Ikea to invest Rs 30 bn in Maharashtra to set up stores, experience hubs

(Photo: Reuters)
Swedish furniture retailer Ikea will invest Rs 300 million in Maharashtra over the long-term to set up multi-format stores as well as experience centres.

"We will be investing close to Rs 300 million over the long-term in the state to set up multi-format stores. We will also open experience centres in Mumbai going forward," Patrik Antoni, deputy country manager, Ikea told reporters.

He indicated that the Maharashtra operations will be key for the company, and hence it has allocated sufficient funds to develop the market here.

Initially, the company had earmarked Rs 1.05 billion to open about 25 stores in the country by 2025.

"Now that we have been working to open a few stores, we could increase the investments here going forward," he said, informing that Delhi-NCR would be another key market for the company.

The retailer has already committed to invest Rs 75 million over the next 2-3 years in setting up its first distribution centre in Pune.

When asked about the delay in opening the first Ikea store in Hyderabad, which was slated to open early 2018, he said that the company was focusing o the safety of workers, and quality of the construction. "We will open it in the next few months," Antoni added.

It is also looking at job creation, as each store would engage about 2,000 coworkers, of which 800 at least would be directly employed, according to a company release.

Speaking about increasing the sourcing from the country as well as from the state, Maharashtra market manager Per Hornell said that the company is already working with suppliers in the areas of textiles and plastics.

Globally, India accounts for about 3 per cent of the retailer's total sourcing. "Ikea currently sources from 11 suppliers in Maharashtra in categories such as textiles, including carbon steel, metal and plastics," Hornell said.

The company is also looking to partner with state governments to source local sustainable raw materials including bamboo, jute, rubberwood, banana barks, coir etc, he informed.

Last year, Ikea India had committed to double its local sourcing from Euro 318 million to Euro 600 million by 2020.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel