Tata Tesco
Content
TATA TESCO A BOUT TESCO:__
Tesco PLC is a British multinational grocery and general merchandise retailer headquartered in Cheshunt, Hertfordshire, England, United Kingdom. Wikipedia
GBX+2.10 (+0.63%) Stock price: price: TSCO (LON)337.50 GBX+2.10
24 Dec 9:13 am GMT - Disclaimer - Disclaimer
Cheshunt,, ENG ENG,, United Kingdom Headquarters: Cheshunt Headquarters: CEO:: Philip Clarke CEO Founder : Jack Cohen Founded:: 1919, East End of London, London, United Kingdom Founded
-The UK-based retailer will trade in products under 14 categories, including cereals, tea, coffee, spices, flour, vegetables and fruits, meat, fish and poultry, sweetmeat, bakery and dairy products, soft d rinks, icecreams, wine and liquor, textiles, footwear, crockery, furniture and electronic equipment among others and plans to open three to five f ive stores every financial year. ABOUT TATA--
Tata Group is an Indian multinational conglomerate company headquartered in Mumbai, Maharashtra, India. Wikipedia
Founder : Jamsetji Tata
Founded:: 1868 Founded
Mumbai,, Maharashtra Maharashtra,, India Headquarters:: Mumbai Headquarters
More than a year after allowing al lowing FDI in multi-brand retail segment, the government today received the first application from Tesco Plc in the sector. The UK -based retailer sought approval to open retail stores in India with an investment of $110 million in joint venture with the Tata Group. Tesco has proposed an equal joint venture with its existing partner, Trent, a Tata group company, to open stores, initially in Maharashtra and Karnataka. Commenting on the development, commerce and industry ministry Anand Sharma said, "We welcome the decision of Tesco to invest in India. On our part assure them all support for expedited clearances... We hope that this will mark a new beginning in transforming India's retail industry. I am sure that other global leaders will also look at investing in India." The UK-based retailer will trade in products under 14 categories, including cereals, tea, coffee, spices, flour, vegetables and fruits, meat, fish and poultry, s weetmeat, bakery and dairy products, soft dr inks, icecreams, wine and liquor, textiles, footwear, crockery, furniture and electronic equipment among others and plans to open three to five f ive stores every financial year. In September last year, the government had allowed 51 per cent FDI in the sector with certain riders like mandatory sourcing from Indian SMEs and investment in back-end infrastructure. Due to the
conditionalities, global retailers, including US-based Wal mart and Tesco had refrained from sending formal proposals to the government. Following its meetings with both domestic and international retailers, the government in August 2013 eased the norms to make the segment lucrative for retailers. Trent Ltd vice-chairman Noel Tata said, "We believe that our understanding of the Indian market, coupled with Tesco's unparallelled global retail expertise will allow us to leverage the tremendous potential of the market to the benefit of all stakeholders." According to Tesco's proposal, the joint venture, Trent Hypermarket Ltd, will operate outlets in India under banners, including Star Bazaar, Star Daily, Star Market with tag line stating 'A Tata and Tesco Enterprise'. Tesco has presence in India through a joint venture with the Tatas. These stores are located in Mumbai, Bangalore, Ahmedabad and Chennai. Tesco has stores in countries including China, South Korea, Thailand, Malaysia, Poland, Hungary, Ireland, Slovakia, Czech Republic and Turkey. Earlier in May, Tesco CEO Philip Clarke and Noel Tata had met Sharma seeking clarifications on the policy, especially on sourcing conditions. UK-baseD retailer seeks approval * Tesco sought approval to open retail stores in India with an investment of $110 million in joint venture with the Tatas * The UK-based retailer has proposed an equal joint venture with its existing partner, Trent, to open stores, initially in Maharashtra and Karnataka * The joint venture, Trent Hypermarket, will trade in products under 14 categ ories and plans to open three to five stores every financial year * The stores will be under banners, including Star Bazar, Star Daily, Star Market with tag line — 'A Tata and Tesco Enterprise'.
