Central Warehousing Corporation (CWC), a central public sector undertaking, has made significant strides in capacity generation and business diversification. It started out with seven warehouses in March 1967, but today it runs 485 warehouses across the country, with close to 105 lakh tonne storing capacity for agriculture and non-agriculture items. CWC also runs 37 container freight stations and operates container trains between Loni, near Delhi, to JN Port in Mumbai The company?s financial performance remains robust despite strong competition from private players. CWC managing director BB Pattanaik talks to FE?s Noor Mohammad about the company?s growth strategy in a free market environment: Excerpts:
Private players are getting into warehousing business in a big way. Do you have a strategy in place to compete against private players?
Do have plans for further capacity expansion?
CWC is working on its plan to expand its warehousing capacity to 1.87 lakh tonne by the end of the current financial year and further up to 2.13 lakh tonnes by March 2012. Besides, we are also building 5.82-lakh-tonne storage capacity under the PEG-2009 in Gujarat, Maharashtra and Kerala. The bulk of this additional capacity is meant for storing foodgrains. We also plan to start container trains on new lines and expand our supporting infrastructure business for export-import.
How does CWC help farmers with storage?
We provide storage facilities for all kinds of agricultural commodities, including rice, wheat, maize, jowar, bazra, pulses, oilseeds, jute, cotton and seeds. That helps farmers protect their output against possible damage from insects, fungi and moisture. We encourage farmers to use our warehousing facilities by offering them a 30% rebate on standard CWC charges.
Farmers usually store their produce to sell later when the price is high. Our storage facilities help farmers minimise their post-harvest output loss. We also issue warehouse receipts to farmers against their stored produce, which they can use for availing institutional credit.
To educate farmers about storage and preservation of stocks at the farm level and reduce avoidable storage losses, CWC operates its farmers extension service scheme (FESS). Our technical personnel posted at various warehouses visit their nearby villages and train farmers in post-harvest technology. As of now, this service is being provided through 275 rural warehouses under the scheme.
How is CWC?s container train business doing?
We have a category-I licence from the Indian Railways to run container trains pan-India. As of now, we are running container trains between Loni near Delhi and JN Port in Mumbai. Besides, we are operating container rail terminals at Loni and Kalamboli under the public-private partnership model. Other train operators are also using these terminals as common user facility.
We are operating 15 railside warehousing complexes, spread all over the country and having a capacity of 2.5 lakh tonne, through our subsidiary Central Railside Warehouse Company Ltd. We are also building such complexes at places like Mysore and Dankuni in Kolkata with capacity of 38,000 tonnes. Meanwhile, capacity of the existing railside warehouses at Agra, Pune and Chennai is also being expanded by 34,200 tonnes.
Do you have any further plans for business diversification?
Yes, we have drawn up plans to get into cold chain logistics.
How has been CWC?s financial performance in recent years?
CWC is consistently making profit. All operations of the company and its expansion plans are financed out of its internal accruals, without depending on any budgetary support. Our profit after tax (PAT), which was Rs 70.62 crore in 2005-06, went up to Rs 130.52 crore in 2009-10. Our profit before tax (PBT) rose from Rs 106.95 crore to Rs 163 crore during the same period. CWC?s turnover grew from Rs 619.5 crore in 2005-06 to Rs 987.95 crore in 2009-10.
