According to the estimates by Investment Information and Credit Rating Agency of India (ICRA), India’s logistics sector will grow at a compound annual growth rate (CAGR) of 10.5 per cent through 2025. As the focus shifts to tech-enabled operations, riding on exponential growth in the retail and e-commerce segment, warehouse automation, robust infrastructure and a liberal policy environment, Aaron Jones, CEO and President, Bastian Solutions – a Toyota Advanced Logistics company, shares with DH’s Lavpreet Kaur, his thoughts on the country’s potential in the logistics and warehousing scenario and how his company intends to tap into it. Excerpts from the interview:
What is your reading on the Indian logistics market and how has it evolved?
I think this market is poised for success and growth. India has population growth, lack of space, and availability of a strong engineering discipline. When you put those things together, you have just an opportunity like no other country in the world.
What are the gaps in logistics and warehousing in India?
The biggest gap that remains is the comfort level with certain pieces of new technology. Dense storage, automated storage and retrieval systems are particularly the types of technologies that have not taken off yet in India, specifically for e-commerce and retail markets. They have become a standard in the US and Europe and this is where we’re putting our eggs or eggs in this basket, it’s gonna be huge.
What are some of the primary sectors that Bastian is focusing on?
We are a very diversified business amongst all sectors. But I think we’re seeing the biggest growth in e-commerce. Distribution of products within the city is always a big challenge. What we’re seeing now is some markets can have four to five distribution centers within a city.
What are the potential challenges faced?
What our company, right now, is trying to address, is manufacturing in India. That is one of our challenges. When you go back over our 70-year history, as a company, we are not known as a manufacturer. We are known as an independent integrator. What we’re focused on, right now, is manufacturing some of the advanced technologies here first, for this market and other parts of Southeast Asia.
Where does India stand in your overall sales profile and what is the year-on-year growth seen in India?
The Indian market in any given year is 5-10 per cent of our overall business. CAGR has been 40-50 per cent a year here.
What are your expansion plans for India?
As a company, we have had a 20 per cent CAGR for the last 30 years and India has been two and a half times that. I see a tremendous amount of growth in each of our segments- software controls, R&D functions, mechanical design, and electrical design. It is not unreasonable for us to grow 100 per cent a year. From a tech standpoint, it’s all in Bangalore, and even our next facility, the third one is going into Bangalore.
What are your recruitment plans for your facilities in Bangalore?
It is a cross-functional team that we need. We are looking for many skill sets for software- there are at least six to seven opportunities for freshers out of college as it is a big one for us for recruitment. Controls and electrical engineering are another big aspects. We are expanding our consulting teams, so we are looking for industrial engineers that have experience in data analytics. We also have opportunities for technical salespeople.
How big is Bastian's business? What are your targets, going forward?
As a leading material handling system supplier, we have consistently ranked within the top 20 globally and have experienced steady growth in revenue. Our revenue achievements have often exceeded our targeted revenue- a minimum of 70 per cent and some years surpassing 100 per cent. In FY22, our global revenue reached $644 million, and we are confident that this year will bring even more growth. India is a key contributor to our business and processes a large part of this business.