Anjali’s article--- At present, Tesco is the only foreign chain with an Indian partner. Walmart recently
broke up with Bharti and French retailer Carrefour is yet to find a partner. Another foreign retailer sounding positive on the India market is Japanese major Aeon, which has set up a small office in the country. When contacted, its spokesperson said the company was still “researching” the country’s market.
http://articles.economictimes.indiatimes.com/2013-12-18/news/45338286_1_star-bazaar-investmentproposal-retail-sector NEW DELHI: Tesco Plc, UK's largest retailer, plans to acquire a 50% stake in the Tata-owned Trent Hypermarkets for $110 million, becoming the first foreign chain to invest in supermarkets in India since FDI was allowed in the retail sector last year and stealing a march over global rival Walmart which split with its local partner Bharti Enterprises two months ago. According to an investment proposal submit ted by Tesco Overseas Investment Ltd to the government on Tuesday, the UK retailer plans to own 50% in Trent Hypermarkets Ltd, the company that at present runs a chain of 16 Star Bazaar hypermarkets in Maharashtra, Karnataka, Gujarat, and Tamil Nadu. The proposed partnership will operate and build on the existing portfolio of Star Bazaar stores in Maharashtra and Karnataka only, as the other two states have banned foreign investment in retail. "We have got Tesco's application. We will go through the proposal and hope to send it to the Foreign Investment Promotion Board by next week. They have not sought any clarification about the foreign investment policy from us," said a senior official of the Department of Industrial Promotion and Policy. The Tata-Tesco joint venture will not use the Tesco brand for its stores in India. 3-5 Stores Every Year
It will sell various items from food to fashion-wear in Star Bazaar, Star Daily and Star Market branded outlets, with a 'A Tata and Tesco Enterprise' tagline. The joint venture has a modest target of opening three to five stores every year. Tesco's investment proposal will no doubt come as a welcome relief for commerce and industry minister Anand Sharma as well as the UPA government which last year put its own survival at stake over the issue of allowing foreign direct investment in the retail sector only to discover that political uncertainty and stringent entry norms were discouraging foreign companies from investing in the sector.
"We welcome this development and on our part assure them all support for expedited clearances. We hope that this will mark a new beginning in transforming India's retail industry," said Sharma. Big Indian retailers have welcomed Tesco's move and expressed the hope that more such deals happen soon.
"The deal will encourage other global retail giants to look at India f or FDI in multi-brand retail and more such deals may now happen," said Future Group chairman Kishore Biyani. Future Group has in the past been in discussions with several foreign retail chains including Carrefour of France. Spencer's Retail owner Sanjiv Goenka said a lot of overseas retailers were looking at the market seriously. Hopefully, it's now a matter of time that other such deals get inked," Goenka said. ET had reported in October that Tesco was preparing to invest in Trent. The Indian company opened an 1,800-sq ft convenience store in Pune that was modeled on Tesco Express, the neighborhood store format of the world's third largest retailer. Over the last one year, many of the existing Star Bazaar outlets were redesigned or refitted to conform to Tesco's specification, in what now appears to be a run-up to Tuesday's investment application. Tesco's proposed investment in Trent Hypermarkets will deepen the relationship between the two partners. In 2008, the UK company had signed a franchisee agreement with Trent to provide technological expertise and supply products to the Tata company. At present Tesco supplies around 80% of merchandises that is sold in the 16 Star Bazaar and Star Daily store in western and southern India. "The application is a positive step forward in the relationship between the Tata Group and Tesco. We believe that our understanding of the Indian market coupled with Tesco's unparalleled global retail expertise will allow us to leverage the tremendous potential of the market," said Trent vice-chairman Noel Tata. The Tesco application says it will abide by FDI in multi-brand retailing regulations including the mandatory 30% sourcing from tiny Indian suppliers that many foreign retailers including Walmart said was too stringent.
