Logistics – Snowman says to invest Rs 65 crore in expansion this year

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Bengaluru-based Snowman Logistics, India’s largest private cold chain service provider, is going ahead with its expansion plans after its proposed takeover by the Adani Group fell through, Chief Executive Officer Sunil Nair said.

“We will be opening two more units during the course of this year – in Siliguri and Coimbatore. Besides, we will be upgrading the existing capacity of our Krishnapattnam and Mumbai units. In a cumulative sense, we will be investing Rs 65-70 crore in fresh capacity creation and upgradation this year,” he told indoasiancommodities.com in an interview.

According to Nair, the expansion planned for the current year is part of the company’s strategy to add to its capacity by 15 percent annually.

Sunil Nair, Chief Executive Officer, Snowman Logistics

He, however, refused to comment on what went wrong between Adani and Gateway Distriparks, the main promoter of Snowman Logistics. Mumbai-headquartered Gateway Distriparks is a logistics conglomerate with presence in container freight stations (CFS), inland depots and cold chain logistics.  

In December Adanis, who hold a minority stake in Snowman Logistics had announced acquiring Gateway Distriparks’ stake for Rs 296 crore.

However, it failed to complete the process by March 31, following which Gateway Distriparks initiated arbitration proceedings in May. But early this month, Adanis said in a stock exchange filing that the two companies had resolved the issue and Gateway Distriparks would continue to remain the main promoter.

(See the full interview on our YouTube channel here.)

“Adani Logistics shall not be involved in the day-to-day management or business operations of Snowman and shall not have a right to nominate or appoint any director on the board,” the company said in its filing.

Meanwhile, the new units to be built by Snowman at Siliguri and Coimbatore would have the capacity base of 4,200 pallets each. The capacity upgradation planned in the existing units in Mumbai and Krishnapattnam would be close to 3,000 pallets.

Snowman Logistics is currently operating 33 cold chain units in 15 cities, which are the major consumption centers in the country. The cumulative capacity offered by the company is close to 1,07,000 pallets.

Operating in a pure B2B model, the company is primarily aligned with processed food (65 percent), fresh perishables (10-15 percent) and pharma that takes care of its remaining capacity.

“We are covering all ends of cold chain services for our customers. The company has invested Rs 600 crore so far in creating an expansive infrastructure base which includes 300 reefer vehicles owned by the company,” Nair emphasised.

Snowman Logistics has also recently started procuring farm fresh produce by setting up dedicated collection centers in Maharastra for e-commerce major Amazon.

“The preliminary results are encouraging and we are chalking out a strategy to enhance our engagement with Amazon in other states as well as developing a full-fledged e-commerce centric vertical gradually,” Nair said.

Snowman Logistics had reported a revenue of Rs 240 crore at the end of 2019-20, which marked a marginal improvement of Rs 232 crore in the previous fiscal. 

Ritwik Sinha chased trucks in his childhood, without realising logistics would become a deep love for him. Inherently a television man, he now spends long hours interviewing key people for our very popular YouTube channel. Podcasts are next on his list. In his free time, Ritwik is either looking for a warehouse filled with commodities or hitching a ride on a cold truck – all of which yields great stories!

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