MMTC entering jewellery retail and warehousing, to double revenues in 5 yrs

Consultancy firm KPMG has identified 8 key focus areas for the country's largest trading company

MMTC Ltd, the country's largest trading company, aims to double its topline in the next five years by revamping its business operations.

At the core of this restructuring is its foray into retail jewellery sale, export of minor minerals, setting up of warehouses, online sale of gold coins and jewellery, and aggregation of import consignments of smaller companies, among other things.

"We had roped in consultancy firm KPMG to suggest business modification based on the changing trade scenario and slump in the commodity market. They have identified eight key areas, which will double our turnover in the next five years, for growth," said MMTC chairman and managing director (CMD) Ved Prakash.

MMTC, a major player in gold import and sale, plans to open 250 gold retail outlets across the country. The outlets will be opened on a franchise model to save on the cost of taking up commercial space in cities. It will emulate the gold jewellery retailing model of the Tatas, which sells jewellery under the Tanishq brand.

"We will get better margins from the sale of jewellery compared to selling only gold. At present, we are selling gold jewellery from our offices at 25 locations. The franchise outlets will expand our footprint substantially," Prakash said. Though he did not reveal the brand under which the jewellery will be sold, sources said that it might be sold under the brand of "MMTC jewellery" to capitalise on the MMTC name's trust value.

Further, MMTC plans to build large storage facilities at strategic locations. To start with, it is setting up a Free Trade Warehousing Zone (FTWZ) at Kandla. It has been allotted 75 acres within the Kandla Special Economic Zone (KASEZ), 25 acres of which have already been developed. The FTWZ will handle metals, building materials, project cargo, iron ore, timber, edible oil, petroleum and petrochemical goods, chemicals and fertilisers, engineering goods and components, and agricultural commodities, among other things.

"Though we are in the business of the import and export of commodities, we didn’t have our own warehouse. There is a massive shortage of warehouse capacity in the country. So Kandla FTWZ will give a fillip to our business," Prakash said.

MMTC, which is currently engaged in the export of major minerals like iron ore and chrome ore, is keen to enter into the export of minor minerals. "There is an availability of minor minerals like bentonite and molybdenum in states like Gujarat. We are exploring the possibility of exporting these items," Prakash added.

MMTC's coal import business has taken a hit following the restrictions imposed on the use of imported coal by public sector power plants. In this backdrop, the company is looking at the aggregation of small consignments of coal imported by the MSME sector, which would not only reduce the freight cost for the user industry but also give a boost to falling business on this front.

According to the KPMG report, all these new initiatives might double the company's topline, which is estimated at around Rs 13,000 crore, in the next five years.

              CURRENT OPERATIONS
·         MMTC currently handles export of primary products such as  coal, iron ore, manufactured agro and industrial products
·         It is the authorised agency for import of gold and other commodities such as ferrous and non-ferrous metals and fertilisers
·         The company's international trade network spans across almost all countries
 
              Road ahead
 
·         Plans to foray into jewellery retailing under franchise model, online sale of gold coin and jewellery, building large warehousing facility at Kandla FTW