International Finance Corporation (IFC), the private sector investment arm of the World Bank Group, is lending $2.8 million to cold chain services firm Snowman Logistics Ltd. The funding will be used to part-finance the company’s expansion in warehousing capacity across new locations, as per a disclosure.
Bangalore-headquartered Snowman provides temperature-controlled storage services to a number of industries. It has an aggregate capacity of 33,400 pallets spread over 18 locations and operates a fleet of 158 reefer vehicles.
The company proposes to set up storage facilities at two new locations in Orissa and Gujarat. The estimated cost of the project is approximately $4.4 million and IFC plans to pitch in with $2.8 million.
This is the second time when IFC is providing debt finance to Snowman. Last year, it lent $6.5 million to Snowman, which followed an equity investment by IFC in the firm over three years ago.
Snowman was initially promoted by the Amalgam group in 1997. Subsequently, three Japanese companies (Mitsubishi Corporation, Mitsubishi Logistics Corporation and Nichirei Logistics Group) acquired a significant stake in Snowman.
In November 2006, Gateway Distriparks Ltd acquired a majority stake in the firm and currently holds 53 per cent stake in Snowman. Other major shareholders – Mitsubishi Corporation, Mitsubishi Logistics Corporation and Nichirei Logistics Group – together own approximately 26 per cent stake while IFC holds 19.9 per cent stake.
Other private equity investments in the cold chain logistics players include Swastik Roadlines (India Equity Partners) and JICS Logistics (IL&FS Private Equity). Also, IDFC Private Equity invested in Staragri Warehousing and Collateral Management Ltd, which plans to foray into cold chain.
(Edited by Sanghamitra Mandal)