August 08, 2008
Tesco to develop cash-and-carry business in India; announces agreement with Trent Tesco PLC today announced that it intends to develop a wholesale cash-and-carry business in India with an initial investment of up to £60m in the first two years. The new wholesale outlets will be designed for the Indian market following local research. They will offer a comprehensive range of great value fresh food, grocery and non-food products to small retailers, restaurants, kirana stores and other business owners. The business will also provide farmers and other suppliers with a highly efficient route to market. Based initially in Mumbai, the business will benefit from over a decade of experience of setting up local businesses in international markets. Tesco is also entering into an exclusive franchise agreement with Trent, the retail arm of the Tata Group. Under the terms of the agreement, for which Tesco will receive a fee, Trent will be able to draw on Tesco’s extensive retail expertise and technical capability to support the development of its hypermarket business, Star Bazaar. Trent currently has four hypermarkets, with plans to grow to 50 stores over the next five years. Tesco’s wholesale business will supply merchandise to Star Bazaar, enabling the two companies to benefit from the rapid development of a modern supply chain. Tesco already sources over £170 million worth of Indian products each year, with sourcing offices in Delhi, Bangalore and Tirupur. It also employs nearly 3,000 Indian staff at its Hindustan Service centre in Bangalore, providing IT, financial and business services to the entire Tesco Group. Sir Terry Leahy, CEO of Tesco PLC, said: “This is another exciting development for Tesco. It complements our entries into China and the United States, giving us access to another of the most important economies in the world. Our wholesale cash-and-carry format will bring improved value, range and service to thousands of Indian businesses. “We are delighted to be working with Tata, one of India’s largest and most respected business groups. Our agreement will enable us to share our international retail expertise, supporting Trent in the development of their Star Bazaar hypermarket business and benefiting Indian consumers.” Noel N Tata, MD of Trent, said: “We are extremely excited about our association with Tesco. Our ability to access Tesco’s retail knowledge and expertise will p lay an important role in our endeavour to offer a unique shopping experience to customers across the country. Their wholesale cash-and-carry business will provide us with the opportunity to tap into a world class supply chain thereby delivering the best of products and services to our customers.” These arrangements are in line with relevant Indian government regulations. Political reasons
Aside from the Trent business being established in the western and southern regions of India, the UK retailer may have chosen Karnataka and Maharashtra for political reasons as well. The Congress party, which has been backing FDI in retail, is in power in both these states. While Karnataka next goes to polls in May 2018, Maharashtra is slated for Assembly elections in December 2014. The multi-brand retail policy allows states to take a call on whether or not foreign retailers can open stores. BJP and other Opposition parties, including the Aam Aadmi Party, are against FDI in retail. Here is all you need to know about the deal: 1. Tesco will become the first foreign chain to invest in supermarkets in India since FDI was allowed in the retail space last year. It would even steal a march over global rival Walmart which split up with Bharti Enterprises two months ago. Reuters 2.The retailer has applied to India’s Foreign Investment Promotion Board for permission for an initial $110 million investment in the Tata Group’s retail business Trent Hypermarket Limited.Tesco has proposed an equal joint venture with its existing partner, Trent, a Tata group company, to open stores initially in Maharashtra and Karnataka. So basically, the proposed partnership will operate and build on the existing portfolio of Star Bazaar stores in Maharashtra and Karnataka only, as the other two states where Star Bazzar is present— Gujarat and Tamil Nadu— have banned foreign investment in retail. 3. The UK-based retailer will trade in products under 14 categories, including cereals, tea, coffee, spices, flour, vegetables and fruits, meat, fish and poultry, sweetmeat, bakery and dairy products, soft drinks, ice-creams, wine and liquor, textiles, footwear, crockery, furniture and electronic equipment among others and plans to open three to five stores every financial year. 4. The current market capitalisation of Trent stands at Rs 3,825.28 crore. The company has reported standalone sales of Rs 280.14 crore and a net profit of Rs 15.6 crore for the quarter ended September 2013. Currently Trent Hypermarket has a franchise and a wholesale supply arrangement with Tesco and its wholly-owned Indian subsidiary, Tesco Hindustan Wholesaling Pvt Limited, respectively. The exclusive franchise agreement grants Star Bazaar access to Tesco’s retail expertise and technical capability. Trent at present operates Westside, a fast growing chain of retail stores. The company has 74 Westside departmental stores. 5. Trent vice-chairman Noel Tata said: “The application is a positive step forward in the relationship between the Tata group and Tesco. We believe that our understanding of the Indian market coupled with Tesco’s unparalleled global retail expertise will allow us to leverage the tremendous potential of the market to the benefit of all stakeholders.” 6.Tesco has stores in countries such as China, South Korea, Thailand, Malaysia, Poland, Hungary, Ireland, Slovakia, Czech Republic and Turkey. Tesco was formed in 1919 by a Polish emigrant Jack Cohen who started selling groceries from a stall in Hackney in London’s East End.
