IKEA commits to Rs 2,000 crore investment in Karnataka

Co sources 300 m goods and will double it by 2020

IKEA India, part of Swedish furniture giant IKEA, on Thursday announced its expansion plan in Karnataka by committing a total investment of Rs 2,000 crore.

In an interaction with Deccan Herald, IKEA India CEO Juvencio Maeztu said the expansion plan include opening up four stores and expanding sourcing strategies.

“We want to expand our footprint in the retail business in Karnataka by opening up four stores in Bengaluru”, said Maeztu.

He said the company’s other stores will be opened in Hyderabad, Mumbai and National Capital Region. “We are scouting land for these projects. The first store in Hyderabad will start operations in 2017. Each store will have an investment of Rs 500 crore. It will also give employment opportunity of 500 people and 1500 people indirectly,” he said.

The company already employs 45,000 directly and about 400,000 people in its various extended supply chain. As part of company’s gender diversity plan, it will hire 50 per cent women employees.

“We have 52 per cent global workforce that are women and 48 per cent of our managers are women. So the gender diversity is in the DNA of our organisation and will be implemented here in India also,”he said.

On the procurement plan, Maeztu said the company plans to double its sourcing from the current number. “IKEA has been sourcing products from India for close to 30 years, with 50 suppliers. Currently, IKEA sources 300 million euros worth of goods from India and will double this by 2020,” he said.

Through the Next Generation initiative, he said the company would like to work with social entrepreneurs to engage women artisans, utilising local skills and local raw materials to create unique handmade limited edition products for IKEA stores worldwide.

“Besides products from banana fibre, we source various limited edition items made by women from the various parts of the country to our global supply chain,” he said.

Besides 321 stores in 28 countries, IKEA Group has more than 40 stores run by franchisees outside the IKEA Group. The IKEA Group had 716 million visitors during FY14 and 1.6 billion people visited its website www.ikea.com.