Metro Cash & Carry plans Rs900-crore investment in Punjab
04 Dec 2008
Kolkata: German wholesale retailer, Metro Cash & Carry, which had a presence in Hyderabad, Bangalore and Mumbai has now opened an outlet in Kolkata.
The retailer's future plans include having a presence in North India and tying up with financial institutions in India to offer credit facilities to customers, which include restaurants, hotels, kiranas and miscellaneous traders.
In order to have a presence in Northern India Metro will set up six distribution centres in Punjab with an investment of Rs900 crore.
Martin Dlouhy, managing director of Metro Cash & Carry, India, said Metro planned to enter Punjab now though he did not lay out the time frame of the entry.
Last year, the retailer procured products worth €60 million from different states of India.
The retailer says it is scouting for consistent and reliable suppliers and would not hesitate to take their products to the international arena. Mango and pineapple suppliers would be its first choice.
Metro is going ahead with plans to offer credit lines to customers. For this it has tied up with SKS Microfinance to roll out such a pilot initiative among kiranas in Hyderabad and is evaluating the possibility of scaling up this initiative across consumer segments, especially since many are feeling the heat of the economic slowdown.
Metro Cash & Carry International regional operating officer (Asia) James Scott said in Kolkata at the opening of Metro's first wholesale centre, ''We wish to be close to our customers and support them since many are increasingly getting affected due to the economic situation,'' he said.
Scott said Metro would play the role of a facilitator in such credit arrangements for customers. He said Metro would tie up with third-party financial institutions who will offer such financing.
He said that in its kirana training programmes, Metro is already providing inputs on how to seek finance support.
Metro Cash & Carry operates mom-and-pop retailer support programmes in countries like Poland and Turkey and such possibilities may be implemented in India also. He said the retailer was looking at India as a major market for long-term growth.
In India Metro would invest in more stores in states where it already as a presence and would follow the same business to business model.
Metro has more than 600 centres in 29 countries.
In Kolkata, the Forward Bloc-controlled agricultural marketing board had refused to issue a licence to the wholesale major till a few months ago. Later, it agreed to give the nod with certain conditions attached, enabling Metro to sell to only those traders who have APMC licences.
Also though it can purchase products from private markets or regulatory marketing committees, it has to pay one per cent market fee while selling the produce.
It also barred on doing contract farming and can only follow the business-to-business model with traders.
Also, in case of a legal dispute, it must be sorted out in a court of law within the state.
Metro has already trained 350 persons to work in its outlet Kolkata. According to its officials, the wholesale centres are open exclusively for business customers, all of them duly registered and provided with customer identification cards.