7. In September last year, the government had allowed 51 percent FDI in the sector with certain riders like mandatory sourcing from Indian SMEs and investment in back-end infrastructure. Due to the conditions, global retailers, including US-based Walmart and Tesco had refrained from sending formal proposals to the government. Following its meetings with both domestic and international retailers, the government in August 2013 eased the norms to make the segment lucrative for retailers.
WHAT IS FDI?
What is the meaning of FDI ?
The Foreign Direct Investment means “cross border investment made by a resident in one economy in an enterprise in another economy, with the objective of establishing a lasting interest in the investee economy. FDI is also described as “investment into the business of a country by a company in another country”. Mostly the investment is into production by either buying a company in the target country or by expanding operations of an existing business in that country”.
Such investments
can take place for many reasons, including to take advantage of cheaper wages, special investment privileges (e.g. tax exemptions) offered by the country.
(a) (b) (c) (d) (e) (f) (g)
What are the major benefits of FDI : Improves forex position of the country; Employment generation and increase in production ; Help in capital formation by bringing fresh capital; Helps in transfer of new technologies, management skills, intellectual property Increases competition within the local market and this brings higher efficiencies Helps in increasing exports; Increases tax revenues
Brief Latest Developments on FDI (all sectors including retail):2012 – October: In the second round of economic reforms, the government cleared amendments to raise the FDI cap (a) in the insurance sector from 26% to 49%; (b) in the pension sector it approved a 26 percent FDI; Now, Indian Parliament will have to give its approval for the final shape,"
2012 - September : The government approved the
(a) Allowed 51% foreign investment in multi-brand retail, (b)
Relaxed FDI norms for civil aviation and broadcasting sectors. – FDI cap in Broadcasting was raised to 74% from 49%;
(c) Allowed foreign investment in power exchanges
2011 – December :
(i) The Indian government removed the 51 percent cap on FDI into single-brand retail outlets and thus opened the market fully to foreign investors by permitting 100 percent foreign investment in this area.
LINK FOR FDI--http://www.allbankingsolutions.com/Banking-Tutor/FDI-in-India.htm
TRENT HYPERMARKET:
Trent (Westside)
Type
Subsidiary
Industry
Retail
Founded
1998
Headquarters
Mumbai, Maharashtra, India
Parent
Tata Group
Website
Official Website
Trent is the retail arm of the Tata group. Started in 1998, Trent operates Westside, one of the many growing retail
chains in India based in Mumbai,Maharashtra and Landmark, a bookstore chain with Brick and mortar stores in [1] various locations of India.
History[edit] In 1998 Tata sold of their 50% stake in the cosmetic products company Lakmé to HLL for Rs 200 Crore (approx. 45 million US$), and created Trent from the money it made through the sale. All shareholders of Lakmé were given different shares in Trent. Simone Tata, the chairperson of Lakmé, went on to head Trent. The reason behind the sale
was that Simone Tata saw a greater growth potential in retail, and believed that it would be much more difficult for an Indian company to release new cosmetic products in a market that had opened up to global companies.
Business[edit] The company has a turnover of Rs. 357.6 crores (FY 2005-2006) and currently operates more than 60 stores in the [ ] major metros and mini metros of India. citation needed
The company has retail stores in 32 major Indian cities under the Westside brand.
Trent also operates the hypermarket Star Bazaar in 8 Indian cities.
[2]
[3]
In Aug, 2005 Trent acquired a 76% controlling stake in Landmark, a Chennai-based privately owned books and [4] music retailer and completed 100% acquisition in April 2008. Landmarkcurrently has 16 stores.
References[edit] 1.
Jump up^ "Fashion for ladies & latest men’s fashion | W estside brand name clothing". Mywestside.com. Retrieved 2011-02-23.
2.
Jump up^ "Trent's Star Bazaar comes to Bangalore". Tata.com. 2008-01-14. Retrieved 2011-02-23.
3.
Jump up^ "Trent acquires 76% stake in Landmark for Rs 103.6 cr". The Hindu Business Line. 2005-08-31. Retrieved 2011-02-23.
4.
Jump up^ "Trent buys out Landmark promoter". The Hindu Business Line. 2008-05-01. Retrieved 2011-02-23.
