Wednesday, July 28

IKEA proposes to invest in Bengal

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Swedish retail giant IKEA Group has written to Bengal chief minister Mamata Banerjee seeking an appointment next month to discuss multi-crore investment plans for the state.

IKEA plans to open up to two stores in the state entailing an investment of up to Rs 2,000 crore.

In a letter to Banerjee, a senior official of the company has promised an investment of Rs 1,000 crore for each store that it will open in the state.

IKEA India deputy CEO Patrik Antoni and the company’s country expansion manager David McCausland and country public affairs manager have sought the appointment with Banerjee in this connection.

“This is a big news,” Banerjee told reporters at the secretariat.

“Bengal is one of the key markets in Ikea’s plans in India and we would like to start working in your state for establishing IKEA’s expansion plans. Each IKEA store in your state will be an investment of Rs 1,000 crore and generating employment of 800 directly and 1,200 jobs indirectly,” IKEA’s letter to Banerjee read.

“The store will be built over 4,00,000 square feet of area. We see Bengal as a market for 1-2 IKEA stores and touch points, which means investment of more than Rs 2,000 crore,” it added.

Sources said IKEA stores are spread across a single ground floor. Four lakh square feet translates into 11 acres. Such an amount of land is available only in the outskirts of Calcutta, which fits with IKEA’s global strategy of having stores outside city limits.

The letter said IKEA’s presence would have a positive impact in the state in investment, manufacturing, jobs and women empowerment.

Earlier this month, IKEA had signed a memorandum of understanding with the Gujarat government to set up its stores in the state with an expected investment of up to Rs 3,000 crore in the long term.

IKEA, which received government approval in 2013 for its Rs 10,500-crore proposal to open retail stores under the 100 per cent FDI route, has earlier signed MoUs with Karnataka, Telangana, Maharashtra, Uttar Pradesh and Haryana.

As of November 2017, IKEA owns and operates 415 stores in 49 countries. In fiscal 2016, goods worth 36.4 billion euros were sold, representing a 7.6 per cent increase over 2015.

All products of IKEA are its own design, produced either by IKEA itself or sourced from its suppliers and only sold in IKEA stores globally.

Source: The Telegraph

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