Global furniture retailer Ikea plans to invest Rs 870 core in building its distribution centre in India.
Ikea India is getting ready for the launch of its first retail store in Hyderabad and has started stocking products at its first distribution centre in Chakan, Pune. This is a central distribution centre that will supply to stores across the country. Ikea has announced plans to set up 25 stores at an investment of Rs 20,000 crore.
Bimal Patel, distribution manager at Ikea India, who oversees supply chain logistics, transportation and logistics and distribution centre, said they have 2,000 products at the centre. Ikea has leased the warehouse space at the IndoSpace Industrial Park and has already invested Rs 20 crore for 2.7 lakh sq ft area.
Another bigger distribution centre of three lakh sq ft, again in partnership with IndoSpace, is coming up in Chakan. Here, investment will be of Rs 100 crore, Patel said.
While these are leased properties, Ikea will be building its own distribution centre as the retail network grows and the company starts e-commerce operations, Patel said. They will be investing around Rs 750 crore at this centre, which will be over 20 lakh sq ft and will be a typical Ikea-standard facility that will be fully racked, have automation, sustainability and ability to handle online operations, Patel said. “As we procure in bulk, we need to store in bulk as we are a volume-driven company and need to store high-volume of products. They will serve both offline and online requirements and would need two separate operations at the distribution centres to support this,” Patel said.
For Ikea, Pune is an ideal location. Pune’s proximity to the JNPT port as well as access to the markets where Ikea plans to open stores make it attractive for Ikea to set up the distribution centre here.