According to recent reports, the global warehouse automation market is expected to grow to $19.5 billion by FY25. How do you strategise your company’s objectives toward this development?
The number of warehouses is increasing rapidly worldwide with the increasing growth in the manufacturing sector, retail & e-commerce. Along with this, the capacity & size of the warehouses are also increasing to a greater extent. Last year, Godrej Körber secured a significant order from a leading Indian multinational paint manufacturer for setting up an automated warehouse for manufacturing paints in Uttar Pradesh.
Our company will consider customer satisfaction at the core of its business strategy helping us to introduce new solutions to our existing customers.
How are you enhancing your company’s portfolio with the joint venture of Godrej & Boyce with Körber AG?
As Asia is emerging as a growth engine for supply chain automation, a joint venture between Godrej & Boyce and Germany-based Körber Supply Chain has pioneered the role of intralogistics across different sectors by offering differentiated automation solutions. Körber, as a business, has decided to focus on investments in Asia to bring the latest global technologies into the Indian market. The partnership between Godrej & Boyce and Körber will enable us to work together to develop and grow warehouse automation in India.
India, being a key market and having a plethora of scope, we are targeting to grow at a CAGR of over 18% between 2023 – 2025, by opening new market sectors and penetrating in cold chain, retail & e-commerce industry.
How are you conquering supply chain complexities across sectors in India?
One of the most immediate commercial effects of COVID-19 was consumers’ shift to online shopping, resulting in a surge in demand for e-commerce warehouse & distribution services. Lockdowns and restricted man movement resulted into a huge gap between demand and supply. As a result, warehouses in the manufacturing plants were not able to ship out fast enough.
Factors like elevated freight costs, material fall in global auto production, surging prices of semiconductors, and the intensification of port congestion exhibit a deeper malaise that hinders the growth of the supply chain. In order, to make India an automation hub for the industry, we will invest in the latest technologies through our joint venture with the Körber Supply Chain.
How are you addressing the challenging business situation? How is the business in 2022 compared to previous years?
The key challenges in the Indian manufacturing sector are the high cost of infrastructure and rising input costs including labour costs and skill gap challenges. Poor logistics infrastructure causes delays leading to high inventory costs, and high prices for power & credit inflate the operating expenses. We are designing new equipment to optimise steel construction and high-performance low power consumption with regenerative technology. Both Godrej & Boyce partnership with the Körber Group, have a deep focus on sustainability. So, we are putting this philosophy into our equipment designs also.
In 2021, the warehouse automation market was estimated to witness a growth of almost 38.4% to reach $19.5 billion. According to estimates, the market is expected to grow by 1.5x in the mid-term of 2025 and is further expected to cross $37.6 billion by 2030. Godrej Körber leads the total serviceable market with a 25% market share maintaining its leadership position.
What makes your company’s solutions future-ready?
The automation solutions offered by Godrej Körber are designed with a philosophy of future relevance, scalability, after-sales support, and sustainability. We handle raw materials and finished goods to complete the total intralogistics flow within the warehouse. Hence, we ensure that the raw material reaches the production lines in time and the finished goods reach the warehouse in time, and then the material is dispatched to the customers in time. There is complete visibility of the material movement, handling processes are automated so there is no delay, and the warehouse helps in generating revenue for customers. Our solutions help in eliminating time delays, protecting material damages due to manual handling, and waste elimination.
Given the current market scenario, what would you recommend to industries for investing in smart factories and disruptive warehouse concepts?
We estimate the warehouse automation market in India to be around ₹4000 crores and expect it to grow at a compound annual growth rate (CAGR) of ~12% - 14% by 2025 across different industry segments. This past year, COVID-19 has been transforming the way consumers purchase products. Additionally, demand for faster deliveries of products especially in food, pharma, and other essential goods has peaked across all markets. This has forced companies to rethink and restructure their logistics operations. As businesses look to exploit opportunities to expand their market share, investing in automated material handling solutions is an important step to not just surviving, but also thriving in a highly competitive and fast-changing environment. Technologies like PLC, SCADA, ERP, DCS, HMI, and MES, are considered under the scope.
Going forward, how will your company’s business help contribute to the Indian GDP?
The Indian manufacturing sector accounts for 26% of the warehousing market today. We, at Godrej Körber, are focusing on the manufacturing sector, FMCG, F&B, retail and e-commerce for 2025. We are mainly focusing on the latest intralogistics solutions including the bulk material handling part in the manufacturing sector.
Godrej Körber will target 10 critical value chains which wil add $ 300 billion to India’s manufacturing GDP. The company already has a commanding position in these value chains. All these value chains are in the manufacturing sector, which is growing @ 7%-10%. Our presence is quite deep we will continue to introduce new solutions & technologies to sell to our existing customers. We are looking forward to selling existing solutions & technologies to new customers while diversifying into other allied segments for new blue ocean segments.