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‘Great growth potential for logistic sector in Kerala’ - 2012-06-25

Logistics sector has a lot of growth potential in Kerala. However, due to various reasons, no serious efforts are being made to tap this potential. Now, the government and the private sector are coming together to identify the problems that are hindering the logistic sector growth. As a part of this initiative, a two-day international conference on ‘New trends in Logistics’ is being organised jointly by the State government, Kerala State Productivity Council and private sector players. Falcon Infrastructures Ltd, operators of the first private sector container freight station in Kerala, is one of the parties associated with the new initiative. Mr N.A. Mohammed Kutty, Managing Director, Falcon Infrastructure, spoke to Business Line on the potential of the sector in the State and its problems. Experts:

What are the emerging opportunities in logistics sector in Kerala?

With the commissioning of Vallarpadam Terminal, Kerala has tremendous opportunities in logistics industry especially by establishing free trade warehousing zones (FTWZs). FTWZs enable the importers to store stocks for a longer period of up to two years without paying any duty and can re-export after some value addition. Considering the geographical advantage and the proximity to international maritime routes, Kerala can certainly emerge as the right logistics hub of the southern states. The ICD's of Hyderabad, Bangalore and Coimbatore can have a better connectivity and become more economical, when Vallarpadam Terminal becomes fully operational. The distance from Chennai to Bangalore and Hyderabad is almost the same and additional expenditure on transhipment through Colombo can be saved, if transhipment takes place from Vallarpadam.

What do you expect the state Government to do?

The State Government can do a lot for the development of this sector. The development of the available basic infrastructure facilities should be the main focus.While the other service sectors such as tourism, health care, education, IT and ITES, shipping etc. have specific ministries and departments, the logistics sector is left uncared for, despite its critical importance to the growth of other sectors and the overall economy. The Government should consider the possibility of forming a dedicated ministry for logistics to drive grwoth in the sector.

Why logistics industry had not taken off as expected even after the commissioning of Vallarpadam Terminal?

Vallarpadam is considered as a transhipment terminal with SEZ status and an alternate facility to Colombo and Singapore for transhipments. The existing Cabotage Law is a major hurdle to the projected development of Vallarpadam, as foreign vessels cannot operate containers within the Indian ports. The long delay at Valayar check post for clearance of the export cargo especially garments from Thirupur is another cause for which the State Government should provide a fast track clearance facility with a separate counter for export cargo.

As a pioneer in the logistics industry in Kerala, what has been your experience ?

Pioneers always suffer a lot to thrive and establish, especially when you choose to implement projects with innovative and unique ideas. For them there are also no case studies to refer.

What are your new projects?

Falcon's Integrated Logistics Hub near Kochi was the first of its kind in the country and still the only one that offers fully integrated logistics services including CFS. Now, our aim is to set up the first FTWZ at Kochi. We are in the process of acquiring land near Cochin International Airport for the purpose.

Source : Hindu Business Line