Triveni shuts down rural retail biz

Dhruv M Sawhney-promoted Triveni Engineering & Industries Ltd has decided to shut its loss-making rural retail business.

Its fully-owned retail arm, Triveni Retail Ventures Ltd, operates under the brand name, Triveni Khushali Bazaar, and incurred losses of over Rs 19 crore up to March 2009.

Triveni Retail operates in rural towns and semi urban cities of Uttar Pradesh and Uttarakhand, and has 42 stores.

"We have decided to shut down the rural retail business, since it has been making losses. The overheads are high in organised retail and we have faced difficulties in competing with the local Kirana stores," said a company executive. Triveni was earlier reported to have been looking for a buyer.

The company, with a retail space of over 1,25,000 sq ft, had not expanded its number of outlets for the last couple of years.

Khushali Bazaar offers products like agri-inputs, cattle feed, plastic furniture, FMCGs, automobiles, etc. It also tied up with Max New York Life and Reliance Money to offer financial services. Khushali has two formats - a larger format with an area of 4,000 sq ft and a smaller one with 800 sq ft. The larger ones were set up at an investment of Rs 30,00,000 each, while the smaller ones required an investment of Rs 10,00,000 each.

Triveni Engineering had ambitious growth plans in rural retail. With large sugar mills in UP, it planned to leverage its presence amongst over 250,000 farmers to get into the sector. Triveni Engineering is not the only one to invest in rural retail. ITC, Godrej Group and DCM Shriram Consolidated also have invested.

"The biggest bottleneck towards development in rural markets is the excessive dependence on agriculture and consequently, on rainfall. There is overall slowdown of GDP growth every time there is poor rainfall," says a CII-Technopak study on rural retail.

The rural consumer is unique, and it requires long painstaking efforts to understand, relate to and be accepted by him. Rural marketing involves more intensive personal selling efforts, compared to urban marketing. "To effectively tap the rural market, a brand must have associations that the rural consumer can relate to. There are several other infrastructure bottlenecks such as power, water, roads, etc," says the study.

Khushali Bazaar started its operations at Khatauli and Deoband (where the company has its sugar mills) in early 2005. Triveni Engineering, the country's third-largest sugar producer, has a capacity to crush 61,000 tonnes sugarcane daily. It has seven sugar mills and all are in UP.

"The rural retail business will turn profitable over a period of time, since there is a growth potential. It cannot experience the rapid growth witnessed in urban cities," said Saloni Nangia, VP (Retail & Consumer Goods), Technopak.

GE Oil gets JV with Triveni Engg
GE Oil and Gas through GE Pacific Mauritius Ltd has entered into a joint venture with Triveni Engineering & Industries for steam turbines in the range of 30-100 Mw gain in Indian and overseas markets.

The joint venture company, GE Triveni Ltd, to be headquartered in Bangalore, will use technology from GE to produce turbines at Triveni's Bangalore facility. At present, Triveni's facility manufactures steam turbines up to 30Mw and also provides refurbishment solutions to larger turbines.