Ikea opens distribution centre in Pune, to invest Rs 7.5 bn in Maharashtra

Swedish home furnishing major Ikea has opened a Rs 1 billion distribution centre in Pune, and is also scouting for land in Maharashtra to build more facilities at an investment of Rs 7.5 billion, a senior company executive has said.

"We have opened a 2,30,000  sq ft distribution centre in Pune, on leased land and have pumped in Rs 1 billion into this. We will expand this to 3,70,000 sq ft by next year," Bimal Patel, the manager, distribution operations at Ikea India, told PTI.

"We are also scouting for more land in Maharashtra to build our own warehousing facilities over the next two to three years, and have earmarked an outlay of Rs 7.5 billion for this," he said.

The distribution centre has been set up to service its first store scheduled to be opened in Hyderabad by the middle of the year, followed by the second store in Mumbai in 2019.

The company has also purchased land in Bengaluru and Gurgaon to open more outlets. Ikea India plans to set up 25 stores by 2025, investing Rs 105 billion.

The company has so far hired 100 people for its distribution operations in Pune, and is looking to employ at least 200 more there.

"We have hired about 100 people and 50 per cent of them are women. We are looking to hire another 200 people once our distribution operations are running in full steam," he said.

The company will employ 600-700 people per unit, he said.

Ikea will operate a non-bonded warehouse for domestic goods, and a custom warehouse which will stock imported goods, Patel said.

Last year, Ikea India had committed to double its local sourcing from Euro 318 million to Euro 600 million by 2020.

According to the retail policy, the overseas companies have to mandatorily source 30 per cent of their wares locally, preferably from small suppliers.