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ARYA COLLATERAL WAREHOUSING SERVICES PVT. LTD. Agri-Warehousing in India September 8, 2015

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Page 1: September 8, 2015. About Us Established in 1982 The first Collateral Management Company incorporated in India Trusted Partner of Multiple Banks, Agri-Corporations,

ARYA COLLATERAL WAREHOUSING SERVICES PVT. LTD.

Agri-Warehousing in India

September 8, 2015

Page 2: September 8, 2015. About Us Established in 1982 The first Collateral Management Company incorporated in India Trusted Partner of Multiple Banks, Agri-Corporations,

About Us

Established in 1982

The first Collateral Management Company incorporated in India

Trusted Partner of Multiple Banks, Agri-Corporations, Commodity Exchanges and Multilaterals

Team with rooted experience in Agriculture, Banking and Commodities

Operations across 16 States managing 400+ warehouses with AUM of Rs.15.00 Billion

Page 3: September 8, 2015. About Us Established in 1982 The first Collateral Management Company incorporated in India Trusted Partner of Multiple Banks, Agri-Corporations,

Indian Agri-Storage Scenario

49%51%

74%

26%

Present Capacity Gap in Capacity

WarehousingRequirement : 135.0 Mn MT

Cold StorageRequirement : 61.0 Mn MT

Source : Planning Commission Report

Page 4: September 8, 2015. About Us Established in 1982 The first Collateral Management Company incorporated in India Trusted Partner of Multiple Banks, Agri-Corporations,

A step deeper – Commodity Flow & Implications

Primary Production Centers• Farmgate• Home to smallholders

Secondary Centers• First level trading hubs• Small Mandi centers• Kachha Adatiyas

Tertiary Trading Centers• Trading hubs• Large Mandis• Home to traders

Page 5: September 8, 2015. About Us Established in 1982 The first Collateral Management Company incorporated in India Trusted Partner of Multiple Banks, Agri-Corporations,

A step deeper – Commodity Flow & Implications

Primary Production Centers• Farmgate• Home to smallholders

Secondary Centers• First level trading hubs• Small Mandi centers• Kachha Adatiyas

Tertiary Trading Centers• Trading hubs• Large Mandis• Home to traders

Most storage located here

Most Banks located here

Largest beneficiary - Traders Largest storage gap

Very limited access to finance

The producer neglected

Page 6: September 8, 2015. About Us Established in 1982 The first Collateral Management Company incorporated in India Trusted Partner of Multiple Banks, Agri-Corporations,

A losing battle for smallholders

Harvest Season

Page 7: September 8, 2015. About Us Established in 1982 The first Collateral Management Company incorporated in India Trusted Partner of Multiple Banks, Agri-Corporations,

ARYA: Learnings and Experiences

Distress Sale• Ex

ploitation

Glut in Market

• Prior obligations

• Low Prices

Harves

t Season

Farmer

The approach to be market driven – Create an ecosystem

Focus on what exists than on creating new

Size agnostic warehousing model

Leverage the power of aggregation

Page 8: September 8, 2015. About Us Established in 1982 The first Collateral Management Company incorporated in India Trusted Partner of Multiple Banks, Agri-Corporations,

Our Approach

Warehousing

Finance

Integrated Model

Market Linkage:

Exchange

• Warehouses at farm centers for Storage

• Finance availability from Banks at Warehouse

• Tie-up with Commodity Exchange and Corporates for Sale

Distress Sale• Ex

ploitation

Glut in Market

• Prior obligations

• Low Prices

Harves

t Season

Farmer

Page 9: September 8, 2015. About Us Established in 1982 The first Collateral Management Company incorporated in India Trusted Partner of Multiple Banks, Agri-Corporations,

Typical Challenges in Implementation

Primary Production Centers• Farmgate• Home to smallholders

Secondary Centers• First level trading hubs• Small Mandi centers• Kachha Adatiyas

No Warehouses available

No Banks in vicinity

Limited scale reduces efficiency

Page 10: September 8, 2015. About Us Established in 1982 The first Collateral Management Company incorporated in India Trusted Partner of Multiple Banks, Agri-Corporations,

Warehouse : Changing lenses

Warehousing

Finance

Integrated

Model

Market Linkage:

Exchange

Page 11: September 8, 2015. About Us Established in 1982 The first Collateral Management Company incorporated in India Trusted Partner of Multiple Banks, Agri-Corporations,

Other storage options

Warehousing

Finance

Integrated

Model

Market Linkage:

Exchange

Air Warehouses

Field Silos

Page 12: September 8, 2015. About Us Established in 1982 The first Collateral Management Company incorporated in India Trusted Partner of Multiple Banks, Agri-Corporations,

How does it work

Farmers

Produce

Warehouse

Farmer Market-Bank Linkage

Producer Company

(FPO)

Aggregates stocks of members

Spot Exchange

OR

Agri-Corporate

Facilities at Warehouse:• Grading and Sorting• Price Information• Finance

Bank lends to farmers

Farmers repay to Bank as per agreed mechanism

Suggest on Commodity

Suggest on DocumentationSuggest on Process

Certify Quality & QuantityManage Warehouse

Overall execution

Formation of FPOs

Assistance on DocumentationBusiness Planning

Corporate Governance

Page 13: September 8, 2015. About Us Established in 1982 The first Collateral Management Company incorporated in India Trusted Partner of Multiple Banks, Agri-Corporations,

Policy Support

Appropriate balance between Food Security and Market Oriented Agri development

Consistent policy – Warehousing & Producer Organisations

Regulator - More practical guidelines

Page 14: September 8, 2015. About Us Established in 1982 The first Collateral Management Company incorporated in India Trusted Partner of Multiple Banks, Agri-Corporations,

Thank You