Bharti group eyes farm produce retail with $2.5 bn investmentMay 18th, 2009 - 11:01 am ICT by IANS
By Anuradha Shukla
New Delhi, May 18 (IANS) Agriculture and retailing of farm-based products will be the next focus areas for the diversified Bharti group with a war chest of $2.5 billion. The group reached a major milestone last week with a telecom subscriber base of 100 million.
The group’s founders, the Mittal brothers, whose Bharti Enterprises has a tie-up with global retail giant Wal-Mart in the wholesale business, is quite upbeat on the farm sector, hoping for a pan-India presence, as also exports, over the next few years.
“We have concrete plans to invest Rs.12,500 crore (Rs.125 billion/$2.5 billion) in the retail venture by the end of 2015,” said Rajan Bharti Mittal, vice chairman and managing director of Bharti Enterprises, which has interests in telecom, retail, insurance and realty.
“Agriculture retail is going to be our next focus area for expansion,” Mittal, who is also the group’s director for wholesale and retail business, told IANS in an interview. “We have begun with fruits and vegetables. Now we will look at other areas in a big way.”
The group is also waiting for the government to open the retail trade further, as the policy currently permits foreign equity in only wholesale trade, technically called cash-and-carry business. The tie-up with Wal-Mart can then be expanded further.
Mittal said the main reason for the group’s focus on the farm sector was that demand for consumer products has continued to swell in India. “There is no slowdown for consumer goods. Our telecom business is an example,” he said.
“There is a huge potential for growth for agro-based products in India. I feel it will be a profitable venture. We are working on a new model for this business. We will unveil it soon.”
The group had set up in 2004 a joint venture company by the name of Bharti Del Monte India with the aim of linking Indian fields to the world and making the country a global food basket.
Operating with the brand name “FieldFresh”, it has acquired some 300 acres of land in Punjab to serve as the hub for research and development and hopes to employ some 100,000 people directly or indirectly.
Mittal said this was also the right time to foray into the farm products retail, as the Congress-led United Progressive Alliance (UPA) was set to govern for the next five years without being fettered by Left parties that have opposed foreign equity in retail.
“The UPA coming to power will add a lot of positivity to the retail sector. It will get a major boost. In fact, with no pressures from the Left, this sector will open up for foreign investment. That is our hope,” he said.
“I feel that agriculture and agricultural reforms will be an important component of this government’s agenda. Naturally, agricultural retail will give a new lease to the overall farm sector.”
Maintaining that India requires a “second green revolution”, Mittal said: “Promoting agro-retail can generate employment and fresh opportunities for farmers. This sector badly needs foreign investment.”
He also stressed on the imperativeness of a cold storage revolution, as an estimated 40 percent of the country’s produce goes waste.
“A large part of agricultural produce is spoilt before reaching the cold storage. Foreign funds will boost the whole supply chain initiative and the logistics.”
(Anuradha Shukla can be contacted at email@example.com)
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