Swedish furniture major IKEA today said it is in talks with a number of state governments for sourcing wood for furniture even as it is setting up a large facility in Pune for stocking goods.
Swedish furniture major IKEA today said it is in talks with a number of state governments for sourcing wood for furniture even as it is setting up a large facility in Pune for stocking goods. The states include Telangana, Karnataka, Maharashtra and north eastern states. “Today raw material is a biggest challenge for furniture in India. Wood (procurement) is a bit challenge. We are working with the state governments here (Telangana), Karnataka, Maharashtra and in Northeast to see how the government can help to find the wood,” deputy country manager of Ikea India, Patrik Antoni, said in a press conference. As per the commitment the firm has made to the Centre, by 2022 as much as 30 per cent of their products they sell in India will be sourced locally. “We are setting up large facility in Pune which will be our distribution centre. By November the warehouse in Pune will be ready. It is a rented facility. We will have a 10,000 sq mts facility where we will stock the products,” he said.
To a query, he said GST will not have any negative impact on the stores and ease the inter-state goods movement. Ikea is currently exporting goods worth euro 325 million from India, of which 70 per cent constitutes textiles. On the progress of Hyderabad store, Antoni said the total investment on the store would be Rs 1,000 crore including land cost. The Swedish company said it will recruit about 800 people for the store, including 120 for the 1000-seater restaurant that is coming up along with the outlet here by next year. “By the end of September we will have 100 co-workers by the end of December, we will be around 300 to 400 and then within three months of the store opening we will go up to 800. Of this 100 will be at the management level,” he added.
In May 2013, the government allowed the Swedish furniture major to invest Rs 10,500 crore for setting up single brand retail stores. Ikea was one of the first companies in India to be allowed 100 per cent FDI in retail.