control on quantity / quality of raw material
• Price de-linked from market Processor
• Unscientific and unhygienic handlingVillage
• Lack of infrastructure leading to loss of quality
Commission Distributor • Poor market access Agent
• Loss in trade passed onto farmer
• Lack of infrastructure leading Mandi / Local • No infrastructure for handling/grading Retailer
agents •Price quality correlation not assured
• High prices Transportation
• Unscientific method leading to loss of quality /damages Consumer • Limited choice
• Inadequate infrastructure
Wholesale •Rampant wastage
Non value adding players •Opportunistic profiteering
Sanjeev Asthana Agro Enterprise Without Borders, Singapore, 2009 9
Poor Supply chain Infrastructure • Poor infrastructure facilities for
StorageTransportationProcessingPackagingDistribution
• About 3,500 cold storages/warehouses Only 13m tons of storage capacity for production or 140 mn
tons of Fruits/Vegetables
Sanjeev Asthana Agro Enterprise Without Borders, Singapore, 2009 10
Supply Chain - High Costs • Inefficiencies in Distribution
• Lack of cold chain and warehouse structure• Logistics costs in India are among the highest• Fragmented retail structure
• Supply Led Growth
• World: 72%
• India: < 1%
• More than 5 million retail outlets selling food products • Limited focus on food safety and hygiene • Limited choice to the consumer
• Low investment in quality control, product innovation, private labeling and market intelligence
Agro Enterprise Without Borders, Singapore, 2009 11
Underdeveloped Processing Industry
• Fruits and vegetables Country % Processed
Malaysia 83% 2-3% of produce is processed8%-37% lost in storage and transportation
South Africa 80% Phillipines 78%
- Inadequate storage and cold chain Thailand 72%
Brazil 70%
USA 65% - Inadequate processing and marketing infrastructure India 2-3 %
• Grains 3% is lost in storage
Opportunity Significant growth potential & a challenge
Agro Enterprise Without Borders, Singapore, 2009 13
Way Forward
Private-Public-People Partnership can be
growth engines for Supply Chain
*Have someone who is Local as well
as Global help you realize these
opportunities…
Agro Enterprise Without Borders, Singapore, 2009 18
Thank You!
Allogistx International Inc.2130 Huntington Drive suit
205South Pasadena, CA 91030 [email protected]: 323.254.9550Fax: 323.315.9311
Allogistx International Inc. India
F-54, 1st FloorSej PlazaMarve RoadMalad (west)Mumbai, India 400 [email protected]
Thank You!
