Comments
Heritage Foods Ltd may consider hiving off Heritage Fresh, its retail format network, into a separate arm after it manages to break even by next year.
The company is in the process of consolidating its retail format business, expanding and revamping its network and stores.
M. Sambasiva Rao, President of Heritage Foods Ltd, said that the company is currently in the investment phase of the retail business and expects to break even by next financial year. The retail division closed with a turnover of Rs 326.57 crore in 2012-13.
“Once we manage to break even, we will consider hiving it off into a separate entity. This will enable the company to attract strategic partners and investments. We had made our intentions clear about this strategy. The investments will come as we consolidate the business,” he said.
The company has set up 67 stores, mostly in Chennai, Bangalore and Hyderabad, offering vegetables, fruits, staples and other consumer items. The average store size is about 3,000 sq ft. The focus now is on increasing the store size to about 8,000 sq ft. From about 2.15 lakh sq ft, the company plans to increase this to about 5 lakh sq ft by next year. We believe we are in the investment cycle of business. All the stores are company managed. We did not want to take up the franchisee mode as it might dilute the company brand approach, Rao said.
The company is setting up a 2-MW solar power project in Medak district to meet the power requirements for the integrated fruit, vegetable and staples processing centre. The retail business is supported by integrated agri-business division.
“The market is under penetrated. We will seek to spread our presence in Chennai, Bangalore and Hyderabad. We are also looking at more stores in the ‘high streets’,” he said.
The company had funding from Kotak India Fund which exited later. Azim Premji Debt Fund had picked up stake from the market towards the end of 2012.
“The country’s retail sector will grow as the income level in the country goes up,” he said.
rishikumar.vundi@thehindu.co.in
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.