Kirby eyes retail foray via building arm

Plan Opposed As Some Officials Fear Other Foreign Cos Too May Route Retail Plans Through Indian Subsidiaries

KIRBY, a subsidiary of one of West Asia’s largest business houses Alghanim Industries, plans to enter the Indian retail sector through its existing Indian subsidiary, Kirby Building Systems, a manufacturer of pre-engineered steel buildings. According to sources, the company wants to be a multi-brand consumer durable retailer, an area where FDI is not allowed. Kirby India CEO Srikant Gokhle told ET: “Our retail plans are still very preliminary. We are exploring ways to enter Indian retail in tandem with existing policy regulations.” A source, however, said the company has already made a road map that has been shared with relevant government departments. “The company has also zeroed in on a brand name for its retail venture called Excite,” said the source. Mr Gokhle, however, denied having named its retail venture. Certain sections in the government have reservations about Kirby’s plans as it would set a precedent and encourage many such foreign companies to route their retail plans through Indian subsidiaries. Some policy makers in the UPA government have been sceptical over issues concerning foreign retailers ever since the Congress President Sonia Gandhi wrote to the Prime Minister, asking him to conduct a comprehensive study on the “impact of transnational retailers on local kirana stores.” Following this, the commerce ministry had mandated research firm ICRIER to do the study and recommendations are expected early next month. Of late, consumer durable specialty retailing has evinced interest from some leading corporate houses. Last year, the Tatas floated Croma, their consumer durable retail venture in an agreement with the Australian chain Woolworth. Mukesh Ambani’s Reliance Retail and Kishore Biyani’s Future Group are also aggressively sprucing up their presence on this front. Apart from Kirby, some other international players who are looking at a share of the India consumer durable retail pie include the British chain Best Buy and US’ Radio Shack. To incentivise entry of foreign players in the sector, the commerce ministry had said last November that it was planning to allow 51% FDI in multi-brand consumer durable retail. However, this has not yet fructified as a policy. At present, Kirby’s promoting company, Alghanim Industries, has a presence in the trading and distribution of consumer electronics, food and consumables, automotive vehicles and products, industrial manufacturing, engineering, technology, travel, shipping and transportation services, advertising, insurance and contracting.

VERY EXCITED

West Asian Co has reportedly named it retail venture Excite

Of late, consumer durable specialty retailing has evinced interest from leading corporate houses, including Tatas & Reliance

Many international players, including the British chain Best Buy and US’ Radio Shack, are looking at a share of the Indian consumer durable retail pie

Courtesy: EconomicTimes
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