Malabar Group lines up capex of Rs 1,000 cr in the next two years

Malabar Group lines up capex of Rs 1,000 cr in the next two years

Malabar Group lines up capex of Rs 1,000 cr  in the next two years

The Malabar Group, which has a presence in the  jewellery and diamond retail, property development, information technology and furniture segments, has drawn up capital expenditure plans of Rs 1,000 crore for the next two fiscal years.

Taking the competition from peers and global players head-on, Malabar Gold & Diamonds, the group’s jewellery and diamonds retailing arm, is planning to expand further in the Asia-Pacific region. In an interaction with Deccan Herald on Saturday, Malabar Group Chairman M P Ahammed said that the company has seen huge potential emerging in the APAC region.

“We will spend a portion of our capital expenditure on expanding our jewellery and diamond retail business overseas. Since we have a sizeable number of Indian expatriates in the APAC region with a hunger for gold, we hope that we can enter the market easily. Besides our experience in the retailing segment, local demand will give help us leverage our business,” he said.

Studying new markets

“We have started one showroom in Singapore and are planning to open two more. We have already undertaken studies for the Malaysian and Indonesian forays where we will have 4-6 showrooms soon,” Ahammed said.

Malabar Gold & Diamonds currently has a sizeable presence in the Middle East with showrooms in Bahrain, Saudi Arabia, Kuwait, Qatar, Oman and the United Arab Emirates.

“We have 43 showrooms abroad which are mainly in the Middle East with another showroom in Singapore. Since the Middle East market is saturated as far as expansion goes, we are looking forward to exploiting opportunities in the APAC region,” Ahammed said.

When asked about the company’s Karnataka plans, he said Malabar Gold & Diamonds presently operates 12 showrooms in the state.

Government policies

“Our Karnataka experience is prompting us to open up 8-10 new showrooms, including one each in Gulbarga, Bellary, Belgaum and Shimoga. We have identified a few other places in Bangalore city as part of the expansion plans. But these investments will depend on government policies spelt out in the Budget,” he said.

Talking on the challenges faced by the industry, Group Executive Director O Asher said that the main hurdles for the industry are the 10 per cent import duty and the Reserve Bank of India’s stipulation that gold purchases from banks and star trading houses should be used for domestic and import purposes at the rate of 80 and 20 per cent respectively.

“We look foward to a business-friendly policy in the upcoming Budget. The industry expects import duty to come down to four per cent from the current 10 per cent. If that happens, the market will flourish further in India,” Asher said.

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