Indo Arya to ink warehousing deal with Birla Retail, talks to Wal-Mart

The latest entrant in the retail race Aditya Birla Retail, which recently opened its first 'More' supermarket outlet in Pune on June 1, is in advanced talks with Indo Arya Logistics for exclusive warehousing space. The logistics company will also provide transport and value added packaging services.

"We have been working with a few other Aditya Birla group concerns like Hindalco . Right now, talks are on for an exclusive warehouse for its retail operations," said Indo Arya Logistics director Yogesh Arya. The size of the warehouse will be between 50,000 and 1,00,000 square feet, he said.

Initially, the retailer is looking at an exclusive warehousing facility and the number may gradually be increased in accordance with the company's growth plans. The negotiations will be hammered out in the next few months, Arya said. The logistics company has announced the launch of India's largest Regional Distribution Center (RDC) at Hassangarh, Haryana, with an area of 5.14 lakh sq.ft. This RDC would take care of its retail clients Pantaloons, ITC, Reliance Retail — offering services from source to destination delivery, assembling and packaging. "Such high technology warehousing provides great strategic competitive advantages and is core to a company's business. Companies have started strategising growth plans in synergy with the high quality warehousing space available in the country," said Arya.

The company is also in talks on handling of logistical operations for Walmart in India. "But nothing has been finalised yet and the talks are at a primitive stage, where it will be very difficult to comment," said Arya.

The increasing investment in infrastructure, booming manufacturing sector and development of the organised retail sector are providing huge business potential for the logistics services, he said. Looking beyond India, Indo Arya is planning acquisitions in the international freight forwarding business, with operations in Europe, South Asia and South-East Asia by mid 2008. "It is time we leveraged the supply chain network internationally, grow with our clients and go global," said Arya.

By 2010, it plans to bring an IPO to fund its Rs 200 crore expansion plans to open RDCs in cities like Kolkatta, Chennai and Mumbai with a total space of 1 million sq ft. In 3 years, Indo Arya has plans to expand its reach to six other cities in India with a 2 million square feet capacity .