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Posted: Friday, August 10 2007. 1:00 PM

Metro unperturbed over Bharti Wal-Mart Proposed Entry

German retail giant Metro AG does not feel threatened by the entry of the recently announced Bharti Wal-Mart Cash & Carry joint venture. The company feels it has the first mover advantage and is gearing up to face the competition by consolidating its presence through rapid expansion.

The company, which entered the Indian market five years ago with its wholly owned subsidiary, Metro Cash & Carry India, believes that its model has worked well in India and there is no need for a change in its business model.

Says Martin Dlouhy, managing director, Metro Cash & Carry India, "Our business in India has clearly shown that our business model of offering a one- stop location for businesses especially HORECA-hotels, restaurants, caterers and small retailers is working well. We have spent almost four years since opening to understand Indian business customers and also work on the supply chain to offer better value, both to our customers and suppliers. Going forward, we are poised for rapid expansion across the country."

Metro is at present busy setting up its fourth and fifth distribution centres in Kolkata and Mumbai. Its Mumbai centre is being set up at Neptune's Magnet Mall by the end of 2007. At present, Metro operates two distribution centres in Bangalore and one in Hyderabad. It will open its fourth wholesale store in Kolkata this year.

"In several countries, local players have emulated Metro's successful model of connecting producers and manufacturers with trade and business. In all such countries, Metro Cash & Carry continues to have a strong position in the cash & carry wholesale business. So, we do not fear competition at all," adds Dlouhy.

Metro has so far invested over Rs 250 ($60 million) crore to set up three distribution centres in Bangalore and Hyderabad . Its Mumbai and Kolkata centres will see a combined investment of over Rs 150 crore. "We are also looking to open at least three centres in Kolkata and enter as many cities as possible. We are presently looking for real estate in many other cities," a senior Metro official said.

In India, Metro serves three types of customers - retailers, hotels and caterers and other businesses including IT companies, offices. Metro sells around 8,000 type of food products and 10,000 non-food products. About 90 per cent of the goods offered originate from local producers and suppliers. Its products are sold only to its registered members.

Metro plans to invest about Rs 1,800 crore ($440million) to expand its operations in India over the next three to five years. The group is also looking at greater export opportunities from India.

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