McDonald, leading food service retailer, which is present in 19 countries, is planning to set up a processing unit in Punjab.

Vikram Bakshi, joint venture partner and managing director, McDonald India told FE on Monday the processing unit would be commissioned with a capital outlay of around Rs 100 crore. The managing director said Punjab made a logical sense as the state was a major producer of different vegetables needed by McDonald. He said at present the company had only one unit in the country which was located in Gujarat.

Bakshi said the company has so far invested more than Rs 1,000 crore and was planning to invest another Rs 400 crore in next three years on its expansion. “North was a priority area for the company in view of growth witnessed in this region,” he said. He said Punjab was a major source for the company for raw material requirements, including about 600 MT of wheat required annually which was likely to go upto 2,000 MT in next three years. Similarly, huge quantity of potato and vegetables was purchased by the company.

Explaining the expansion plans, Bakshi said McDonald plans to open 10 restaurants in Chandigarh, Mohali and Panchkuka by the end of 2008. The company, which opens its second family restaurant here, has 131 restaurants in the country of which 77 are in northern and eastern regions and 53 in southern and western regions. He informed that at present there were 5 McDonald restaurants in Punjab, 11 in Haryana and 2 in Chandigarh. He said the focus area for the company was now to open restaurants on the highways and in tier I and II cities.

The managing director informed that at present the company sources about 90% of total raw material requirement locally but in next three years, McDonald would source 97% of requirement locally. He said there was need to produce quality potato in the country for items like French Fries. McDonald for potatoes largely depend on imports from Holland. Also there was need to set up a cold chain for which the company had sent suggestions to Prime Minister Manmohan Singh as it involved huge investment.