Date:29/05/2004 URL: http://www.thehindubusinessline.com/2004/05/29/stories/2004052902151900.htm

Back Trinethra makes expansion plans in AP

K.V. Kurmanath

Hyderabad , May 28

TRINETHRA Super Retail Ltd, the Hyderabad-based supermarket chain comprising 72 outlets across Andhra Pradesh, plans to go for an IPO by 2006 after reaching out to all the district headquarters and opening three hyper marts in three major cities.

"We are going to cover the whole of AP this year by opening 21 outlets, mostly in district headquarters," Mr Anjaneyulu Kakkera, Managing Director of Trinethra, told Business Line.

The company is going to invest Rs 25 crore - Rs 30 crore on expansion.

"We have approached banks to fund the expansion plan. We have got positive response from them," he said.

Post-expansion, the company's total trade area would go up to 3.32 lakh square feet from 1.26 lakh sq ft. Of the 72 outlets, Hyderabad houses 46, Visakhapatnam 11 and Vijayawada six.

Trinethra, which registered a turnover of Rs 107 crore (Rs 79 crore) during 2003-04, is confident of notching up Rs 200 crore during the current financial year.

"Our greatest strength is our reach. We go to the customer by opening stalls very near to them," he said.

Recognising the potential of hyper marts, the retail major is going to open three hyper marts, one each in Hyderabad, Vijayawada and Visakhapatnam.

In order to increase margins in the groceries business, which is considered to be a low-margin business, Trinethra has chalked out a twin-pronged strategy.

While scouting for direct suppliers, the company is going for more and more in-house brands.

"Corporates have recognised the potential of retail business through supermarkets. Big companies like HLL have agreed to supply directly. This will help us avoid middlemen and save good amounts of money. We can pass on the benefit to customer," he said.

The strategy, according to him, benefited all the stakeholders - suppliers, customers and the company.

"This is a volume-based business. If there are big volumes, we can even go to farmers directly to procure produce," Mr Anjaneyulu said.

Besides, Trinethra has started producing its own brands that contribute nearly 25 per cent of its turnover. "We are going to increase this to 40-45 per cent in the next two years," he said.

After meeting its own requirements, Trinethra may even sell its products in the open market as well. "But that is for future. We need to study various models abroad in this regard. We also need to study how mechanisation works," he said.