UB Group in talks with overseas retail chain partner

Vijay Mallya’s UB Group is in talks with two overseas companies for a proposed entry into India’s organised retail market to gain a share of business worth some $400 billion. MCF International Ltd, the UB Group unit has started preliminary discussions with two multinational players. MCF International is a two-year-old, wholly owned subsidiary of Rs 2,400 crore Mangalore Chemicals and Fertilizers, formed primarily to enter agricultural produce marketing and retail. The company is looking for a partner such as a large supermarket chain, with experience in logistics and reaching out to consumers. Whatever form of proposed partnership may take, the company is sure about wanting to be involved in the processes that lead up to the retail counter. MCF International wants to be the exclusive supplier of vegetables, fruits, grains and pulses to the planned retail entity. The company has an experience of 33 years in dealing with farmers and selling fertilizers to them. MCF advises farmers on inputs; buys their produce at market price; grades, cleans and sorts the produce and sells it to supermarket chains, industry canteens and hotels. Last month, group chairman Mallya announced at the company’s annual general meeting an investment of Rs500 crore for MCF’s retail entry. This sum has now been trimmed to Rs350 crore because of lower equipment costs.