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Reliance to roll out from H'bad

The company says it will kick off its mega retail business with a very large food, vegetables and staples store.

india Updated: Aug 19, 2006 15:26 IST

Kicking off its Rs 25,000-crore mega retail plans, Reliance Industries on Friday announced that its first store would come up in Hyderabad next month, which will be a vegetable and food store.

"We will be opening our first store in Hyderabad in September and this will be a very large store with food, vegetables and staples," Reliance Retail President and Chief Executive (Operations and Strategy) Raghu Pillai told reporters on the sidelines of a CII conference.

The Indian corporate giant had announced a Rs 25,000-crore investment in the retail sector in June this year and said that it would be listing the company subsequently.

Reliance has already signed agreements with the West Bengal and Punjab governments, as it moves forward in tying up for procurements and roll out.

"We are in talks with quite a few state governments and cooperative chains for alliances," Pillai said.

He said the company had plans to spread to other parts of the country "as soon as we can". He, however, refused to divulge the number of stores the company was planning to have by yearend.

"We are talking to a variety of brands and the entire thing will be finalised in the next six months," he said.

Pillai said the Reliance Retail strategy would be to "take out extra costs from the supply chain" in order to offer products at competitive prices.

As part of backward integration efforts to cut down costs, the company is looking at partnering companies, including consumer durables, for direct procurements. Asked whether the company was also looking to source from foreign locations, including China, he said, "Why not? If we get a better price we will also do that."

Asked whether the high real estate prices could act as a stumbling block to the company's roll out plans, he said, "Real estate prices do fluctuate, but this is just one element of our entire capital expenditure plans."

However, he admitted that prices in some parts of the country were "unrealistic". Reliance is following a twin model for its expansion, which includes owning land at some places while leasing in others. "We are looking at partnerships with real estate developers also," Pillai said.

The company is currently eyeing the ailing Super Bazar cooperative chain in Delhi and has bid Rs 288 crore to take over its management.

He said the company is also eyeing a foray in pharmaceutical products retailing. "It will be both independent pharma retailing as well as part of the normal retail plans also," he said.