Triveni Khushali Bazaar (TKB), a rural super store chain of Triveni Engineers and Industries Ltd, plans to nearly double the number of its outlets by March 2008 to 80, as organized retail takes off in the country’s rural pockets.
By 2009, it plans to have a total of 200 stores. The chain currently has 45 outlets that sell agricultural implements, diesel, fertilizers, and consumer goods to the farming and rural community. The company plans to invest Rs75 crore for expanding operations of which it will spend Rs25 crore in the current fiscal, with the rest scheduled for 2008-09.
“The consumers that we are targeting have a deep distrust of the large consumer chains. We are targeting our expansion in areas where we already have a presence through our sugar factories,” said Nikhil Sawhney, corporate vice-president, Triveni Engineers and Industries. “The rentals are very cheap in these areas (where the company has outlets) and are not more than 1% of the operating cost per outlet.”
Triveni is one of the many to join the race to expand retail outlets in rural India. DCM Shriram Consolidated Ltd also operates the Hariyali Kisaan Bazaar, and cigarette maker ITC Ltd has e-choupal stores that sell a range of products.
Triveni’s outlets are located in western Uttar Pradesh and Uttarakhand. It plans to expand in other parts of Uttar Pradesh, Madhya Pradesh, Punjab and Haryana. TKB has two formats. The larger format has a store area of 4,000 sq. ft and needs an investment of Rs30 lakh to set up. The smaller format is spread over 800 sq. ft and requires an investment of Rs10 lakh.
“It is difficult... to build trust with a rural or a semi-urban consumer. Once the trust is built, it lasts for long as has been shown by ITC. Triveni will have to leverage on its existing relationships to establish a pan-regional presence,” said Shubhranshu Pani, president, retail services, Jones Lang LaSalle Meghraj, a real estate advisory firm.
TKB is part of the Rs1,500 crore by sales Triveni Engineers and is a part of the company’s sugar business. It contributed around Rs60 crore to total turnover in 2006-07.
Triveni Engineers make sugar and engineered-to-order equipment such as steam turbines, high-speed gears and water treatment equipment. It has a cane-crushing capacity of 43,500 tonnes per day.