Wholesaler Metro has eyes UP in the north

Written by Deepa Jainani | Lucknow, Feb 25 | Updated: Feb 26 2008, 06:42am hrs
Germanys Metro Cash and Carry, the world leader in the Business to Business (B2B) wholesale format, is scouting for opportunities in Uttar Pradesh, the countrys most populous state. The companys officials, who were in the state capital a few days back, are in the process of looking for suitable sites in around at least four cities of the state which have a population of more than 10 lakh people, where they can open their wholesale distribution centres. They are also evaluating on how they can put their supply and distribution chain in place and have met top officials of the Mayawati Government in this regard. Tentatively, the company has earmarked Lucknow, Kanpur, Ghaziabad, Noida Allahabad and Benaras, where it would want to start its distribution centres.

These distribution centres, which offer over 18,000 articles at the most competative wholesale prices for hotels, restaurants, caterers, food and non-food traders, institutional buyers and professionals, are spread over an area of 1 lakh to 1.5 lakh square feet, with the company investing around 150 crores on each one of them.

A one-stop shop, the company tries to do away with the shortcomings faced by these buyers when they have to go to 10 different places to get their needs fulfilled. Right from food to non-food to crockery to small tools, to dairy products to stationary, the company tries to cut down on all the unnecessary delivery and credit costs faced by these wholesale buyers as well as small kirana store owners.

Speaking to The Financial Express, Vishal Sehgal, head corporate relations of Metro Cash and Carry said that while the company is already in talks with the government, any plans of entering the UP market hinge on the more important factor of putting in place the supply chain. Though we are already in talks with the government officials and most of them are very positive about the idea of having an organised supply chain in place. We have also apprised them of the benefits that we bring to the table, but we are first trying to put our supply chain in place, for almost 90 per cent of our procurements are done from local farmers and artisans. We are already probing the possibilities of getting the right kinds of suppliers in Ghaziabad, Benaras, Noida, Agra and many other cities as our margins are very tight, said Sehgal.

Already, the company is sourcing a lot of the articles stocked in their existing outlets from Uttar Pradesh.