FDI in retail won't affect direct-selling firms: Amway

The opening up of foreign direct investment (FDI) in the retail sector would not impact a company like Amway India, a top company official said here on on Wednesday.

“This may impact other companies who are dependant on the marketing structure of middlemen . But a direct-selling company like Amway India is already cost effective and will not be affected by the opening of the retail sector to FDI ,” said Sudeep Sengupta , head of corporate communications, Amway India .

Asked about Yoga guru Ramdev's allegation that multinational companies (MNCs) are in India only to loot the wealth of the country, Sengupta disagreed.

“It would be unfair to say that MNCs are here only to loot . While this may apply to some fly-by-night companies, firms like Amway, Unilever, Procter & Gamble and ITC have been around for long and are contributing to various sectors like education and health.”

“Amway is in favour of stringent laws and regulation by the government for direct-selling companies,” he said .

“A regulation law is already enforce in Kerala . The union government is looking at these guidelines now ,” Sengupta added .

Speaking about Amway India’s largest manufacturing plant in India, which is located in Himachal Pradesh’s Baddi, he said this plant would continue to contribute the largest output for the Indian.

The company tripled its production capacity in Baddi by commissioning four new production lines at an investment of Rs 55 crore.

The first phase of the Baddi project saw an investment of Rs 50crore , taking the total investment to Rs 105 crore .

Nationally, Amway clocked a turnover of Rs 2,130 crore , registering a 19 per cent growth in 2011 over the previous year .

The company is targeting a turnover of around Rs 2,400 crore this year. Amway started its India operations in 1998 with Rs 99 crore.

The company is now scouting for land to set up another large manufacturing unit outside northern India, Sengupta said .

Talking about doing business in Himachal Pradesh, he said last year the firm recorded a sale of Rs 10.5 crore, contributing Rs 1.25 crore as sales tax to the state exchequer.