Pvt SEZ to ink Rs 300 cr MoU for logistics in GIM

Sunil Rallan, MD, said his firm is preparing for the next level of investments even as discussions with the state government for infrastructure support is underway. “At the last GIM held in 2015, we had committed to bring in Rs 100 crore. This target has been achieved and exceeded as we have brought in Rs 150 crore investments through global logistics players,” he said, reeling out the names of the Hong Kong-based Kerry Logistics, DHL, Lom (Korean major), TVS Toyota Logistics, Seaway and Minerva Logistics.

The warehousing special economic zone, in Mannur village (Thandalam, Kanchipuram district), near Chennai, caters to a diverse industry mix of auto, machine tools, pharma, electronics, heavy machinery, earth moving equipment and engineering products.

Of the 300 acres land allotted to JMFTZPL, only 40 acres have been used. While other states have sought Rallan’s help to develop warehouse infrastructure, he is upbeat about TN as he anticipates the Chennai-Bengaluru corridor to be the next Shenzhen and a global manufacturing hub for overseas companies that do not want to go to hinterlands. “Due to the port infrastructure, TN has an edge over other locations,” he pointed out.

So far, 1 million sq ft of warehousing space is occupied by MNCs and logistic companies engaged in foreign trade activity. “Come April, the first quarter will see investments of Rs 300 crore kicking in,” Rallan said, adding except for another facility in Mumbai, all other warehousing players in the country belonged to the non-special economic zone category.

Rallan attributes the foresight of operating out of a SEZ a decade ago, that helped JMFTZPL reap rich dividends besides an edge in the business. The entity is expected to close the financial year ending March 2019 with Rs 40 crore lease rental revenues. “We expect our revenues to go up by 30 to 40 per cent next fiscal,” Rallan said, noting that the lease rentals have been steady for some time now.

Offering infra quality that is competitive and on par with Singapore and Dubai are the reasons behind companies migrating to use the facilities of JMFTZPL.

Rallan is also looking at partnering with foreign funds to avail the external commercial banks credit facility. Unlike the private equity route, where the cost of borrowing is high, constituting 17 to 18 per cent, the ECB approach offers credit at 7 to 8 per cent interest. Such a move would help in its overall development, he said.