Bharti Wal-Mart, Punjab negotiate training tie-up

Bharti Wal-Mart, Punjab negotiate training tie-up

New Delhi: Retailer Bharti Wal-Mart Pvt. Ltd, a joint venture (JV) between Bharti Enterprises and Wal-Mart Stores Inc., the world’s biggest retail chain, is in talks with the Punjab government to set up institutes to train people for jobs at cash-and-carry wholesale outlets it plans to open across India over the next few years.

If the talks succeed, the state government may offer free land and Bharti Wal-Mart will develop the training infrastructure. The 50:50 JV, formed in August 2007, is expected to start its first cash-and-carry outlet near Chandigarh in the first quarter of 2009.

People trained in the institutes would be employed in stores elsewhere as well. Bharti Wal-Mart plans to open 10-15 outlets in the next seven years and expects to employ some 5,000 people.

“A large trained force will be required to man its (Bharti Wal-Mart’s) joint venture operations and outlets," R.I. Singh, chief secretary of Punjab, told Mint. “We are in talks with them for helping them set up institutes for providing training...the land will be provided by the state government."

“It needs to be worked out whether the land will be given free," he said. “The number of institutes and number of people to be trained are also being worked out. We are working out the plans and things will be finalized within a year."

The state government can justify giving free land for such a project given the employment it would help generate, said Jayant Kochar, managing director of New Delhi-based retail consultancy Go Fish Retail Solutions. “I can’t see why anyone would object even if they did (give free land)," Kochar added.

A Bharti Wal-Mart spokesperson said in an email the JV is looking at a public-private partnership with the state government to address the shortage of trained personnel in retail. “We are in the process of working with the Punjab government to set up a training centre," the spokesperson said.

“In addition to creating jobs, we hope to create a pool of talent in Punjab by offering an opportunity for students to enrol and gain world-class knowledge and learn best practices in retail and cash-and-carry operations as a career," the spokesperson added. “But it is still early days and details are yet to be finalized."

To be sure, organized retail is still trying to strike roots in the country. After complaining about high rentals and other costs, a space crunch and lack of skilled employees, retailers facing mounting losses are slowing expansion, paring the number of outlets and cutting headcount, Mint reported on 22 September.

Still, the sector is expected to create hundreds of thousands of new jobs in the coming years after it rides out those problems. A report by McKinsey and Co. released this month said organized retail will create at least 1.6 million jobs in the next five years.

Bharti’s separate retail venture, Bharti Retail Ltd, plans to invest up to $2.5 billion (Rs12,325 crore) by 2015 and hopes to create 60,000 retail jobs during the period. Bharti Retail, which has already set up the Bharti Academy of Retail in Ludhiana and Jalandhar and has trained at least 1,800 people, started its operations with three convenience stores in Punjab in April and now owns a dozen outlets.

The company is looking at opening larger supermarkets ranging up to 40,000 sq. ft in Punjab by the year-end.