Indian Oil ready to partner rural retailing

Friday, 14 September 2007, 07:00 Hrs
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Ahmedabad: Indian Oil Corp is ready to forge partnerships with business houses that want to venture into rural retailing.

"We are willing to enter into an memorandum of understanding if a prospective participant so desired," Sandeep Sharma, chief manager, retail sales, Indian Oil Corp (IOC) said here at a retail meet organised by Confederation of Indian Industry (CII).

Sharma said in a presentation that it was wrong to assume that rural retailing will not succeed because of lack of financial resources. It is in rural areas where the money really is, he asserted, adding IOC's success with its innovative project of Kisan Seva Kendra (KSK) initiated in 2005 was proof that there was no dearth of money in rural areas.

According to him, the Reserve Bank of India in one of its studies has stated that the real income possessed by farmers was close to 1,400 billion. No rural retailing business could fail when there is this kind of money available, he said.

Sharma said KSKs are based on a simple business model. "It is scalable and quite organised and has emerged as a brand in itself," he claimed. IOC plans to set up 5,000 KSKs across India by 2012. Currently, 738 KSKs have been established. "We are hoping to open 1,000 KSKs by this year and 1,500 by next year."

The KSKs, besides selling agro inputs like seeds, fertilisers, pesticides, equipment such as stoves and hurricane lamps, daily essentials and non-agro facilities like banking, communication and Internet facilities, also offer financial services.

"The long-term vision of KSK is to make it a hub of all possible needs and opportunities for rural customers," Sharma noted.

Starting a rural retail business on the KSK model does not require large investments. One could start with 6 lakh and operate a KSK successfully. The initial investment will roll back in just four years, Sharma said.
Source: IANS
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