snowman logistic

SNOWMAN LOGISTIC

Snowman logistic is the ONLY Company listed on Indian stock exchange that caters to the temperature controlled logistic segment. Snowman logistic was incorporated in March, 1993 as Snowman Frozen foods. Amalgam Foods limited was the original promoter. In 1997, Hindustan Unilever limited acquired 23% stake in the company. As per the current shareholding pattern, the promoter Gateway Distriparks limited has 48.33% share in the company.

Snowman logistic is a TCL (temperature controlled logistic) company. Logistics is the activity of organizing transportation of the goods from the goods is manufactured to the consumption point. Logistics also deals warehousing, grading, packaging etc.

Temperature controlled logistic deals with maintaining & preserving the quality of perishable and temperature sensitive goods. In temperature controlled logistic of goods the most important thing is to maintain the desired temperature of the goods thru blast freezers & industrial A/Cs. Continuous maintaining & monitoring the desired temperature is must. Temperature controlled logistics include warehousing & distribution. In warehousing, maintaining the temperature of the perishable goods by blast freezers and refrigerators to ensure the quality of the goods is maintained.

Distribution involves transportation of the temperature sensitive products via trucks trains vans etc in desired temperature to maintain the quality and freshness of the products.

TCL involves high capital expenditures and operating expenditures. Installing the equipment for the controlled conditions in terms for air flows, temperature moisture etc involves huge capital expenditure. Continuous working of the equipments on electricity & fueling of the vehicles adds highly to the operating expenditure.

TCL industry is very technical in nature. Moisture level, air flow requirement, humidity level etc. lack of knowledge can diminish the quality of the goods.

 Products delivered via temperature controlled logistics are -:

Vaccines

Ready to eat

Chemicals

Flowers

Dairy & poultry

Seafood

Ice cream & chocolates

Fruits & vegetables

Spices

Snowman logistic is into temperature controlled warehouses and distribution services. Our company has a concept of source to stores i.e. comprising of warehousing, primary distribution and secondary distribution and value-added services including labeling, sorting and bulk breaking. Our company has 21warehouses strategically build. With a 175 leased and 63 owned, helping in operations. Distribution services comprise of primary and secondary transportation. Door to door service, inter-city delivery, cargo delivery is part of primary distribution. Secondary transportation comprises of deliveries to QSRs (Quick service restaurants), retail outlets and hotels.

The competitive strength that I believe snowman has over its competitors-

Ability to cater services all over India- Snowman logistic has strategically built all its 21 warehouses spread across 13states to minimize the time of transportation using minimum fuel costs. Snowman has a fleet of 238trucks with ability to cover more than 200 cities.

Technology plays a vital role in the operations of the company- The warehouses are equipped with pallets racking & tracking system. A real time data logging system helps to monitor the temperature variations whether the pallets are in trucks or warehouses. All the trucks are equipped with GPS and GPRS devices helping in tracking of the trucks for faster movement of the goods.

Asset lightness- Where companies invest lot in building warehouses, while snowman has invested in asset-light model i.e. leased land and vehicles helping in easing the capital expenditure.           

Quality is important- Of our 21 temperature, controlled warehouses 18 are ISO 22000 certified temperature controlled warehouses, 18 are ISO 14001 certified temperature controlled warehouses and 21 are FSSA certified temperature controlled warehouses. Company uses a matrix helping them to recognize the products that cannot be stored together. Data logging system helps to track temperature variations, enabling to address any concerns.

Core vendor- Snowman objective is to evolve from being just a vendor to core vendor to fast growing customers of the business.

Strong customer base- Snowman caters to its clients across different sectors such as dairy, poultry, ice cream and many more. Hindustan Unilever, Mccains pvt limted, kwality walls, Ferrero India limited, etc avail snowman services.

Future Strategy -

To increase revenue from Value added service- To increase the profit margins company is expanding its range of services offered to its customers such as pre-cooling, ripening and processing of fruits and vegetables in addition to already existing services such as cleaning, grading, sorting, cutting and packing of fruits and vegetables.

TCL warehouses in food parks- With governments initiative of setting up of food processing units with efficient logistics. Company is evaluating to set up warehouses in the food parks for the processing of fruits & vegetables.

Increasing market share with increasing presence in tier 1 &2 cities- With increasing consumer demands from tier 1 &2 cities on quality food and spending power on QSRs, frozen food etc. Thus, expanding to these cities will help to grab the business opportunities.

Currently-

Watch out for snowman logistic as it has corrected from its high of Rs115 and now trading at Rs58. With government focusing on setting up food processing units and 100%FDI in the sector will have a huge boost to snowman logistic which is the market leader in the organized temperature controlled logistic sector in India. Recently the company has completed the construction of the Jaipur warehouse pallet handling capacity of 4200, taking the total pallet handling capacity to 98500.

Business viability of the snowman is also sustainable as it has leased on the core assets and going forward packaging and TCL industry will grow as mean population age of India is 24-28. Adding to it, rural population residing is more than 65%, which will decrease, and urbanization population increasing. Demand of packaged product going to increase as PDI has increased.