Ikea to set up shop in Hyderabad

Swedish furniture retailer signs MoU with Telangana government

Swedish furniture retailer Ikea today signed an MoU with the Telangana government to open its first outlet in Hyderabad.

The company’s retail outlets have a standard design and each location entails an investment of $100 million (around Rs 610 crore). In addition, the backward integration of supplier linkage will have a positive bearing on local economy, the government said.

Ikea India CEO Juvencio Maeztu met chief minister K Chandrasekhar Rao on this occasion and sought the government’s help to get a location near one of the Metro retail stores in the city for their upcoming outlet for which the latter has readily agreed. The government has appointed commissioner of industries as a single contact point to ensure all the necessary clearances for the company’s operations in a speedy and transparent manner.

The chief minister suggested to the company representatives that they should tie up with local artisans hailing from traditional handicraft places like Nirmal and Pembarti in the state and also source the raw material from within the state.

“Ikea is impressed with the open investment climate in Telangana in commercial and industrial fields as well as the potential for expanding the company’s supply chain network,” the chief minister’s office said. Ikea is one of the first companies to get approval for 100 per cent FDI in India.

Special chief secretary of industries department Pradip Chandra said the company would have three levels of supply chain network comprising international, national suppliers as well as local artisans. This would generate huge economic activities in addition to the retail selling of various kinds of furniture.

“The company only wants a business-friendly environment and a little support in terms of identification of government land on a long-term lease basis to set up the facility,” he told Business Standard while stating that he was hopeful that Ikea’s first India store will be up and running in Hyderabad before in other cities. The company officials are expected to come back for survey of land and locations very soon, according to him.

The company team left for Bangalore this afternoon to meet officials of Karnataka government for a similar purpose.