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Wal-Mart and Bharti finalize India deal


NEW DELHI Wal-Mart’s entry into the Indian market is official this morning. The retailer and Bharti Enterprises entered into a joint venture arrangement to created Bharti Wal-Mart Private Limited that will operate warehouse club style stores and require Wal-Mart to provide logistics and information systems advice. Plans are for the first of the wholesale cash-and-carry stores to open by the end of next year with between 10 and 15 units in the range of 50,000 to 100,000 square feet planned for the next seven years. Categories of merchandise sold will include fruits and vegetables, groceries and staples, stationery, footwear, clothing, consumer durables and other general merchandise items, the companies said.

“Through our wholesale cash-and-carry joint venture we will help drive efficiencies across the supply chain and work towards the betterment of India’s farmers, small manufacturers and retailers, in line with our global vision of saving people money so they can live better,” said Wal-Mart vice chairman Mike Duke. “We would also like to leverage our global scale to transform some of these suppliers into exporters with access to our global markets over time.”

In addition to the handful of stores operated by the joint venture, other aspects of the deal will be less visible and involve Wal-Mart sharing information with Bharti to establish logistics and information systems to support Bharti’s retail plans. Current Indian law prevents foreign direct investment, so Bharti Enterprises established Bharti Retail, which plans to establish a chain of stores that will receive technical support from Wal-Mart via a franchise agreement.

Meanwhile, the wholesale cash-and-carry joint venture will invest in a supply chain to link farmers and small manufacturers directly to retailers, thereby maximizing value for farmers, manufacturers, retailers and consumers. The venture will support farmers and small manufacturers who have limited infrastructure and distribution strength while minimizing waste of fresh foods and vegetables.

“Wal-Mart's global expertise in supply chain and logistics will bring enhanced efficiencies across the retail ecosystem,” said Sunil Bharti Mittal, chairman and group ceo of Bharti Enterprises. “This venture promises to bring great value to millions of farmers, artisans, small manufacturers and retailers across India. We are pleased to be a partner in developing this sector which is set to become a significant engine of India's economic growth.”

Rajan Bharti Mittal, managing director of Bharti Enterprises added, “creating a strong back-end infrastructure will be one of the critical components in the development of modern retailing in India. This partnership is committed to bringing in world-class processes and technologies in the area of supply chain, logistics and cold chain that will be bring immense value to retailers, both big and small, across the country and ultimately benefit the entire retail ecosystem through better quality, and more choice at better prices.”

Bharti Retail and the joint venture with Wal-Mart is the newest undertaking for a company best known for its telecom business. Bharti Airtel Limited is one of India’s leading private sector providers of telecommunications services with 45 million mobile, fixed line, broadband and enterprise services customers. Bharti Teletech is the country's largest manufacturer and exporter of telephone terminals. The company also has a joint venture with ELRo Holdings India Ltd., called FieldFresh Foods Pvt. Ltd, to distribute fresh fruits and vegetables globally. Another Bharti joint venture, Bharti AXA Life Insurance Company Ltd., is involved with financial services and wealth management.

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