New Delhi: Bharti, Wal-Mart ink joint venture

"Both companies will have a 50:50 stake in the joint venture, which will be called Bharti Wal-Mart Pvt Ltd," Bharti Enterprises managing director, Rajan Mittal, announced after signing the agreement.

The venture, Mittal said, was in line with the government guidelines. "This venture is committed to bringing the whole eco-system together. It will serve not only big retailers but also small businesses, kirana shops, hotels and restaurants as well as small manufacturers and artisans," he added.

The venture would also be used as a source for Bharti Retail, which is setting up a chain of stores in India that would be 100 per cent owned and operated by Bharti, Mittal said.

The wholesale business-to-business (B2B) cash-and-carry operations promise to provide small retailers and business owners a wide range of quality products at competitive prices that help them enhance their businesses and profitability.

The first wholesale facility is likely to be opened by the end of 2008, Mittal said, adding that over the next seven years, 10-15 wholesale facilities are likely to be opened.

Spread over an area of 50,000-100,000 square feet, each of these facilities would sell vegetables, groceries, fruits, staples, footwear, stationary, clothing, consumer durables and other products. He, however, refused to divulge the likely investment in the venture.

Estimating around 12 million kiranas (small retailers) in the country, Wal-Mart India country president, Raj Jain, saw an opportunity for the joint venture to serve them, as less than one million were served by FMCG companies.

"In line with our global vision to save people money, Wal-Mart would like to leverage its global scale to transform some of the suppliers into exporters with access to our global markets over time."

Wal-Mart, Jain said, was already sourcing US$600 million worth of products from India. He anticipated this to multiply manifolds but refrained from putting a figure to it.

Jain said the venture would cater to all the retailers and not just Bharti Enterprises' upcoming retail stores. A wide variety of merchandise would be available under one roof, especially in Tier-II and Tier-III towns, he added.

Mittal said a technical agreement would entail sharing of technical knowledge, that Bharti would pick up from Wal-Mart.

- By Business Desk

The Statesman, Asia News Network