The Hindu Business Line : Hatsun plans rural retail foray

No-frills outlets
The retail outlets would be ‘no-frills’ outlets in the heart of every village where the company has its milk collection centres.
The company can operate these with minimum overheads to provide household goods at low margins to the farmers.

R. Balaji

Chennai, May 21 Hatsun Agro Product Ltd, a leading private-sector dairy company, has decided to set up a retail chain in rural areas.

According to Mr R.G. Chandramogan, Chairman and Managing Director, Hatsun Agro Product Ltd, the company will set up retail outlets at the 5,000 milk collection centres it has established across South India. There is spare space — cumulatively about 4 lakh sq ft — and manpower in these milk collection centres that would be used to stock and sell a range of commonly-used products such as readymade garments, textiles and household utensils.

The retail outlets would be ‘no-frills’ outlets in the heart of every village where the company has its milk collection centres. The company can operate these with minimum overheads to provide household goods at low margins to the farmers, he said.

Over 1.2lakh dairy farmers visit the milk collection centres daily in the mornings and evenings, when for two hours the company staff work to collect the milk delivered by the farmers.

Each rented centre has about 80 sq ft of spare space, the company’s trucks move daily between the processing centres and milk collection centres moving milk.

Hatsun can exploit the space, logistics infrastructure and human resources optimally for retail business.

According to Mr Chandramogan, for the average retailer these three resources account for about 20 per cent of the business expense but for Hatsun, which has them with spare capacities, the business would be “zero-expense retail.” The company has tried the retailing business in 100 centres in Tamil Nadu and found it “overwhelmingly attractive,” he said.

The Rs 850-crore company procures over 16 lakh litres of milk daily and markets liquid milk under the brand names Arokya and Komatha. It also sells a range of branded dairy products and manufactures and markets ice creams under the flagship brand Arun Ice Creams.

More Stories on : Rural Marketing | Retailing | Dairy & Dairy Products

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