Fung Capital invests $30 mn in Future Logistics

Future Group’s logistics and supply chain vertical has received a $30 million private equity placement from Fung Capital. The latter is a private equity investment arm of the families of Dr Victor Fung and Dr William Fung, the controlling shareholders of the Li & Fung Group. With this investment in place, Future Group is now looking to rename the subsidiary as Future Supply Chain Solutions (it was earlier called Future Logistic Solutions Ltd). The subsidiary was instituted in 2007.

The PE money will be used for the enhancement of the logistics infrastructure of the company, strengthening of the technology platforms and expansion of the supply chain network of the company. It operates 30 distinct supply chains and the company currently services over 1,100 retail outlets across India, managing more than 2.6 million SKU's from a warehousing network spread over 3 million sq. ft. in 30 major centers in India and a fleet of over 500 vehicles plying across the length and breadth of the country.

“We hope to offer global expertise in building the next generation logistics solutions for the Indian consumption sector, improve supply chain efficiencies and bring down costs for consumers,” said Kishore Biyani, Group CEO, Future Group.

According to Anshuman Singh, CEO, FLSL, the company is building a world class supply chain infrastructure for the consumption products in India which is presently very limited, despite it being a critical support required in India’s rapidly growing economy. “We will be investing in physical as well as technology infrastructure that will reduce the time-to-market and cost-to-market for fashion and apparel and other consumer categories,” he said.

The Indian logistics market is estimated to be about $100 billion, with the share of organised players being just 6% of the total market. The logistics sector has been seeing substantial investments lately and the organized segment is expected to grow at 25-30% CAGR over the next few years. The consumption product supply chain is estimated to be around 20% of the logistics market and is at a nascent stage. Future Group’s logistics vertical hopes to capture a dominant share in this segment as a Third Party Logistics (3PL) service provider.