In a candid conversation with Economic Times Global Logistics Show team, Mr. Chatuvedi shares the initial years of Adani Group's foray into Agri Warehousing Industry and the challenges that he faced in creating the brand that it is today. He talks about the nuances of developing not only new storage infrastructure but also upgradation of practices in logistics services to cater to the burgeonoing demand for agri commodities storage. With three decades of successful general and strategic management experience in manufacturing, trading, agri storage infrastructure development, Mr Atul Chaturvedi is one of the most experienced logistics leaders in the country . He has been associated with Adani's since 1998 and has played a key role in the development of the Agro business and Agri Infrastructure of the Group
Q.1 What is the current market scope of Agri logistics in India?
India is the second largest producer of Food Grain and F&V. The previous governments had hardly thought beyond brick & mortar warehouses with least emphasis on its logistics. One pilot project of Bulk Handling, Storage & Transportation under PPP mode created by Adani in 2007 took 8 years by the government to accept that it is the most economical model for the country that actually eliminates losses, reduces end-to-end cost to the government and benefits farmers. The current government has taken some constructive steps towards modernizing the Storage infrastructure in the country. FCI is now focusing on improving Storage conditions of its granary. Existing Storage capacity of FCI and State Agencies is 76 MMT that includes 18 MMT in CAP i.e., Storage in open. GOI has decided to part way with Open Storage as that leads to huge losses. Apart from that, there are over 50 such facilities with FCI that are lying abandoned due to obsolete technology or in vulnerable condition. State governments are also being encouraged to improve storage conditions in their states. Emphasis is being given on Bulk Handling and Bulk Storage, whereby government has targeted to create Storage capacity of 10 MMT in the form of Silos. Also, as a pilot project, Rice Storage in Silos is also being implemented for the first time in India.
Q.2 What is the impact of Agri logistics on Farm Production?
Farm Production per se' is not impacted by improving Agri Logistics but yes, Procurement from farmers is hugely impacted in a positive manner. Silo terminals become Procurement Centers where farmer can deliver directly- with or without middleman. Multiple handling in the traditional procurement system is replaced by single handling at such Silo Terminals where entire stocks are handled in Bulk.
Q.3 What are the current technological developments in Agro Fresh industry?
Storage of High value Fruits under Controlled Atmosphere (CA) is the latest technology that ensures longer storage life and sustainable quality of fruit. With this technology, the consumer gets fresh fruits throughout the year. Adani and a few more companies have set up state of art CA facilities for apples in Himachal Pradesh.
Q.4 What are the major challenges that you face in this sector?
(a) In Agri Logistics, although good focus is now being given to improve the Storage Infrastructure in the country, Bulk Transportation is still a major challenge. Unless, the entire supply chain does not become bulk, full benefits would not be achieved. Indian Railways need to bring in suitable policy for Bulk handling through Private partnership by incentivizing the investment.
(b) Hub and spoke is the most ideal model for Indian system of procurement, storage and distribution. We need to create spokes by way of mechanizing our Mandis.
Q.5 What relaxation, in terms of regulation and policies, the industry seeks from the government?
(a) Procurement, Storage and Distribution of food grain have always remained government's domain. Improper storage and handling cause losses in the tune of 4-6 %. It is high time, government partners with private sector and gives them responsibility to handle the supply chain with assured quality and quantity.
(b) Railways need to work in close co-ordination with Ministry of Food because creating storage infrastructure alone will not serve the purpose. Rail movement is equally important. Traditional movement by Railways has a lot of inefficiencies and bottlenecks that leads to losses and pilferage. Modern Bulk Rail Cars need to be introduced the way movement happens in the developed countries. This will also improve operating efficiency of Railway's rolling stock.
Q.6 What would you like to suggest to the marketers focusing into Agri logistics sector?
Of late, it is observed that a lot of private sector companies are taking interest in Agri Logistics sector. It's good for the country as this sector has just opened and there is a good potential in the coming years. However, in the race to get into this field, people are going to such cost levels where it would probably be impossible to break even. This kind of rat race is neither healthy for the prospective investors nor for the government. Ultimately, you are the custodians of government's food stocks. It would be killing for you if you are not able to take care of the stocks. So, going beyond a certain threshold should be avoided by the marketers who are eyeing on Agri Logistics sector.
Q.7 What kind of technological, infrastructural and knowledge up gradation logistic companies need to meet the demand of goods?
(a) Steel Silos, Material Handling Equipment, Dryers, Grain Chillers, Temperature Devices, Insector devices, RFID, Bulk Rail Cars, Hydraulic Tipplers and Aeration devices are some of the technological interventions that are required in Agri Logistics.
(b) CA stores are technologically advanced storage system in F&amp;V.
Q.8 What do you think about&nbsp;platforms&nbsp;such as&nbsp;'Global Logistics Show'&nbsp;contribution&nbsp;to the growth of the&nbsp;Agri&nbsp;&nbsp;industry on a national level?
Such platforms like Global Logistics Show do provide an opportunity to various stake holders to show case their goods and services besides sharing the ideas and thoughts with the relevant government bodies.