Even as India’s largest business conglomerate Reliance Industries is facing trouble over its retail venture over procurement of farm products, its competitor Aditya Birla Retail Ltd, the retail arm of the $23-billion Aditya Birla Group, is trying to overcome the hurdles by tying up with farmers’ cooperative societies.
The company, that has set a target of establishing 1,000-1,500 supermarkets and has earmarked Rs 8,000-9,000 crore in the next five years, is planning to tie-up with cooperatives to procure fresh farm products, vegetables and fruits.
“We are talking with some of the major cooperatives. They (cooperatives) have come to us,” said Sanjay Badhe, senior vice-president of Aditya Birla’s new retail initiative ‘more’.
Meanwhile, the company has also gained access into farm sector by establishing direct links with farmers. Currently, it has around 25 collection centres across the country to procure farm products directly from farmers, said Sumant Sinha, chief executive officer of Aditya Birla Retail.
“Farmers know what we want to buy. They come to collection centres and sell to us. We are also looking into more closer linkages with them, in terms of working with them, to help them with respect to crop planning, provide them seeds and equipment etc,” Sinha said. He also said the company would increase the number of collection centres ‘quite rapidly’ in future as the volumes grow.
By the end of March 2008, it will have 500 supermarkets that include the retail chains acquired from Trinethra Super Retail, which are being rebranded under the umbrella of ‘more’.
In addition to supermarkets, the company would also set up 50-100 hypermarkets, each spread over a minimum area of 75, 000 sq ft, in the next five years.