Tuesday, November 07, 2006

Reliance Retail to strengthen supply chain mechanism

The Economic Times reports that Reliance Retail’s newly launched Reliance Fresh is only the first step of the company’s retail plans. The next format to be launched will be Reliance Fresh Plus, a larger format store. The company plans to completely secure its supply chain from the farmer to the store, and has been aggressively purchasing property to set up its own fruit and vegetable mandis.

Hyderabad has the first of these Reliance Mandis, which is selling around 15-20 tonnes of vegetables. With these mandis, the company will be able to control the entire distribution channel and make commission agents and other intermediaries redundant. Reliance Mandis will sell all basic fruits and vegetable at 50% of the current price to vendors.

According to sources, Reliance will also be using its Special Economic Zones (SEZs) as distribution and stocking hubs, with each one specializing in different commodities. Along the Western Freight corridor, RIL will develop SEZs in Haryana, Jamnagar and Mumbai at an estimated cost of Rs. 25,000 crore.

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