LINK: http://en.wikipedia.org/wiki/Trent_(Westside)
Tesco PLC is a British multinational grocery and general merchandise retailer headquartered in Cheshunt, Hertfordshire, England, United Kingdom. Wikipedia
GBX+2.10 (+0.63%) Stock price: price: TSCO (LON)337.50 GBX+2.10
24 Dec 9:13 am GMT - Disclaimer - Disclaimer
Cheshunt,, ENG ENG,, United Kingdom Headquarters: Cheshunt Headquarters: CEO:: Philip Clarke CEO Founder : Jack Cohen Founded:: 1919, East End of London, London, United Kingdom Founded
-The UK-based retailer will trade in products under 14 categories, including cereals, tea, coffee, spices, flour, vegetables and fruits, meat, fish and poultry, sweetmeat, bakery and dairy products, soft d rinks, icecreams, wine and liquor, textiles, footwear, crockery, furniture and electronic equipment among others and plans to open three to five f ive stores every financial year. ABOUT TATA--
Tata Group is an Indian multinational conglomerate company headquartered in Mumbai, Maharashtra, India. Wikipedia
Founder : Jamsetji Tata
Founded:: 1868 Founded
Mumbai,, Maharashtra Maharashtra,, India Headquarters:: Mumbai Headquarters
More than a year after allowing al lowing FDI in multi-brand retail segment, the government today received the first application from Tesco Plc in the sector. The UK -based retailer sought approval to open retail stores in India with an investment of $110 million in joint venture with the Tata Group. Tesco has proposed an equal joint venture with its existing partner, Trent, a Tata group company, to open stores, initially in Maharashtra and Karnataka. Commenting on the development, commerce and industry ministry Anand Sharma said, "We welcome the decision of Tesco to invest in India. On our part assure them all support for expedited clearances... We hope that this will mark a new beginning in transforming India's retail industry. I am sure that other global leaders will also look at investing in India." The UK-based retailer will trade in products under 14 categories, including cereals, tea, coffee, spices, flour, vegetables and fruits, meat, fish and poultry, s weetmeat, bakery and dairy products, soft dr inks, icecreams, wine and liquor, textiles, footwear, crockery, furniture and electronic equipment among others and plans to open three to five f ive stores every financial year. In September last year, the government had allowed 51 per cent FDI in the sector with certain riders like mandatory sourcing from Indian SMEs and investment in back-end infrastructure. Due to the
conditionalities, global retailers, including US-based Wal mart and Tesco had refrained from sending formal proposals to the government. Following its meetings with both domestic and international retailers, the government in August 2013 eased the norms to make the segment lucrative for retailers. Trent Ltd vice-chairman Noel Tata said, "We believe that our understanding of the Indian market, coupled with Tesco's unparallelled global retail expertise will allow us to leverage the tremendous potential of the market to the benefit of all stakeholders." According to Tesco's proposal, the joint venture, Trent Hypermarket Ltd, will operate outlets in India under banners, including Star Bazaar, Star Daily, Star Market with tag line stating 'A Tata and Tesco Enterprise'. Tesco has presence in India through a joint venture with the Tatas. These stores are located in Mumbai, Bangalore, Ahmedabad and Chennai. Tesco has stores in countries including China, South Korea, Thailand, Malaysia, Poland, Hungary, Ireland, Slovakia, Czech Republic and Turkey. Earlier in May, Tesco CEO Philip Clarke and Noel Tata had met Sharma seeking clarifications on the policy, especially on sourcing conditions. UK-baseD retailer seeks approval * Tesco sought approval to open retail stores in India with an investment of $110 million in joint venture with the Tatas * The UK-based retailer has proposed an equal joint venture with its existing partner, Trent, to open stores, initially in Maharashtra and Karnataka * The joint venture, Trent Hypermarket, will trade in products under 14 categ ories and plans to open three to five stores every financial year * The stores will be under banners, including Star Bazar, Star Daily, Star Market with tag line — 'A Tata and Tesco Enterprise'.
