McDonald's to infuse Rs 350 crore in state

Global restaurant chain, McDonald's on Monday announced that the company will infuse Rs 350 crore in Gujarat for expansion of its drive-thru restaurant chains in the state and sourcing of key ingredients like sesame and potato.

At an industry seminar held in Ahmedabad, top McDonald officials informed that the company will expand its presence from the current 10 restaurant chains to 30 in next 2-3 years with its focus on the highway locations. Speaking about the company plans, Nishit Pandey, director – alliances and corporate affairs, McDonald's India mentioned that the company was looking for partners to develop its 'Drive-Thru' restaurant chains on the highways of Gujarat.

 

"We are bullish about the restaurant industry in Gujarat and planning to increase our presence in the state by roping in landowners having land alongside highways in the state. We are ready to provide two models for the partnerships, one being a rent-based and other on the basis of revenue sharing," Pandey told.

Speaking to Business Standard, Pandey informed that the company gets around 10 per cent of its total revenues from Gujarat operations, which is estimated to rise significantly post expansion. The company has 200 restaurants across country at present and adds 4 to 6 units every month.

On the raw material supplies side, the company is sourcing potatoes for its famous French fries product from Deesa in north Gujarat, while it has started sourcing sesame from Rajkot in Saurashtra on trial basis. The company procures around 90 per cent of its potato requirements from Deesa.

"We have found Rajkot's sesame quality most suitable to our requirements. The sourcing is currently on trial basis and will be extended in due course of time. We have made provision of Rs 10 crore in our total investment of Rs 350 crore for such sourcing of ingredients," said a senior company official.

Of the Rs 350 crore, the company will invest Rs 150-160 crore towards sourcing potatoes from McCain Foods, a US-based partner of the company, while remaining will be used for expansion of restaurant chain across Gujarat over a period of 2-3 years.

The US-based McDonald's Corporation, which operates through a 50:50 joint venture with Hardcastle Restaurants Pvt Ltd in India, will sign MoUs with Govt of Gujarat for its proposed investments in the upcoming VGGIS 2011.