CHENNAI: Godrej Enterprises Group's Storage Solutions business is planning its next phase of growth around Chennai, banking on India's warehousing boom even as the ongoing West Asia conflict has led to a sharp decline in export order inflows.
The company, which set up its manufacturing facility in Chennai in 2001, is evaluating locations near the city for a new plant.
"Since this is our base, our knowledge remains here. Our preference is within the vicinity of Chennai. Could be 50, 60, 100 kilometers, but this is the vicinity," Vikas Choudaha, Business Head, Storage Solutions, Godrej Enterprises Group, told the media here on Thursday.
He added Tamil Nadu's supportive industrial ecosystem, coupled with proximity to the port, continues to make the state an attractive manufacturing destination. The Chennai facility has grown alongside India's logistics sector and is today among the largest of its kind. "By far, this facility would be one of the largest facilities I have seen in Asia,"
Choudaha said, adding it commands more than one-third of the organised storage solutions market.
The Rs 1,500 crore company has been a direct beneficiary of the transformation in India's warehousing landscape, driven first by GST and later by the explosive growth of e-commerce and quick commerce. "We did India's largest warehouse in Calcutta for one of our e-commerce clients. Similarly, following that success, we also did one large warehouse in Saudi Arabia in 2024 for another global e-commerce giant," he said.
It also acquired a Bengaluru-based company in 2024, now operating as Godrej Intralogistics Private Limited.
Though the company's exports account for 25 per cent, the West Asia conflict has started to weigh on demand. "We have at least seen a 30-35 per cent drop in the last two months itself," he said, referring to order inflows from the region.
He drew a contrast with the COVID years, when operational challenges were severe but demand was booming. "The COVID experience was tough from an operations point of view, but it was big from a demand point of view," Choudaha said, noting that the rise of e-commerce created unprecedented demand for warehouses. "Right now, running operations is not a challenge, but demand side..." he added.
To offset the slowdown in West Asia, it is shifting its focus towards Asia-Pacific markets. "We are now focusing a little bit more on the Asia Pacific markets rather than looking at the Middle East. Countries like Philippines, Indonesia, even Singapore to some extent, Vietnam, Australia," he said.
Despite the geopolitical uncertainty, the Storage Solutions entity remains bullish on the domestic opportunity. It expects the sector to continue growing at 10-12 per cent annually over the long-term.