Anjali’s article--- At present, Tesco is the only foreign chain with an Indian partner. Walmart recently
broke up with Bharti and French retailer Carrefour is yet to find a partner. Another foreign retailer sounding positive on the India market is Japanese major Aeon, which has set up a small office in the country. When contacted, its spokesperson said the company was still “researching” the country’s market.
http://articles.economictimes.indiatimes.com/2013-12-18/news/45338286_1_star-bazaar-investmentproposal-retail-sector NEW DELHI: Tesco Plc, UK's largest retailer, plans to acquire a 50% stake in the Tata-owned Trent Hypermarkets for $110 million, becoming the first foreign chain to invest in supermarkets in India since FDI was allowed in the retail sector last year and stealing a march over global rival Walmart which split with its local partner Bharti Enterprises two months ago. According to an investment proposal submit ted by Tesco Overseas Investment Ltd to the government on Tuesday, the UK retailer plans to own 50% in Trent Hypermarkets Ltd, the company that at present runs a chain of 16 Star Bazaar hypermarkets in Maharashtra, Karnataka, Gujarat, and Tamil Nadu. The proposed partnership will operate and build on the existing portfolio of Star Bazaar stores in Maharashtra and Karnataka only, as the other two states have banned foreign investment in retail. "We have got Tesco's application. We will go through the proposal and hope to send it to the Foreign Investment Promotion Board by next week. They have not sought any clarification about the foreign investment policy from us," said a senior official of the Department of Industrial Promotion and Policy. The Tata-Tesco joint venture will not use the Tesco brand for its stores in India. 3-5 Stores Every Year
It will sell various items from food to fashion-wear in Star Bazaar, Star Daily and Star Market branded outlets, with a 'A Tata and Tesco Enterprise' tagline. The joint venture has a modest target of opening three to five stores every year. Tesco's investment proposal will no doubt come as a welcome relief for commerce and industry minister Anand Sharma as well as the UPA government which last year put its own survival at stake over the issue of allowing foreign direct investment in the retail sector only to discover that political uncertainty and stringent entry norms were discouraging foreign companies from investing in the sector.
"We welcome this development and on our part assure them all support for expedited clearances. We hope that this will mark a new beginning in transforming India's retail industry," said Sharma. Big Indian retailers have welcomed Tesco's move and expressed the hope that more such deals happen soon.
"The deal will encourage other global retail giants to look at India f or FDI in multi-brand retail and more such deals may now happen," said Future Group chairman Kishore Biyani. Future Group has in the past been in discussions with several foreign retail chains including Carrefour of France. Spencer's Retail owner Sanjiv Goenka said a lot of overseas retailers were looking at the market seriously. Hopefully, it's now a matter of time that other such deals get inked," Goenka said. ET had reported in October that Tesco was preparing to invest in Trent. The Indian company opened an 1,800-sq ft convenience store in Pune that was modeled on Tesco Express, the neighborhood store format of the world's third largest retailer. Over the last one year, many of the existing Star Bazaar outlets were redesigned or refitted to conform to Tesco's specification, in what now appears to be a run-up to Tuesday's investment application. Tesco's proposed investment in Trent Hypermarkets will deepen the relationship between the two partners. In 2008, the UK company had signed a franchisee agreement with Trent to provide technological expertise and supply products to the Tata company. At present Tesco supplies around 80% of merchandises that is sold in the 16 Star Bazaar and Star Daily store in western and southern India. "The application is a positive step forward in the relationship between the Tata Group and Tesco. We believe that our understanding of the Indian market coupled with Tesco's unparalleled global retail expertise will allow us to leverage the tremendous potential of the market," said Trent vice-chairman Noel Tata. The Tesco application says it will abide by FDI in multi-brand retailing regulations including the mandatory 30% sourcing from tiny Indian suppliers that many foreign retailers including Walmart said was too stringent.
