THE INDIAN arm of German retail behemoth Metro Cash & Carry will be launching its operations in Punjab soon, even as others are waiting in line.
Metro Cash & Carry India is likely to invest Rs 600 crore to start its chain of distributioncum-retail centres in the state, beginning with units in Chandigarh, Jalandhar, Ludhiana and Amritsar by the second quarter of this year. Another chain, Tata Chemicals’ Khet-Se Agriproduce India, too, is expected to get its clearance for its Rs 90-crore project, to be implemented in two phases.
“These ventures will result in creation of 2,700 jobs for local youth and impart training in modern management practices. Besides sourcing vegetables, fruits and other fresh items directly from local farmers, thereby eliminating the middlemen, the company is committed to work along the entire agriculture supply chain to build direct supply sources, reduce wastage levels and help farmers realise better financial value for their produce,” said Metro Cash & Carry India’s managing director Martin Dlouhy.
Metro circles said each store would offer direct employment to 300 people. An additional 150 people will get employment indirectly per store.
“One of our main efforts here in India is improving the entire supply chain. Over 95% of the range of products offered to our business customers is going to be sourced from India,” said Mr Dlouhy, without mentioning the commodities to be procured from Punjab and adjoining states.
The stores, to be spread over 1 lakh to 1.5 lakh square feet, would be built over 7 acres. The company is procuring land in Punjab. “Our preference is to buy land; however, we also consider long-term lease (eg 99 years). Real estate price or lease conditions are very important for us as our business model is based on low margins and low costs. And this is still the major problem for us in India,” said Mr Dlouhy.
According to government officials, the company will set up distribution centres at Mohali, Patiala and Bathinda in the second phase, which will provide over 18,000 items — both food and non-food — to kirana stores, hotels, restaurants and businesses in Punjab.
According to Khet-Se Agriproduce India Pvt Ltd CEO GR Goves, the company plans to set up its first distribution centre(DC)-cum-CPPC (collection cum primary processing centre) in Malerkotla, primarily to serve Ludhiana and also other adjacent cities. “In Ludhiana, we plan to open two cash and carry stores which will be franchised outlets. Later, we also propose to open centres to service Amritsar, Jalandhar and Chandigarh,” he said. The Tata Kisan Sansar network already present in Punjab, apart from doing contract farming with farmers, will also provide them with good quality seeds, advise them on agricultural practice and superior soil inputs.
With an amendment likely to the Agricultural Produce Marketing (APMC) Act to allow private sector firms to procure farm produce directly from farmers rather than buying from a government procurement agency, more players will enter the market.