MUMBAI: Kishore Biyani, who recently unveiled plans to make Future Group Asia’s largest integrated consumer company, also aims for the logistics arm to be one of the world’s top 10 supply chain solutions providers. “Supply chain is the single most important aspect of our business.
We have to make this sexier. There’s a lot of scope and we have just started thinking. We have to be among the top 10 supply chain companies in the world in the consumer space,” he said in an interview to ET. Biyani said there is a lot of scope for investment in bigger warehouses, technology, automation and robotics.
He didn’t elaborate as the company, Future Supply Chain Solutions, is slated for its maiden public share issue later this week. The Rs 650 crore IPO opens on December 6 and closes on December 8. The company has set a price band of Rs 660-664 per share for the IPO, which values it at Rs 2,644 crore-2,660 crore. Biyani aims for the Future Group to clock overall revenue of $1 trillion by 2047.
Biyani, a pioneer in India’s phenomenal retail growth story has also been a maverick when it comes to supply chain solutions. Future Group was the first in 2010 to shut down 18 warehouses which handled logistics for its apparel business and integrate them into one mega warehouse in Nagpur.
It did the same for some of its other brands. Seven years later, in 2017, companies across the country have begun to do it, as the implementation of GST, the single biggest tax overhaul since India’s independence, encourages them to have fewer, bigger warehouses rather than dotting them across all consumption centres in the country. “The old economy had its own ways of managing supply chain.
The new economy has to have its own technique and ways of managing supply chain with the aid of science and technology. So we designed this business around that,” he said. “We started this company (Future Supply Chain) because nobody else was able to deal with the complexities that we were dealing with,” he added. The warehouse at Nagpur initially had the capacity to handle 100 million pieces per annum. Two years back, Biyani realised the capacity would have to be immediately trebled to handle the sweeping industry demand and the growth he envisaged for his business.
The company invested Rs 80 crore in a single sortation unit, which Biyani claims is Asia’s second largest, only comparable to one used by Nike in a warehouse in China. The unit can alone sort 35 crore garments at once. It was commissioned in June and will operate to its full capacity in 3-6 months. Biyani claims the volumes will significantly improve margins in the next 2-5 years. Future Supply Chain has 42 distribution centres across India that it has leased.
It operates two others leased by its clients. Together, all the centres span 4 million sq ft of warehousing space. Its network also includes four temperature-controlled distribution centres, 14 hubs and branches covering 11,228 pin codes across the country. About 37% of the company’s revenue comes from third party operators such as Bestseller which sells fashion apparel under brands such as Jack & Jones and Vero Moda.Biyani said he wants 50% of the company’s revenue to come from third party.