August 08, 2008
Tesco to develop cash-and-carry business in India; announces agreement with Trent Tesco PLC today announced that it intends to develop a wholesale cash-and-carry business in India with an initial investment of up to £60m in the first two years. The new wholesale outlets will be designed for the Indian market following local research. They will offer a comprehensive range of great value fresh food, grocery and non-food products to small retailers, restaurants, kirana stores and other business owners. The business will also provide farmers and other suppliers with a highly efficient route to market. Based initially in Mumbai, the business will benefit from over a decade of experience of setting up local businesses in international markets. Tesco is also entering into an exclusive franchise agreement with Trent, the retail arm of the Tata Group. Under the terms of the agreement, for which Tesco will receive a fee, Trent will be able to draw on Tesco’s extensive retail expertise and technical capability to support the development of its hypermarket business, Star Bazaar. Trent currently has four hypermarkets, with plans to grow to 50 stores over the next five years. Tesco’s wholesale business will supply merchandise to Star Bazaar, enabling the two companies to benefit from the rapid development of a modern supply chain. Tesco already sources over £170 million worth of Indian products each year, with sourcing offices in Delhi, Bangalore and Tirupur. It also employs nearly 3,000 Indian staff at its Hindustan Service centre in Bangalore, providing IT, financial and business services to the entire Tesco Group. Sir Terry Leahy, CEO of Tesco PLC, said: “This is another exciting development for Tesco. It complements our entries into China and the United States, giving us access to another of the most important economies in the world. Our wholesale cash-and-carry format will bring improved value, range and service to thousands of Indian businesses. “We are delighted to be working with Tata, one of India’s largest and most respected business groups. Our agreement will enable us to share our international retail expertise, supporting Trent in the development of their Star Bazaar hypermarket business and benefiting Indian consumers.” Noel N Tata, MD of Trent, said: “We are extremely excited about our association with Tesco. Our ability to access Tesco’s retail knowledge and expertise will p lay an important role in our endeavour to offer a unique shopping experience to customers across the country. Their wholesale cash-and-carry business will provide us with the opportunity to tap into a world class supply chain thereby delivering the best of products and services to our customers.” These arrangements are in line with relevant Indian government regulations. Political reasons
Aside from the Trent business being established in the western and southern regions of India, the UK retailer may have chosen Karnataka and Maharashtra for political reasons as well. The Congress party, which has been backing FDI in retail, is in power in both these states. While Karnataka next goes to polls in May 2018, Maharashtra is slated for Assembly elections in December 2014. The multi-brand retail policy allows states to take a call on whether or not foreign retailers can open stores. BJP and other Opposition parties, including the Aam Aadmi Party, are against FDI in retail. Here is all you need to know about the deal: 1. Tesco will become the first foreign chain to invest in supermarkets in India since FDI was allowed in the retail space last year. It would even steal a march over global rival Walmart which split up with Bharti Enterprises two months ago. Reuters 2.The retailer has applied to India’s Foreign Investment Promotion Board for permission for an initial $110 million investment in the Tata Group’s retail business Trent Hypermarket Limited.Tesco has proposed an equal joint venture with its existing partner, Trent, a Tata group company, to open stores initially in Maharashtra and Karnataka. So basically, the proposed partnership will operate and build on the existing portfolio of Star Bazaar stores in Maharashtra and Karnataka only, as the other two states where Star Bazzar is present— Gujarat and Tamil Nadu— have banned foreign investment in retail. 3. The UK-based retailer will trade in products under 14 categories, including cereals, tea, coffee, spices, flour, vegetables and fruits, meat, fish and poultry, sweetmeat, bakery and dairy products, soft drinks, ice-creams, wine and liquor, textiles, footwear, crockery, furniture and electronic equipment among others and plans to open three to five stores every financial year. 4. The current market capitalisation of Trent stands at Rs 3,825.28 crore. The company has reported standalone sales of Rs 280.14 crore and a net profit of Rs 15.6 crore for the quarter ended September 2013. Currently Trent Hypermarket has a franchise and a wholesale supply arrangement with Tesco and its wholly-owned Indian subsidiary, Tesco Hindustan Wholesaling Pvt Limited, respectively. The exclusive franchise agreement grants Star Bazaar access to Tesco’s retail expertise and technical capability. Trent at present operates Westside, a fast growing chain of retail stores. The company has 74 Westside departmental stores. 5. Trent vice-chairman Noel Tata said: “The application is a positive step forward in the relationship between the Tata group and Tesco. We believe that our understanding of the Indian market coupled with Tesco’s unparalleled global retail expertise will allow us to leverage the tremendous potential of the market to the benefit of all stakeholders.” 6.Tesco has stores in countries such as China, South Korea, Thailand, Malaysia, Poland, Hungary, Ireland, Slovakia, Czech Republic and Turkey. Tesco was formed in 1919 by a Polish emigrant Jack Cohen who started selling groceries from a stall in Hackney in London’s East End.
