The Hindu Business Line : Aditya Birla Retail plans Rs 9,000-cr rollout

TALKING RETAIL: Mr Kumar Mangalam Birla, Chairman, Aditya Birla Group (right), and Mr Sumant Sinha, CEO, Aditya Birla Retail, at a press conference in Mumbai on Friday. — Paul Noronha

Mumbai May 18 The Aditya Birla group will invest up to Rs 9,000 crore over the next three years in a pan-Indian chain of supermarkets and hypermarkets under the `More' brand name.

"We intend to be among the leading players in India," Mr Kumar Mangalam Birla, Chairman, told presspersons on Friday.

Aditya Birla Retail will compete with the other large industrial groups such as Bharti and Reliance Industries, which have announced plans to invest, over time, Rs 10,000 crore and Rs 25,000 crore respectively in their retail ventures.

The first few of its planned 1,000 supermarkets will open in Pune by June.

"How many hypermarkets we may open, that we will play by ear," said Mr Sumant Sinha, who heads the company.

The company already operates 50,000 sq ft of retail space it acquired from the buyout of Trinethra Super Retail, a South-based chain of retail stores, earlier this year.

The funds for the retail venture will be raised through a mix of debt and equity.

"We have a vibrant equities market," said Mr. Birla, adding that it was a generic comment since retail companies worldwide have easy access to capital markets. "But we don't think we need to do that."

None of the group's listed entities has invested in Aditya Birla Retail either, he added.

The group's listed entities are Grasim Industries, Hindalco, UltraTech, Aditya Birla Nuvo and Idea Cellular.

The various holding companies in the group will be the promoters of Aditya Birla Retail, according to analysts. But investment details were not disclosed.

Aditya Birla Retail does not intend to have a joint venture partner, as the group has the necessary competencies in-house, said Mr Birla.

The supermarkets would be neighbourhood stores catering to daily and weekly household shopping needs of customers, while the destination hypermarkets would cater to monthly shoppers and event-based needs.

The company would build linkages with farmers and architect supply chains to connect households more directly to farmers, a statement said.

Apart from Mr Sinha, two expatriates have been recruited to head the supermarket and hypermarket ventures.

They are Mr Andrew Denby, who has experience across the UK and South-East Asia, and Mr Russell Berman, who has experience in China.

The company already employs 4,000 people and will have 10,000 employees within a year, said Mr Sinha.

Mr Birla refused to comment on the issue of the recent protests against corporate retail activity in some States. Local traders had taken out protests against corporate retail stores resorting to price undercutting.

The group would not have to contend with the FDI issue since it does not intend to have a partner, foreign or otherwise.

Bharti, which has signed an MoU with Wal-Mart for its retail venture, has faced a lot of opposition in this regard.

Bharti, however, has said that the front-end stores would be operated by itself, and only the wholesale activities, cold chain operations and logistics by the joint venture with Wal-Mart.

FDI in multi-brand retail activity is currently not allowed in the country.