Snowman Invests Rs 425 Cr To expand Warehouse

Snowman, the cold chain logistics giant, has planned for an infrastructure expansion with intent to invest Rs 425 crore over the coming 3 years. This will encompass increasing its warehouse capacity to more than 2 lakh pallets from the current 1,13,208 and 100 reefer trucks taking the total number to 393.

The Snowman company earns much of its revenues from the food and beverage segment, the COVID-19 pandemic rattled the earnings from this space. Its customers in the ice cream industry, Quick Service Restaurants (QSR) space and meat and seafoods went through a lag because of the national and global lockdowns. These newer expansions will be for pharma and e-commerce.

Cold chain logistics was deemed an essential service by the Ministry of Home Affairs which permitted the company to be operational throughout the lockdown period.

Coronavirus has affected the operations across cold chain segments. The ice cream industry was impacted as most of their sales happen from March to July. Since the nation was under lockdown during those months, it affected their business.

“This year, it has started well, but now due to lockdown in most of the major cities, we see the impact,” said Sunil Nair, CEO, Snowman Logistics.

“Expansion at Krishnapattanam and Chandigarh are commissioned. Our new facility at Siliguri is almost ready and expected to be functional in a few weeks. Mumbai expansion should also be within 4-5 weeks. Coimbatore construction is mid-way and may take few months. For all these expansions, we will be investing Rs.70 crore,” Nair added.

The QSRs were hit barring a few engaged in doorstep delivery. However, with hotels and QSRs functioning this year, there is business revival but far lower than the pre-Covid phase. “In the case of the seafood & meat processing industry, which is largely export-oriented and with international trade coming to a standstill leading to scarce container availability, affected this sector,” Nair further stated.

For the global e-commerce customers, the cold chain logistics major has put in place process where the agri produce is gathered from the farmers and is supplied to strategic hubs after it is sorted and packed. From here, its e-commerce partners deliver the products to homes of the company’s customers.

Nair also mentioned- “This was possible through people, process, and technology. In addition to managing warehouse and value-add centres, we also focus on the collection centres in remote parts of India to source fresh vegetables and fruits directly from the farmers.”

The company has espoused mobile based applications, which augment visibility at warehouses. In the area of cold chain logistics it aimed on energy-intensive needs of perishable products and alleviated resource consumption. Solar panels on the rooftop of all its cold storages were installed to cut down power cost enabling adoption of renewable energy.

Delving on the dearth of capacities in the organized sector, Nair noted that transportation was the major challenge in cold chain logistics particularly during the pandemic. Reluctance among truck drivers to work was seen as they were worried about their safety.

“The ones who operated encountered hurdles on the roads because of strict Covid restrictions with no access to way-side eating joints. Despite ample trucks, profitability was a challenge. Hence we envisage acute shortage of truck drivers in the near to long-term and fuel price hike stresses this business further,” Nair concluded.