7. In September last year, the government had allowed 51 percent FDI in the sector with certain riders like mandatory sourcing from Indian SMEs and investment in back-end infrastructure. Due to the conditions, global retailers, including US-based Walmart and Tesco had refrained from sending formal proposals to the government. Following its meetings with both domestic and international retailers, the government in August 2013 eased the norms to make the segment lucrative for retailers.
WHAT IS FDI?
What is the meaning of FDI ?
The Foreign Direct Investment means “cross border investment made by a resident in one economy in an enterprise in another economy, with the objective of establishing a lasting interest in the investee economy. FDI is also described as “investment into the business of a country by a company in another country”. Mostly the investment is into production by either buying a company in the target country or by expanding operations of an existing business in that country”.
Such investments
can take place for many reasons, including to take advantage of cheaper wages, special investment privileges (e.g. tax exemptions) offered by the country.
(a) (b) (c) (d) (e) (f) (g)
What are the major benefits of FDI : Improves forex position of the country; Employment generation and increase in production ; Help in capital formation by bringing fresh capital; Helps in transfer of new technologies, management skills, intellectual property Increases competition within the local market and this brings higher efficiencies Helps in increasing exports; Increases tax revenues
Brief Latest Developments on FDI (all sectors including retail):2012 – October: In the second round of economic reforms, the government cleared amendments to raise the FDI cap (a) in the insurance sector from 26% to 49%; (b) in the pension sector it approved a 26 percent FDI; Now, Indian Parliament will have to give its approval for the final shape,"
2012 - September : The government approved the
(a) Allowed 51% foreign investment in multi-brand retail, (b)
Relaxed FDI norms for civil aviation and broadcasting sectors. – FDI cap in Broadcasting was raised to 74% from 49%;
(c) Allowed foreign investment in power exchanges
2011 – December :
(i) The Indian government removed the 51 percent cap on FDI into single-brand retail outlets and thus opened the market fully to foreign investors by permitting 100 percent foreign investment in this area.
LINK FOR FDI--http://www.allbankingsolutions.com/Banking-Tutor/FDI-in-India.htm
TRENT HYPERMARKET:
Trent (Westside)
Type
Subsidiary
Industry
Retail
Founded
1998
Headquarters
Mumbai, Maharashtra, India
Parent
Tata Group
Website
Official Website
Trent is the retail arm of the Tata group. Started in 1998, Trent operates Westside, one of the many growing retail
chains in India based in Mumbai,Maharashtra and Landmark, a bookstore chain with Brick and mortar stores in [1] various locations of India.
History[edit] In 1998 Tata sold of their 50% stake in the cosmetic products company Lakmé to HLL for Rs 200 Crore (approx. 45 million US$), and created Trent from the money it made through the sale. All shareholders of Lakmé were given different shares in Trent. Simone Tata, the chairperson of Lakmé, went on to head Trent. The reason behind the sale
was that Simone Tata saw a greater growth potential in retail, and believed that it would be much more difficult for an Indian company to release new cosmetic products in a market that had opened up to global companies.
Business[edit] The company has a turnover of Rs. 357.6 crores (FY 2005-2006) and currently operates more than 60 stores in the [ ] major metros and mini metros of India. citation needed
The company has retail stores in 32 major Indian cities under the Westside brand.
Trent also operates the hypermarket Star Bazaar in 8 Indian cities.
[2]
[3]
In Aug, 2005 Trent acquired a 76% controlling stake in Landmark, a Chennai-based privately owned books and [4] music retailer and completed 100% acquisition in April 2008. Landmarkcurrently has 16 stores.
References[edit] 1.
Jump up^ "Fashion for ladies & latest men’s fashion | W estside brand name clothing". Mywestside.com. Retrieved 2011-02-23.
2.
Jump up^ "Trent's Star Bazaar comes to Bangalore". Tata.com. 2008-01-14. Retrieved 2011-02-23.
3.
Jump up^ "Trent acquires 76% stake in Landmark for Rs 103.6 cr". The Hindu Business Line. 2005-08-31. Retrieved 2011-02-23.
4.
Jump up^ "Trent buys out Landmark promoter". The Hindu Business Line. 2008-05-01. Retrieved 2011-02-23.
LINK: http://en.wikipedia.org/wiki/Trent_(Westside)
