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Oct 22, 2012, 11.18 PM IST
Footwear firm Pavers England last week became the first company to get the Foreign Investment Promotion Board's nod for 100% FDI in single-brand retail. Utsav Seth, MD & CEO, Pavers India explains to CNBC-TV18 about his plans for investment in the country.
The arrangement with Reliance Footprints will absolutely continue and will go on a expansion spree.
MD & CEO
Footwear firm Pavers England last week became the first company to get the Foreign Investment Promotion Board's nod for 100-percent FDI in single-brand retail. Utsav Seth, MD & CEO, Pavers India explains to CNBC-TV18 about his plans for investment in the country.
Below is an edited transcript of the interview on CNBC-TV18.
Q: You have got approval from the FIPB to come in via the 100-percent single brand FDI route. How soon can we expect you to roll out your exclusive stores and how many stores are you looking to launch?
A: We are still waiting for a formal intimation from the government of India which takes some time. Once we get the confirmation, our plans are to ramp up our exclusive stores to about 150. We currently operate 30 exclusive franchise outlets which we intend to acquire and then add about 120 new stores over next 24 months.
We are looking at 150 own stores by March 2015 and more than 350 shop-in-shop which we would be expanding with our key partners Reliance Footprints, Shoppers Stop , Lifestyle and Westside.
Q: You have been operating in India for the last few years through partners like Reliance Industries . So why did you feel the need to go solo? Will your arrangement with partners like Reliance continue?
A: The arrangement with Reliance Footprints will absolutely continue and will go on a expansion spree. Our need to come on our own is the need to create our own stores across India. There is lot of opportunity; we cannot offer our entire range in a shop-in-shop concept. We have close to 5000 SKUs globally.
We currently have rolled out more than 1000 SKUs in our own EBOs, which are operating through a franchise route and when you have to grow in a country like India, you need to have more control and ability to finance the growth, which is only possible if you have 100-percent ownership of the business.
Q: So, far what has the experience in India been like? What kind of sales have you registered and what kind of growth are you expecting?
A: The experience has been great in India. We have had a very interesting journey ever since we embarked in 2008. We invested quite heavily at that time into our R&D facility in Tamil Nadu and we built on our very strong local supply chain.
It's been a very exciting and interesting journey. We are growing year-on-year in excess of 100 percent. We are currently sort of reaching a mark of Rs 100 crore in our turnover and we aim to continue to grow 100 percent year-on-year for next five years.
Q: Going forward, what is your investment plan? How much do you intend on investing in India and what about the sourcing norms which have been diluted? But how much do you currently source locally and do you see yourself increasing your India sourcing?
A: For our Indian operations we source more than 32 percent locally within India. Globally, we source close to 1.5 million pairs out of India for our operations in UK and Europe. We are, in fact, looking to expand the local sourcing. We currently operate with about 15 vendors and our teams are working very hard to add additional five or six vendors over the next six-months' period.
So, that's been a very good point for us because it is very important that we grow local sourcing because India has the skills, talent and availability of raw material for quality level of products.
It is a question of just identifying the right vendors and our R&D facility in India is a unique differentiating proposition where we can offer products and production kits to SMB factories who can then produce products for us and that’s been a very helpful strength for the company to expand and grow.
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